Let's face it, nobody wants to fail in business. Like eating soggy pizza, or getting a bad haircut—failure, whether fast or otherwise, just isn’t a great feeling. And yet, we often hear these cliche business anecdotes about the importance of failing fast, like it’s supposed to be some sort of secret to success. However you slice it, failing fast is still a drain on resources, both time and money, albeit entirely avoidable. Instead, what's more important is business owners having clarity around the vision, mission, and purpose of their brands.
According to data presented by the Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail in the first two years of operation, while nearly half (45%) shutter within the first five years. Talk about failing fast. Unsurprisingly, 65% will drop off in the first 10 years, leaving only a mere 25% of new businesses to make it past 15 years or more. The commonality shared among that remaining quarter is adequate planning, strategic resource allocation, careful spending, and even more careful cost saving measures; or more simply, a vision.
Furthermore, according to the BLS, in 2021, entrepreneurs launched more than 843,300 new businesses—even amid COVID-19. So, from the historical data, we can expect approximately 168,600 of these businesses to be gone by now. So what can businesses do to avoid being another forgotten brand in a statistical majority of failures? With the right planning, purpose, and a clearly defined roadmap to elucidate a company’s vision, businesses have a much stronger chance of succeeding.
There are obvious, surface level benefits to the fast fail philosophy. Tech magnates and crypto pioneers will say it allows for quick pivoting and course correction. And sure, a speedboat is easier to turn than a cruise ship. But if we’re talking about the long haul—past that 15 year mark—I know what I’d rather sail in. The fast fail success stories are few and far between, because in reality, the ideology is more a facade for not having a clear plan in the first place. People don't plan to fail, they fail to plan. The great Benjamin Franklin was perhaps a bit more eloquent when he said, "By failing to prepare, you are preparing to fail."
Why wouldn’t the same apply to scaling one’s business? Without a clear vision, mission, and purpose, ill-equipped entrepreneurs will find themselves stumbling around in the dark until it's time to close shop, likely sooner than expected. After a short bout of initial success, eventually business owners without a clearly defined plan will hit a wall. Imagine being in a pitch black room without a clear way out—eventually the captive would start flailing around, trying different things, hoping something sticks in the search for a clear way forward. For a flailing business owner, that's when the wasting of resources really kicks in.
That then translates to countless hours and dollars spent on marketing campaigns that don't resonate with an audience, or costly investment in products or services that nobody actually wants. Perhaps most costly of all, it can result in the hiring of employees who aren't a good fit for a given company’s ethos or culture. And worst of all, that’s when business owners lose sight of what they’re really trying to accomplish.
A clearly defined understanding of a business’s vision for the future, its mission as its guiding star, and its purpose for existing, allows everything else to fall naturally into place. Understanding those defining characteristics helps identify target audiences and their needs, which informs a more clear sense of what products or services a business needs to offer. It’ll help attract and retain employees who share a company’s values and are passionate about its mission. And best of all, the sum of those parts equals a comprehensive roadmap to success.
Ultimately, the pitfalls of failing fast may just be a cautionary tale as old as time, but the bright side is there is a better way. Planning, executing against that plan, and remaining diligent. And while that may sound like an oversimplification, it really just starts with taking the time to define one’s vision, mission, and purpose. What is this business trying to accomplish? Who is being helped? What difference does this business make? These are the questions every entrepreneur should be striving to answer…long before launch.