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Hi, welcome to my blog. In this part of my world, I talked about how to achieve financial freedom by learning how to make money online through creating sites and earning from them.

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My current experiment in making 50 amazon site niches. If you have not been following this challenge, best place to start is this resource page for the amazon challenge, that lists all the articles that I have written so far.

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Monday, 23 March 2009

What did you learn from your startup failures?

It is common saying that failed entrepreneurs make better entrepreneurs because they have seen it once and know what doesn't work. However, a recent Harvard paper says that such thinking is a myth. An NYtimes article provided the reporting:

In other words, trying and failing bought the entrepreneurs nothing — it was as if they never tried. Or, as Professor Gompers puts it, “for the average entrepreneur who failed, no learning happened.”

At first, this seem quite shocking to me. Upon reflecting further, including on my own failures, I think the paper may be correct. When you fail as a startup, what did you actually learn? For me, it can be many things, from project management to a wrong business model or even wrong market. However, there are so many failure points that learning from some doesn't gurantee that you will not fail from others. More importantly, failing doesn't mean you have found a path to achieve success and that is a key missing ingredient.

There are so many paths that a startup can take. It takes experience, from achieving past successes, to know which path has the highest chance of getting you to where you want to go. That is why the study shows that the only reliable predictor of startup success is past achievements. Nothing else is as important in the final analysis.

So, does that mean you shouldn't do a startup if you have not done it before? No. It means you have to be smart about it. Get a mentor or a partner who knows how successful paths are created. Learn from them. Learn not only the pitfalls but the way to achieve success.