Good Failure, Bad Failure.

I worked with a lot of startups. I launched my own. My dad was an entrepreneur too — printed bingo cards, even made his own presses. It's a rollercoaster of high highs and low lows, eating what you kill — and hoping there's enough to feed your family. Fear of failing is something you face daily, and one you need to get comfortable with. For a startup founder who didn't succeed in realizing their dream, it carries a lot of shame. And shame makes people either hide or dig in. One keeps a dying company alive past the point anyone believes in it. The other quietly concocts a story instead of admitting it isn't working. I've seen both; I've lived one.

We tend to read every startup closure as a failure. She couldn't do it. Didn't have the skill, the ability, the hustle. But most closures are actually a decision, and arguably the opposite of failure. A new family. A better opportunity. A new passion. The same ingredients that launched the startup in the first place. That's not failure; that's a strategic call -  it's a good failure. Bad failure is different: you didn't do the work, you avoided the hard call, you let it die by neglect instead of deciding. Once bad failure takes hold, it's hard to climb out.

Through W Venture, I've watched close to 60 startups come through. Inevitably, some went quiet. Very few just shut down their company, quickly and cleanly, when things don’t work. They pivot, looking to a different market, positioning their product differently, or try a new vertical. This is encouraged by their advisors, of course. Then there are those who found success early and quickly and thought it would last forever, it's especially painful. Markets change, new competitors emerge, passion dwindles. And years pass wishing for a different outcome.

It's hard to build something from nothing. Your idea, your first customer, your first hire, the first no that didn't stop you. It's harder still to walk away and call it a decision instead of a defeat. If you're not sure whether you're building or just refusing to stop - my advice: fail faster, fail with focus. Set a real go/no-go date, run the numbers, and let the facts decide. Then applaud yourself for walking away.  I wish I'd been as generous with myself.

We need to reframe the end of a startup as good failure, instead consider it a positive indicator of future success, not a verdict on the founder. Repeat founders raise more, faster. Successful ones usually raise the most. But good-failure founders should be close behind. Honest, examined failure teaches more reliably than unexamined success, because failure forces the postmortem that success lets you avoid. 

So next time you're talking to a founder whose startup didn't make it, don't just ask what happened. Don't reach for pity, reach for bravery. Ask what they learned. Ask what they'll do differently next time. Just implying there is a next time scares shame right out of the room. Then ask yourself: what are you building from nothing?

~ By Shelley Voyer Managing Partner W Venture