At a recent fireside chat with undergraduates, Prime Minister Lee Hsien Loong spoke about how he does not think that there is any stigma or shame attached to startup founders who fail.
He had good intentions in encouraging aspiring Singaporeans to try new businesses and succeed. I, for one, am eager too to promote this culture of entrepreneurship.
The reality, however, is starkly different. For the last 10 years, I have been a mentor and advisor to numerous early-stage Singaporean startup founders. And from where I stand, Singapore has a long way to go in supporting them and understanding the concept of failure in the startup industry.
We often celebrate news of startups receiving funding. But away from the news is a larger group of startups that have failed and quietly disappeared. I have noticed that startup founders who regularly posted on social media about their startup activities would suddenly go quiet once their venture failed to take off.
Khailee Ng of 500 Startups has spoken previously about how entrepreneurs face high stress and this is not discussed openly with investors, staff and other founders. Mr Ng cited a Harvard Business School study done in 2012 which attributed 65 per cent of startup failures to personal stress.
Shame prevents founders from openly sharing their problems, and this can be a vicious circle that further perpetuates a culture where no one wants to talk about failure and the shame associated with it becomes worse.
While improving, Singapore’s education system is still predominantly about a guided path to success. Granted, there are now many varied options to pursue studies, but it is about succeeding consistently to advance to the next stage. If you fail, your education options become limited.
Entrepreneurship runs on a different pedagogy which thrives on failure. Successful startups will share that the key to success is many trials and errors until the right solution is found. But this mindset is not well accepted in Singapore.
As an Asian society which honours successful doctors, civil servants and scholars, parents are not the most supportive when their children want to be a startup founder. Parents are pragmatic. To them, in a high-cost society like Singapore, choosing a startup life is risky and does not justify the investments and education they have provided for their children since young.
To these parents, one failure as a startup founder is one too many. Young startup founders usually obtain funding from associates, family and friends in the early stages.
While supportive, they are unaware of the inherent risks of startup failure, placing immense pressure on the founder not to fail. And when the founder does fail, relationships get affected. These entrepreneurs feel lost and depressed when the support system is not there.
Let me share some real-life stories of startup owners and entrepreneurs I have met.
First is a Singaporean, who spent a good two years building a fintech payments solution. At the last minute, a key partner pulled out without explanation, causing the entire product to collapse.
The founder shared that the condemnation and harsh words he got from those around him remain etched in his mind to this day, and he has decided it is not worth it to try to launch another startup.*
I also mentored one startup founder who was declared a bankrupt a year ago after his startup failed. His parents went hard on him, saying his fate was well deserved, as he gave up a stable job to launch the business.
Then there was this Singaporean founder of a tech startup who had shared how he had to lay off an entire department as the product they had created was no longer viable. He had personally known these people and their families for years.
It was unfortunate that the other departments were unable to absorb the retrenched team. He stood on the rooftop of a building for hours with his mind blank, unable to cope with the shame and letting down these people who stood by him.
So what can be done to help our entrepreneurs and startup owners?
First, Singapore society needs to see failure in a new perspective.
Peter Ho, CEO of engineering firm Hope Technik, once told me that the creation of innovative products starts with a lot of “oops, there we go again” and head banging.
For this reason, he does not set targets for an engineering invention to work the first time. “When that happens, you will find project managers being very conservative and the outcome will be less than satisfactory,” he said.
“There is no hard and fast rule on the number of failures. In order to attain excellence, there must be continuous repeated tries until you deliver success.”
A startup founder should therefore not be ashamed when failure happens. It is to be expected and part of the journey in building success.
Second, startup founders need to build a better support network of loved ones, mentors and fellow founders. This is the trusted circle with whom one is free to share challenges at work, to hear a different perspective and to receive encouragement and be energised.
A founder whom I mentored shared with me that he was on the verge of a nervous breakdown and contemplated suicide. But an encouraging word from a loved one turned him around positively to work out the business problems. One should never doubt the importance of a support network.
Third, Singapore’s educational institutions can relook their entrepreneurship courses to include modules or electives on failure.
I had the privilege of working with several of our institutions on their entrepreneurship courses. Unfortunately, these are run using the methodologies of building a successful startup. Grades are based on how good the business plan is created and how product validation is done, but it ignores the realities of running a real business.
It is important to include the topic of startup failure, what can go wrong and how to address these mistakes. There should also be case studies on failed businesses and the takeaways.
Last but not least, those who have failed should be brave enough to share their stories.
Take for example, Khoo Kar Kiat, who founded FastBee. He had shared publicly about the failed startup.*
He tells me that he is now part of a venture capital team in a large multinational firm, focusing on innovation. He credits his startup experiences and lessons learnt in securing his job. To him, there is value to be gained from startup failures which brought him to where he is today.
We need more people like Kar Kiat to be brave enough to share their failures and lessons learnt.*
An entrepreneur should not need to feel ashamed about failing, because failure is often an ingredient for success in business.*
Singapore still has some way to go in cultivating such a mindset here. The sooner we change our attitudes, the better it is for the country.