Why you need to fail to succeed in online business

It’s a well-worn business cliché that failure is a good thing.

The autobiography of any entrepreneur will provide stories of disasters that became formative moments in their careers; lessons learned that were crucial to long-term success.

Perhaps entrepreneurs of the calibre of Duncan Bannatyne and Alan Sugar did make it by surviving catastrophe – but for every Richard Branson who recovers, there are a hundred John Smiths that don’t, and that’s a risk most of us aren’t willing to take.

Adopting an ultra-safe, conservative approach can lead to stagnation and inevitable corporate death

We’re not all aiming to be the next Theo Paphitis. Most of us are merely looking for financial stability, job satisfaction and control over our own time, so I suspect this emphasis on failure fostered by the great and the good is one reason many would-be entrepreneurs hesitate. It’s hardly encouraging to be told that you have to fail in order to succeed, as most of us can’t afford the time or cost of failing.

For me, failure is neither something to aim for nor to welcome. No business is without risk, and adopting an ultra-safe, conservative approach can lead to stagnation and inevitable corporate death; balancing the need to innovate with the resultant risks is probably the most underrated of business skills.

Painful catastrophes

It’s become fashionable to boast about how often you failed on the road to success, but I think that’s missing the point. Your fellow macho entrepreneurs might admire these business scars, but your bank manager and family are less likely to be impressed. You can learn just as much from success as failure, and it’s far more enjoyable.

So how do you grow, innovate and learn while avoiding painful catastrophes? My approach is to treat each innovation as a scientific experiment, which is only a failure if it yields no result. Each experiment’s conclusion is its output, rather than money made or lost.

The next step is to run a second experiment that either reinforces or reverses this result. By reiterating this process you’ll either get a working innovation or you’ll know it isn’t going to work, but the key is to be dispassionate. As far as humanly possible you shouldn’t care which conclusion is reached, only that you conduct it as objectively as possible so the result is meaningful.

Of course, if your house is riding on the outcome it becomes difficult to remain detached, and so experiments should always be viewed, like marketing, as necessary costs: your job is to minimise that cost and maximise the results. Keep them as small in scale and as cheap as you can.

New ways to advertise on Facebook

In my last column, I wrote about Facebook communities, and my reluctance to pay for Facebook ads to drive traffic to my pages.

However, the social network recently introduced new ways to publicise businesses, and so I was eager to find out how effective these are.

They’re called Sponsored Stories, and they work by placing what’s effectively an ad in a specific position on the right of users’ Facebook pages. Unlike a status update or a “like”, this ad doesn’t scroll off the page, so you get good exposure.

The most widely useful story type is the Page Like Story, which displays an ad on the pages of friends of your fans that says a user likes your page. At the time of writing, MakingYourOwnCandles has 220 UK-based Facebook fans, which means that such an ad has the potential to appear on the pages of their 48,000 friends (we’ve restricted it to a British audience, all of whom had to be aged 18 or over).

A Page Post Story shows an ad to your fans every time you post a new update to your page, so in our case that means it appears to those 220 people. The jaw-crunching Page Post Like Story type is triggered by a fan of your page “liking” one of your Facebook updates, whereupon the ad would appear on the pages of their friends. Obviously, the number of times this ad would be seen depends on how many fans “liked” your post.