Starting a business after failure: what data says.
The data on starting a business after failure suggests repeat founders tend to do better. However, it cannot say whether experience or money explains that. Meanwhile, a no is not the end, and waiting too long after a yes lowers your odds.
If the trial says no.
The numbers are gentler than you might fear. Van Gelderen, Thurik and Bosma followed five hundred and seventeen people trying to start a business for three years. Of those, a hundred and ninety-five got one going and a hundred and fifteen abandoned it. Both groups hit about the same number of problems.
Instead, constraints outside their control separated them. No good data was found on how quitters feel a year later.
If it says yes and you are stuck in the planning stage.
You are not unusual, but you are on a clock. Parker and Belghitar found in 2006 that many people sit in pre-launch for a long time. The longer you stay stuck in the planning stage, the less likely you ever launch. Risk aversion predicts the sitting, so your page gives it an end date.
Starting a business after failure, read carefully.
Kathryn Shaw at Stanford studied records of 2.8 million small retailers in Texas. People succeeded more often the more times they had run a business. So the serial entrepreneurs success rate looks encouraging. But those who try again may simply have the money to absorb a first failure, and the data cannot separate these.
Plan for starting a business after failure tonight.
Add one line to your page saying what you will do if the trial says no.
Then set a launch deadline, so a yes does not turn into years of waiting.
From the book.
You're not unusual, and you're also on a clock. Parker and Belghitar found in 2006 that a large group of people sit in the pre-launch phase for a long time without either launching or quitting, and that the longer it goes on, the less likely they are ever to create the business. What predicts the sitting is risk aversion, and how risky you believe the market to be, so if that is you, the page above isn't a formality at all, it's the single thing that gives the sitting an end date.
I Want to Start a Business but I Can't Quit My Job, chapter 14: A decision you can defend later
Questions about starting a business after failure.
Do people do better starting a business after failure?
Shaw's Texas data shows repeat founders did better. But money and support may explain it, not lessons learned.
What separated founders who launched from those who quit?
Not the number of problems they faced. It was constraints outside their own control.
Why does waiting after a yes matter?
Parker and Belghitar found the longer people sit in pre-launch, the less likely they ever start.
Read the whole chapter.
This lesson covers one section of chapter 14, “A decision you can defend later”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 Outcome bias: why you grade choices by results.
- 02 Regret of inaction: thinner than the coffee mug.
- 03 Why some regrets hurt more: the reason you gave.
- 04 Process vs outcome accountability: the case against.
- 05 Decision journal template: one signed page.
- 06 Business phone number banned: the mistake I can name.
- 07 Starting a business after failure: what data says.