70% of New Businesses Fail…so what?

You may have heard the statistic that 70-80% of all new businesses fail within the first 5 years. This statistic is meant to act is a deterrent for you to venture out and experiment on your own.

The unstated fact remains that while 70% of new businesses may fail within the first five years, but do 70% of business owners fail? The answer is: no.

For most business owners, the failure of the business is not tied to their own personal failure. From my own personal experience running small experiments and a small start-up subscription box company a little over a year back, I can definitely say that while those business ideas failed to take off, I learned more about how business is done from those few experiments than I had from my 4 years of undergrad. It also cost me significantly less.

From talking with hundreds of entrepreneurs in my current role, I can confidently say that while many of them have had businesses that have failed, none of them have taken it personally. The lessons have been invaluable in growing their next venture.

Steve Pavlina puts it another way:

While a business or a job may cease to endure after a certain number of years, that doesn’t mean it wasn’t worth doing. You’re still going to learn and grow and create value along the way, regardless of the outcome. Just as a job can be a stepping stone, so can a business, and there’s no reason you can’t start a new business with the expectation that it’s only temporary. Jobs and businesses come and go. Your own personal growth is what endures. (source)

Do not let statistics deter your desire to experiment and try out new things. The failure of an idea or process is not the failure of the person. It is most likely a massive success in growth.