Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Lecture Notes
Chapter 11: Learning From Failure
Learning Objectives
• Describe failure and its effect on entrepreneurs.
• Identify several different types of reasons for failure.
Notable Quote
• “Nine out of ten businesses fail; so I came up with a foolproof plan — create ten
businesses.”
What is Failure?
• A business failure is generally conceived as the termination of a commercial
organization that has missed its goals and failed to achieve investors’ expectations.
Effects of Failure
• Pros
• Intensifies cognitive process
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
• Financially costly
Top 20 Reasons Startups Fail
Notes:
Critical Thinking Question
• Imagine one or more failure scenarios for a business of your own. How do you think you
would respond to the threat of failure?
Entrepreneurs Share Their Reasons for Failure
• Psyche “Mistakes”
Psyche Mistakes
Notes:
Waiting Too Long Mistakes
Notes:
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Hiring Mistakes
Notes:
The Failure Spectrum
• Deviance—Napster
• Inattention—AudienceBloom
• Lack of ability—Nibletz
• Process inadequacy—Ayloo
• Uncertainty—Intellibank
• Process inadequacy—Ayloo
• Uncertainty—Intellibank
• Exploratory experimentation—ShortStack
Notes:
Cope, Jason. “Entrepreneurial learning from failure: An interpretative phenomenological
Fear of Failure
• Failure often brings:
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
• Pain
• Humiliation
• Shame
• Guilt
• Self-blame
• Anger
Notes:
Despite the learning and opportunities that may arise from perceived failures, many of us view
Fear of Failure
• Entrepreneurs must:
• Separate personal and professional failure
• Accept failure as a part of the learning process
• Admit mistakes and move forward
Notes:
For entrepreneurs, failure is especially difficult because it is hard to separate personal failure
from professional failure given how closely associated the identity of the business is tied to the
What Tom Hatten, Mikkel Svane and many successful entrepreneurs have realized is
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Critical Thinking Questions
• How difficult is it to remove the emotional aspect of decision-making in order to make
the most ethical decision?
• Do you believe there are reasons why an entrepreneur might “deserve” to fail, or “need
to learn a lesson the hard way” through failure? If not, why not? If so, give some
examples.
Notes:
Ben Huh was a 22-year-old student majoring in journalism when he managed to cobble
With his sense of self-esteem at stake and employees and investors relying on Huh, he had to
10 Signs you Might Have a Fear of Failure
2. Failing makes you worry about your ability to pursue the future you desire.
4. Failing makes you worry about how smart or capable you are.
6. You tend to tell people beforehand that you don’t expect to succeed in order to lower
their expectations.
8. You often get last-minute headaches, stomach aches, or other physical symptoms that
10. You tend to procrastinate and “run out of time” to complete your preparation
adequately.
Notes:
Critical Thinking Questions
• Would you agree that entrepreneurs have an emotional connection to their businesses?
Global Fear of Failure: The GEM Study
• Lowest level of fear in Africa, Latin America, and the Caribbean.
• Highest level of fear Asia, Oceana, and Europe.
• *The United States falls somewhere in between.
Notes:
Global Fear of Failure
• See Figure 11.3: Fear of Failure Rates around the World
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Self- Perceptions about Entrepreneurship
Notes:
Source: Gem 2015/2016 global report, Figure 5
Learning from Failure
• Beware of “shiny object syndrome”
• Fail fast…but not too fast
Critical Thinking Question
• How do you think you’ll be able to take the lessons learned from your failures and use
them to attain more success in the future?
Getting Gritty: Building Your Tolerance for Failure
• Building grit
• Courage
