Topic 3: Positive aspects. Material outcomes
Now, let’s focus on the positive material aspects one can obtain from a failed entrepreneurial adventure. Many failures are related to economic resources, which often are misused, lost, wasted, or not returned. For that reason, the very first lesson you get from that sort of failure regards the economic experience. If the individual engages in a ‘Good Failure’ process, during which they correctly follow the previously described phases, they will absorb knowledge about managing the budget effectively, managing cash flow, and making informed financial decisions. The mere experience of failing helps build a stock of knowledge, which, as analysed earlier, could help to quickly jump into the Abstract Conceptualisation phase. This small stock of knowledge already represents a positive outcome since many big enterprises prefer to hire failed entrepreneurs rather than ‘clean’ ones (Olaison & Sørensen, 2014). Thus, when the failed individual has difficulties re-engaging, they could find another source of income such as by becoming a worker, which is more likely to obtain. Improving one’s financial and economic literacy is implicitly related to failure and helps frame a general positive material outcome. However, the following examples are more tangible and could provide a better perspective:
- Network of contacts: When advocating for an entrepreneurial venture, the individual develops their own contacts and professional acquaintances. These contacts are of pure professional character, but once the failure occurs, they could be used for re-engaging. For example, in the fashion/clothing market, connections with suppliers, manufacturers, and designers are very relevant, and they tend to be stable. If these were satisfied with the previous venture, they are more likely to support new ones.
- Intellectual and property assets: Throughout the entrepreneurial journey, valuable intellectual property (IP) may be developed, such as patents, trademarks, or proprietary processes. IP could help in an unstable entrepreneurial situation or failure as it could be reused for new initiatives. For example, a failed adventure in the technological and robotic industry may have developed certain algorithms or programmes that could be used again for other purposes, exploiting different potentials. On the other hand, if the individual needs immediate resources, IP assets could be sold.
- Subsidies: Some governments offer grants or subsidies to support entrepreneurship. Even if a venture fails, entrepreneurs may still be eligible for such support in subsequent endeavors, or at least be aware of the necessary administrative paperwork and criteria for re-applying.
- Training: Entrepreneurship offers a specialised set of skills that often last for a long time. Mantaining these skills for future entrepreneurial ventures implicitly saves the costs of training for acquiring those skills, and facilitates the learning of new, related ones.
The most prominent positive outcome an individual could obtain from failure is resilience. The concept of resilience has been widely studied. A general definition could be framed under the process by which individuals achieve positive developmental outcomes despite exposure to known threats to adaptation (Yates, 2015). According to Masten (2014), resilience is the capacity of a dynamic system to adapt successfully to disturbances that threaten system function, viability, or development. Therefore, the best personal outcome a person could obtain from failure is the capacity to strengthen adaptability to the circumstances.
Failure helps to identify the individual’s gaps and lack of capacity (Zhou & Tang, 2020) Of course, it needs to engage in a reflective phase, adopting an internal attribution to extract positive personal outcomes. By positively engaging in these process, some direct outcomes would be:
- Embracing risk-taking: Failure could prompt the individual to lessen the fear of taking future risks
- Increased emotional intelligence: Failure provokes confusion and nonpredictable emotions. Once these emotions are experienced, they will not be new to the individual if they experience them again, and they will be aware of them, knowing better how to manage them.
- Improved time management: This could also be added as a positive material outcome. The individual addresses the importance of setting priorities between their personal and professional lives, as well as routine dynamics.
- Enhanced Decision-Making skills: Situation analysis is a rather difficult process. Structuring the venture elements in a correct way to make the best decisions is fundamental for successful entrepreneurs. Thus, failure helps to gather information on what works and what doesn`t.
- Increased Empathy: Having experienced the emotions provoked by failure, entrepreneurs are more likely to develop greater empathy for those who go through similar situations. Thus, they are more likely to understand grief and support others.
