Failure is difficult for most people to admit. Perhaps this is because we live in a culture that tends to reserve all praise and rewards for people who are successful in life and in business.
When an entrepreneur fails in the tech industry, he or she should realize not all is lost. Once the failure is acknowledged, there will be many things to learn that will support future success.
Know When To Say When
The last thing you will want to do after a significant investment of time, money, and energy is to admit you have been defeated. However, once it becomes obvious your business venture is headed for failure, you can only waste more resources continuing forward with the project.
Holding on to a failed business too long will not only negatively impact you from a financial perspective, but you will also lose energy and motivation that could be better aimed in another direction. Do not hold on to a business that is not progressing your position.
Be Wary of Fast Money
It can be tempting to implement strategies to recoup money quickly once you have invested all you have financially into your technology company. Other times, it is simple greed that causes entrepreneurs to chase the quick buck.
One example of this concept is the company LA Gear. The CEO of the company grew the business venture from a value of less than $20 to more than $800 million. The CEO then ruined the company in pursuit of 'high dollar' opportunities.
The company diminished its brand by selling products at deep discounts, began to invest in products unaligned with their core competency, and manufactured low-end products to be sold at Wal-Mart. These actions were taken in pursuit of fast money but instead instigated the company's destruction.
Don't Be Defined By Other Companies
It is good business practice to identify your direct competitors and stay abreast of their activities. And while there will be times when a reaction to a competitor's actions is warranted, the actions of competitor companies should not overly influence the business strategy of your company.
An example of this is the failed promotion by the Coca Cola Inc. when it created New Coke. The move was in response to the Pepsi Challenge created by Pepsi CO. The Pepsi challenge provided blind taste tests where consumers did not know if they were drinking Coke or Pepsi. Pepsi Co ran a campaign of commercial advertisements that showed consumers choosing Pepsi time and time again during taste tests. Coca Cola responded by changing the formula of its soda and the results proved disastrous.
Don't Try to Do Too Much
It can be tempting to try and exploit multiple markets at once but this can be a dangerous proposition. Kmart was once the only national discount chain in America and this model worked well for them. As time went on, the company set its sight on a wealthier target audience.
Competitors Walmart and Target focused on price and differentiation respectively in the early 2000s. Kmart tried to incorporate both these strategies and ultimately diluted its own brand. The market share of the company declined sharply and Kmart declared bankruptcy in 2002.
Many new entrepreneurs tend to take a hands-on approach with most aspects of their technology business. This is more than understandable when a sizable emotional, psychological, and financial investment has been contributed to the business.
As a business grows, this tendency will need to change. The owner that keeps their hand in all aspects of business operations can create an environment that seems intrusive to their workers. A key element of success will be to learn when and what to delegate.
This is one element of running a business that can be improved by debriefing employees after a failed business venture. You can use an exit interview questions and answers pdf to assure you get the answers you need to develop a better understanding of what tasks you need to delegate next go around.
The Bottom Line
All is not lost when a business venture fails. A failure in the technology industry should be viewed by the owner as a chance to revamp their strategy and prepare for future success. The five strategies above can prove beneficial to a tech business owner looking to regroup after a failure.