Entrepreneurs know that failure goes hand in hand with success. It’s rare for one to realize their dreams, goals, and objectives without hitting a few obstacles along the way.
The ability to handle failures is what separates dreamers from achievers. It takes humility, guts, and nerves of steel to brush off a disappointment and get back in the game.
Virtually all legendary entrepreneur stories include pushing through setbacks and hardship that would turn others off. And the bigger the disaster, the better the story.
People still talk about how Thomas Edison, Walt Disney, and Alexander Graham Bell repeatedly failed on the path to success. Want to be inspired by something a little more contemporary?
Here are five entrepreneur failures and success stories.
1. Michael Hyatt’s Publishing Company Runs Out of Money
Michael Hyatt is a wildly successful serial publishing entrepreneur and CEO who once built up a $250 million publishing company.
He’s now a best-selling author, speaker, and the founder of Full Focus: a planning and performance coaching company.
But Michael made a rookie mistake before he achieved all of these wins. He once ran out of cash.
“In 1991, I – along with my business partner – suffered a financial meltdown. We had built a successful publishing company, but our growth outstripped our working capital. We simply ran out of cash.” – Michael Hyatt.
Poor cash flow management is said to be behind 82% of all business failures. It’s something that all entrepreneurs have to get a good grip on.
Michael discovered this the hard way. It would have been easy for him to start throwing blame around, blame the market, or blame his partners. But he persevered, took complete responsibility, and plunged back into the business game.
Years later, Michael’s commitment to personal responsibility and growth through hardships has manifested itself in resounding success.
Michael’s tenacity, focus, and energy brought him and the publishing companies he led through the Great Recession, the shift from print to electronic media, and the shift from traditional marketing to social media made it through the recession.
His latest venture, Full Focus, has been growing over 60%, year over year, for the past 4 years.
Michael Hyatt has a lot to share on leadership development, being vision-driven and focused, and how to stay high-energy throughout your challenges.
Check out his interview with Guy Kawasaki for a taste.
2. Alex Drysdale’s Crik Nutrition Gets Thrown Off Kickstarter
Alex Drysdale wants you to swap the whey and pea protein for a serving of crickets. To do that, he first had to get his product manufactured and funded.
Alex is the founder of Crik Nutrition – one of the first cricket-based protein shakes to hit the market. He met one challenge after the other. To begin with, most manufacturers didn’t want to process insects at their factories. Just finding one that would work with him was tough.
Alex spent quite a bit of time getting his product to be commercially viable. He did formula development, market testing, a bit of influencer marketing, and took the product to a few fitness events.
Alex relied on his savings and bootstrapping to get through Crik’s earliest stage. He then turned to Kickstarter to crowdfund more money when Crik was ready to grow. He set up an entire Kickstarter campaign that included media articles to generate attention.
And then Kickstarter canceled him right before the launch date.
Why? Who knows. According to Kickstarter, selling protein powders wasn’t allowed on the platform. And yet, several conventional protein powder campaigns were running at that time.
The real problem had to be the bugs. This was back in 2015 when no one was really selling cricket or insect-based foods. The market wasn’t familiar with it, and other businesses were unwilling to take the risk.
Kickstarter refused to reinstate his campaign and then banned his entire account. Alex had to scramble. He made a last-minute shift and took his fundraising campaign over to Indiegogo. But he still lost traction and momentum.
It took a lot of hustling, phone calls, social media marketing, and personal one-to-one promotion to get the funding he needed.
Getting booted from a crowdfunding website might not seem like the biggest disaster. But it’s something that would throw a lot of people off, especially if there’s an entire marketing campaign built around it.
Not Alex. He had the grit it takes to push through setbacks and disappointments. If you’re introducing a revolutionary new product to the marketplace, you’re going to need a lot of grit yourself.
Crik Nutrition is still around under its new name, Human Improvement. You can find cricket-based protein shakes in vanilla and chocolate. That’s as long as it isn’t sold out.
And Kickstarter has hosted campaigns for at least three insect-based food products since then.
3. Kate Stillwell’s Jumpstart Insurance Loses $100 Million in Funding
Imagine raising the $100 million it takes to fund your innovative new startup. Now imagine having that money slip right out of your fingers… 8 days before you launch.
That’s what happened to Kate Stillwell, founder of Jumpstart Insurance. Jumpstart provides its customers with instant insurance payouts when there are natural disasters.
Insurance is a capital-intensive business. Insurers can’t operate without their own form of insurance – called reinsurance. A partnering reinsurer provides each insurance company with a certain amount of capital reserves to back things up.
Jumpstart needed to have $100 million in capital reserves. Kate found a large insurance company that was willing to partner with her. After 16 months of diligent work, it was time for the reinsurer to sign the final agreement. And that’s when it all fell apart.
It took only one holdout at her partnering company to tank the entire deal. Jumpstart was just too risky for them, and the would-be reinsurer pulled out 8 days before Kate was set to launch.
Kate’s fundamental problem is that she chose to work exclusively with this partner, and she did so without getting a guaranteed funding agreement. Everything rested on that $100 million partnership. Kate now had no capital reserves, no initial funding, no backup plan, and no way to start running.
The worst-case scenario meant closing her startup for good. The best-case scenario meant delaying the launch for months or even years until she could find a new partner.
Kate had to break the news to her family and her team of eight. Then she had to start making layoffs. Kate’s team dwindled from eight to six to two, then zero.
This is where most entrepreneurial stories would end. It would be a story about failing hard, getting wiped out, closing shop, and moving on to something else. For Kate, it’s only one part of her origin story.
She summoned up her inner strength, kept pressing on, and was able to land a new partner within a year.
4. Kathryn Minshew Loses Control to Her Co-Founders
Kathryn Minshew is the CEO and Founder of The Muse – a career development platform and one of Fast Company’s 50 Most Innovative Companies in the World.
Kathryn oozes success. She’s a young, former McKinsey analyst who transitioned into entrepreneurship and made it big.
But The Muse isn’t her first business. Kathryn’s earliest venture as an entrepreneur was PYP Media.
PYP Media was another career-related site. Kathryn worked on the idea while still at McKinsey, then launched it with a co-worker and two other women. Things went fairly well until a simple advertising-related disagreement grew into a conflict that broke down the partnership.
Kathryn had been more focused on PYP’s mission than its legal structure. When things broke down, two of her co-founders were able to seize control of the company and all its assets – including the life savings Kathryn had poured into it.
“I woke up one morning to find my website access, as well as that of [co-founder] Alex and our entire team, shut off. I felt completely humiliated like I had failed them and myself. I also ended up losing the entire life savings I’d put in the company–about $20,000. We could have sued, or we could have started over. We chose the latter.”
It was nasty and rough. Kathryn wasn’t able to get anything back. She walked away from the business with only her ideas, vision, and determination to restart.
Her business wasn’t the name, website, savings, or other assets. It was the passion and purpose behind it. Kathryn chose to pour her energy into a fresh new venture, and The Muse was born.
5. Mary Clavieres Struggled with Inventory Management in Brief Transitions
Mary Clavieres is the founder and CEO of Brief Transitions, a disposable postpartum underwear brand. Mary founded her company after giving birth via C-section and realizing that women couldn’t purchase disposable mesh postpartum underwear in stores.
Hospitals would provide them with a pair during their stay, but they were on their own after that. These much-needed items were considered medical supplies and weren’t sold to consumers in stores.
Mary decided to bring post-partum garments to the consumer market. Her business is a hit now, but getting things running smoothly was tough.
Mary struggled with inventory management and fulfillment. Things like clearing customs in time and making accurate shipping time estimates were tough to handle on her own.
Virtually every eCommerce or physical product entrepreneur has to work through some inventory management challenges – especially once it’s no longer feasible to manage, pack, and fulfill on their own.
Mary made it through her growing pains by automating her processes and finding the right fulfillment center to work with. Automating and outsourcing the menial tasks leaves her with more time and energy to focus on higher-level activities.
Entrepreneur failures and success always go together. Some failures are dramatic, like losing a $100 million partnership. Others are a little more mundane, like getting booted off a platform for no apparent reason. But there are always challenges to get through.
These entrepreneurship stories show how five individuals worked through their obstacles to build winning businesses.