Why Telling Your Story After a Failed Business Venture is Worthwhile
By Eric Hollenbeck
Entrepreneurs who experience a business failure benefit from sharing their stories with others, according to new research from the WSU Carson College of Business.
In the study, coauthored by WSU entrepreneurship professors Rohny Saylors, Amrita Lahiri, Benjamin Warnick, and Grand Valley State University management professor Chandresh Baid, researchers looked at blog postings from entrepreneurs following failed business ventures. They examined how the shared stories helped entrepreneurs process their experiences and move forward in an article published in Entrepreneurship Theory and Practice.
The findings add to researchers’ understanding of entrepreneurship and reveal how talking or writing about an experience can help bring about a greater clarity of purpose.
Similarly, the stories entrepreneurs tell shape who they become, Saylors says.
“This changes not only how others see them, but also how they see themselves,” he says. “If someone’s goal is to continue working in startup companies, then it’s valuable to encourage them to revise their ideas and avoid placing blame on things they cannot control.”
While some follow the path of serial entrepreneurship—starting one business after another until “something sticks”—the entrepreneurial path is not always linear, the researchers say. Some entrepreneurs choose to work in other organizations in the same industry, while others move on to different industries, temporarily work elsewhere, or take time off before eventually founding another business.
“Through this study, we were able to explore a more nuanced view of entrepreneurship by connecting how entrepreneurs make sense of their failed business to their future career paths,” says Lahiri.
Responding to Failure: A Keystone Moment
The researchers studied 165 blog posts of entrepreneurs whose tech companies failed between 2014 and 2016. They found a business failure can often lead to an identity crisis for entrepreneurs, causing them to cast doubt on their chances of succeeding at future business ventures. Some entrepreneurs use storytelling and personal narratives to better understand why their idea failed and how they might refine or improve on it, the researchers say.
This activity also applies to processing significant life events, according to the study’s authors. A previous study in 2020 found that individuals who either wrote about or tape-recorded their worst life experiences reported improved life satisfaction and health compared to those who didn’t share their experiences.
“The stories entrepreneurs tell influences how well they thrive,” says Lahiri. “Not just from a professional standpoint, but also in regard to their mental well-being and self-identity.”
Clarifying the Path Forward
Although we often think of the lone entrepreneur grinding away day in and day out to make their dream a reality, entrepreneurial thinking is not just for startups, researchers say.
Companies both large and small benefit from employees who have entrepreneurial mindsets. Those employees help drive innovation, recover faster after failures, and find solutions to organizational challenges.
In addition to sharing both positive and negative entrepreneurial experiences, the researchers also suggest organizations encourage their employees to focus on what makes them excited about entrepreneurship, learn to identify what went wrong, and move on.