Research on startups indicates that a large number of them fail at an early stage: By some accounts, nearly 9 out of 10 startups fail. And even the startups that succeed generally find an ‘exit strategy’ in the first few years of their existence. Many founders aspire to be ‘discovered’ by large enterprises and actively court corporate clients with the hope of being bought out.
Entrepreneurs and employees of startups acquired by large companies generally join them as ’employees.’ Some stay on in blue-chip companies like Google or Facebook while a few might opt to jump ship and explore entrepreneurial ideas again. The book “Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley” highlights an instance of such a buyout and the founding team joining Silicon Valley giants.
Employees of failed startups, however, may not be so lucky. Employees of such failed enterprises may sometimes find it hard to find the next gig or job even though research shows that employees gain valuable technical and business skills at startups.
Experience at startups – even failed ones – are valuable
Startups fail for various reasons. Many of them fail for obvious business reasons – lack of market for the idea, unvalidated business plans, lack of execution capabilities, competitive pressures. The inability to capitalize on the opportunity compounds the lack of market share or revenue generation. In many cases, the burn-rate and expenses add up much faster than any income the startup generates, leading to cash crunch and an eventual crash.
In many cases, early stage employees begin reading the tea-leaves, especially when key executives and some founders begin parting ways with the startup. When it may be obvious that things are failing, many of them jump ship, but a few may continue to be committed to the original vision or business idea and dig in deeper, hoping for a turn-around. When the venture eventually folds, they may find themselves suddenly jobless but will certainly have the credentials and experiences gained in the startup.
Entrepreneurs and employees at early stage startups are expected to roll-up their sleeves and solve technical and functional problems on the fly. Employees generally are all-rounders and should be comfortable working across technologies. Some early stage employees may also be expected to contribute to other operational areas like marketing, make sales calls and handle customer inquiries. These experiences can be valuable, especially for those at an early stage in their careers and such experiences are easily transferable from startups to the corporate world.
Turning failure into success
Employees and founders of failed startups may sometimes get into a phase of introspection. They may take time off to reflect on the lessons learnt and the opportunities missed. Many of them take to social media to post accounts of their failures and lessons learnt. Such social media rants are picked up by the media and bloggers, including myDigitalStartup.net. Here are a few successful ways in which employees of failed startups bounce back after their ventures fail:
- Believe in yourself – Many entrepreneurs and employees of failed ventures may fall into the ‘failure trap’ by thinking they were responsible for the failure. Such an attitude can be counterproductive, and experts suggest that you should believe in yourself
- Reduce periods of introspection and act fast – After the initial period of introspection and rants, employees should quickly formulate a game-plan to turn the failures to their advantage
- Don’t be afraid of media spotlight – Employees of failed startups should use any media spotlight to showcase their personal learning’s and skills acquired during the journey.
- Use your network – Successful individuals begin leveraging their networks and social media contacts to explore opportunities either at startups or even large enterprises that will find their skills valuable.
- Highlight your positive energy and passion – As a key member of a startup you were probably driven by the high-energy work culture. You should be able to highlight your passion for business and technology to prospective employers.
Business leaders accept risk-taking and appreciate that failures are a part of the game. They are always looking out for promising candidates who can demonstrate how and what they learnt from their journey.
Bottomline: As a former-employee of a failed venture, project your strengths as a well-rounded problem solver who can demonstrate ‘how’ you have done things, and not just ‘what’ can be done.
Other articles and references
- Inc: Should You Hire a Failed Founder?
- The Verge: Failure is a feature: how Google stays sharp gobbling up startups
- Economic Times: Paytm sniffs deal in laid-off talent from Snapdeal and Stayzilla
About the Author: Mohan K is an Enterprise Architect, tech columnist and blogger.