Starting a company is risky busines and many successful entrepreneurs experience failure at some point in their career.
To address this topic, NCET held a panel discussion luncheon titled Failure: Success in Progress Wednesday, Feb. 17 at the Atlantis Resort Casino Spa. The event provided a platform for local entrepreneurs to talk about business failures and what they learned from those experiences.
“I think everyone knows entrepreneurship is risky,” Doug Erwin, EDAWN’s Vice President of Entrepreneurial Development and the panel moderator at the event said. By discussing the experiences of other entrepreneurs, “there is a lot to be learned from that.”
Panelists at the event included Jason Dekker, a startup investor and co-founder of eight companies, Eric Jennings, co-founder and CEO of Filament, Fernando Leal, an entrepreneur with 30 years of experience with projects that include Montage Residence and CommRow, which is now the Whitney Peak Hotel, and Kathie Priebe, chair of Reno Angels and a member of Sierra Angels.
“(Failure) is actually a critical topic for entrepreneurs,” Jennings said. “If you don’t know how to fail you are either incredibly lucky or you don’t know how to (succeed).”
Jennings, a native of Reno, as been a part of seven failed startups in his career half of which he founded and in half he was an early employee of the company. Jennings shared his near failure experience with the company Pinocchio, which has become his current startup Filament.
The company produces hardware products, which helps Internet of Things developers build and link their own products to other products and the Web. At one point the startup only had eight days before it was going to run out of money.
According to Jennings, being transparent and keeping the employees up-to-date on what was happening with the company was essential during this period. They offered their employees the option to leave the company but none of the employees left.
“This shows that the team around you is absolutely critical,” Jennings said.
As the panelists each shared their stories of startups and entrepreneurial endeavors, which had eventually failed or come close to failing, they all agreed that the lessons they learned from these experiences, have helped them succeed in future business ventures.
Priebe shared advise from an investor’s point of view.
Angel investors invest anywhere between $200,000 to $1 million in very early stages of companies. According to Priebe, angel investors know if they invest in 10 startups, typically half of their investments fail and a few will lose money or breakeven and only one will give a 10 to 20 percent return on the investment.
As an investor, she looks for entrepreneurs who are seasoned and adaptable. She also looks for entrepreneurs who can sell their product and have a road map of how they are going to execute their plan.
The panel also talked about board of directors for startups and the role they can play in a company’s success or failure.
“What leads to many failures in startups is where they raise the capital,” Leal said.
The panel also explained that many times entrepreneurs will feel beholden to keep using the original business model they pitched to their investors even after they realize it is not working. However, often times entrepreneurs need to pivot their business model once they find it is not working.
“The important thing is not so much did you fail but did you learn from it,” Priebe said.