By Wen-Szu Lin, Wharton MBA 2006
When our business in China did not work out as hoped, I could not believe that I failed at something I set out to achieve. Four years of my life were gone. The emotional scars and physical ailments resulting from the stress were real enough. I couldn’t believe that I had lost money for my investors (who were friends and family).
Few people discuss the details about such periods in their lives. Most entrepreneurs that we hear about succeed. Or else they fade into oblivion. Older entrepreneurs occasionally discuss the multiple failures that they experienced to reach success. Yet, those painful memories are long past. The younger a successful entrepreneur is, the more he or she is featured and sought after in stories.
So, what happens with the majority of the entrepreneurs who, like myself, have experienced a major setback? By far, this period was the most challenging in my life, and I was the most unprepared for the moment. All of the business cases that I had studied in school, read in books, and heard first hand from entrepreneurs focused on how to handle business success. How would I deal with failure emotionally and mentally?
Range of Initial Reactions
In China, I saw a lot of failed businesses, both from local Chinese and foreign entrepreneurs. Through my years in Beijing, I have met many entrepreneurs and witnessed their responses when their businesses fail.
Based on my un-scientific observations, initial reactions fall into a few categories:
- Reflect and move on: Most people get depressed and disappear from the social scene for a while, from months to years. On one hand, they want time to reflect. On the other hand, they fear the shame and ridicule that they think others will inflict on them. Eventually, this group of people moves on with their lives. Whether that means a desk job or another venture often depends on their personal finances and their final outlook on what happened with the business.
- Disappearing Act: Some people literally move away and disappear, leaving no traces–their phones and emails are simply cut off.
- Denial (negative energy): These people deny all responsibility. They spend most of their time making up excuses for what happened, rather than learning from their experiences and moving on. These people will secretly undermine those that ask for their help.
- Oblivious (optimistic): Some people are just very optimistic. They see the end as the beginning of the next thing, whatever that is. These people, in my mind, are the true entrepreneurs who love the thrill of starting something. They brush off failures as small roadblocks and know that they will bounce back and try again. I have seen a few lose their life savings three or four times. To top it off, they have a family! Hats off to them for their audacity to pursue their ideas.
There are probably many other common responses to a failed business venture, but these were the ones that I encountered most often.
What happens now?
My foolish pride was quickly replaced by an immediate concern: I needed to support my family, as my wife had just given birth to our first child. Perhaps this urgency snapped me out of a potential downward spiral into depression. I had to quickly figure out how to generate an income for my family. My business partner and I had sacrificed much of our salary to improve the bottom line of the business over the past four years, and we had invested a good portion of our life savings into the venture. Financially, I was not in an enviable position.
I experienced many mixed emotions as I evaluated my options and next steps. Here were some of my main take-aways:
- Personal reflection: I recalled an English teacher saying that the only method she had to keep memories and emotions from fading was to write them down. Fifteen years after her course, I took her advice. I started writing anecdotes, detailing each of the memorable stories from our four years. I relived them in my mind and tried my best to put them on paper with the same intensity as I experienced them. That was how I learned to move on from my experience.
Bottom line, I wrote a book (The China Twist) that reflected my experience. The book contains the most vulnerable moments in my career, so I am facing my fears and my ‘shame’ head-on. I am proud of what I wrote and what I have experienced. Now, I could care less at what others are saying behind my back, but it took a year and a book for me to do so. I can say that I am much stronger now than before I started the business.
- Job opportunities: I did not realize that my degrees and background experience in consulting and technology were such a strong security blanket. My options were actually quite varied and better than I had expected when the business ended. Given global unemployment levels, I was expecting to take on a job that paid entry level wages. Instead, what I discovered was that my ‘worst case’ scenario was a pretty decent job. In the end, I still wanted to stay in the food industry and turned down multiple general manager/ CEO positions with established firms to stay on in the business.
I know too many people who talked so much about doing a venture but backed out because they were scared of the financial implications. These were people who were still single, had decent savings, yet the fear of not having a salary if the business did not work out crippled their dreams. Don’t. If one is capable enough to come from a great background and job, but decide to leave for a startup, there will be opportunities out there if the startup does not work out.
- Another shot at entrepreneurship: Growing up, I could think of nothing else I wanted to do except start something from the ground up. For me, a business or an organization was the ideal ‘something.’ Everyone talks about how one should take the risk before getting married and definitely before having kids. Well, I have taken those gambles and it has not paid off yet. Now that I have a wife and kids, what do I do? How do I stop all of the business ideas that still dominate my mind today?
My priorities definitely have changed but my dreams have not. One thing I know for sure is that I will be back in the entrepreneurship game sooner or later.