Lessons Learned from Startup Failure

Aliia Munduzbaeva, CEU, MA in Economics

September 6, 2020

Michael Bist is the founder of The Tailor Network – a designer fashion brand that brings tailoring jobs back to local communities and enables disadvantaged groups to gain sustainable income. What lessons can we learn from failures? This interview with Michael explains the importance of making mistakes. Moreover, it helps to look at problems from a different perspective.  

What was your biggest failure and what did you learn from it?

My biggest failure was my first startup called “ARTCOSMOS”. It was a marketplace for affordable art where you cannot only buy art but discover stories about the artist behind the artwork. It was an online art market, which I opened and worked hard on, but it never took off. I think my learnings from this is the importance of marketing and really knowing how to reach your customers.

You can have the best product, the best tools, etc. but if you do not know your customers, it is not going to work.  

So was this the reason why your startup failed?

Buying art is not an easy ad hoc decision. You need to groom your customers. You need to overcome a lot of obstacles. The problem was, we did not know how to reach enough customers, to have enough time to overcome the obstacles while making revenue. We could not come up with an idea on how to hyper-target the people who were just now ready to buy art. So instead, we would have to talk to a lot of customers and see that we get them ready to buy art.  

What motivated you to start a new startup?

I had this idea before. One of the main drivers was that I wanted to create something meaningful. I have worked in corporate for quite a while before. I did not feel like I was making a change. So, I decided to do something that has meaning, plus allows me to be independent.          

So the experience with the your first startup did not demotivate you, right?

Real failure for me would be to give up.

Not having tried everything in my power to achieve what I want. For instance, with the second startup, we were just on the way to do good and then the COVID crisis hit. And now we are fighting for the second startup. And instead of giving up, my management team decided that we found the third startup. That would allow us to make income while the Tailor Network is not going so well. So that we can survive and, extend the fight for the network because otherwise, we would have gone bankrupt.  

So after all, you are still not afraid of failure?

I think this is something about the founders` personalities.

This must be in your DNA, to have a higher level of endurance, meaning you get hit in the stomach, you get up again. And I think that is what you need.  

And I think the second part of it is if something doesn't work out, you have to sit down, you have to be brutally honest and see what didn't work, where your mistakes were, what you messed up, but you cannot allow it to affect your perception of yourself. So, you need to have core confidence inside you that allows you to accept failures of your mistakes without destroying your confidence.

So is it OK to make mistakes?

I grew up with this mantra: it is okay to make mistakes as long as you learn from them.

I allow myself to make mistakes once or asked for advice once and then I should know this and then I make the next mistake and I learned from it, but I should not make mistakes again and again. Not the same mistake.

So whether you are startupper or whether you are a manager, it is important you have to allow people and yourself to make mistakes. But you have to ensure that everyone learns from them. You make different mistakes for sure. But you do not make the same mistake and you can get better, with every try.

Our first startup attempt started very unprofessionally. We just went into it, we just did it. For the second one, we were better prepared. For the third - it is almost like, we're always playing it by the books, using super detailed market research and everything, though. I think you kind of draw the consequences with every startup, you learn from your mistakes. You think about new ways to reach customers and just improve.

If you could start over, what would you do differently?

I think one of the things I would do is I would invest more money in getting advice.

With my first startup, I would go a lot more out and talk to people about it. I think this is one of the biggest mistakes founders make and I did this as well with my first startup.  

With the second startup, I talked with customers as much as I could, to everyone who wanted to listen or who wanted to engage with me on it. I wanted to get all the negative feedback that I could get and not be offended by it, but trying to see how can I counter it?  

What is your motto?

Never give up!

Conclusion

There are a lot of lessons you can learn from startup failure and failure in general. The most important is not to make the same mistakes again and to learn from them. That is the main driver of development. More attention should be put in investing in market research and preparation, trying to reach your customers in advance, to understand their needs and expectations. Another important thing is to be open to feedback and criticism. All these will help you to reduce the probability of failure.  

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