When is failure a failure at all?
For Nikki McClay, seeing a startup that had given her years, put her effort into work, quit, and quit was not a lesson in failure.
It was a lesson in learning what works and what doesn’t.
McClay, a graphic designer, became the co-founder of a startup called IVOW AI in 2018, which wanted to use artificial intelligence for culturally aware public content.
For a loose hypothetical example, let’s say you have a company with a chatbot.
It is possible that this company eventually worked with IVOW to make sure it had something to say – that was accurate – about the women on the date, if asked.
We know that data is being sucked in and collected to help power AI tools and systems. The mission of IVOW AI was to ensure that cultural stories and history are not forgotten in the rush towards this digital transformation.
Despite having a “really strong 2019”, when the IVOWs team was able to travel and lecture on the startup’s research and broader goals, and despite show after show, US-based founder Davar Ardalan decided earlier this year that it’s time IVOW the wind has come up.
McClay says Covid-19 has been difficult for the previous company. The team can no longer attend conferences, can no longer appear in front of decision makers, and when they can stand up to the right people, they will be fired – sometimes by cutting off disapproval comments.
McLay says that at the end of a given presentation, a potential investor told them they liked what they were doing, but the quota of women-founded businesses was already full for the year.
McClay says the company wasn’t looking for a lot of money. Initially they had a one-page offer and were seeking $50,000.
The team self-financed their work. McClay says they all had day jobs.
IVOW was attention from the business community, and it was definitely hype; that it Research Reports The ones that investigated AI bias have been covered in news, podcasts, and blogs.
But she couldn’t get past that first big hurdle. Get investors, get the money, get over the hump and move on to the next stage.
It was emotional and full of highs and lows, says McClay.
She says she will have to build herself up with every whirlwind in the money holders. And then every refusal will be a crash on the ground.
“I definitely learned how to manage stress, that’s for sure.”
Starting and closing
There is some kind of accepted statistic about US startups Most of them fail. And a lot of child business in New Zealand doesn’t work.
Data from Statistics NZ shows that in 2020 (from the most recent and rigorous data set available) more than 60,000 new enterprises started, of which 9,780 disappeared before a year had passed.
else NZ . stats The data shows that, of the companies that started in 2015, 67% have survived until 2017 while 39% have made it to 2021.
Many companies fail early.
But there is a lot of optimism about New Zealand startups.
report from PricewaterhouseCoopers Consulting The Angel Association New Zealand found record growth in the number of deals and the amount of capital invested in startups in the first half of 2021.
The report, released in October 2021, found that $60 million was invested by early stage investors, representing a 60% increase in deal volume and an 80% increase in dollars invested in the same period in 2020.
New Zealand venture capitalists also invested $200 million in those deals, bringing the total investment to just under $260 million.
“These record levels of activity reflect what we see in other venture capital markets around the world,” the report said.
A successful startup is the culmination of a million individual decisions, actions, and luck, says Jack McGuire, partner at early stage investment firm Icehouse Ventures.
“Here’s the thing. Not only do you have to work incredibly hard, you also have to be lucky… Even if it doesn’t work out and you do everything right, you can still be unlucky. People can beat themselves up or feel They failed. But that’s something of the nature of a startup; it’s out of your control.”
McGuire, who works with and invests in startups, says he likes the advice of US startup coach Justin Milano, who says “You’re not your startup.”
“Because your startup has failed, it doesn’t mean you have failed. People blur identities, the startup becomes the founder and vice versa. It’s really healthy to remember that. They are separate things.”
And will the failure of a startup mean that investors will look at the next presentation with critical eyes? McQuire says Icehouse will invest in founders who have experience with a failed startup. But only if they act transparently and honestly “all the time”.
“I would never hesitate to support anyone, again, just because they failed. If anything, [failure] More effective, because they learned all these lessons and grew from experience.”
He says New Zealand’s startup economy is getting compound returns from founders, or early-stage employees, who then try again.
There is another often-overlooked statistic about startups, says Marianne Johnson, chief executive of the Christchurch-based Startup Advisory Department, but this one is about success. She says it’s rare for a founder to get a profit, let alone a big win, on his first run. A “genius” is often unique.
Instead, Johnson says, it’s the third startup most likely to succeed, and the average age of a successful founder is 45, not 20.
So you want to be founder
McGuire says he has two tips for seasoned startup founders.
Don’t do it because you think he’s a wizard. it’s not like that. He says that entrepreneurship is seen as charming but the truth is that every founder goes through tough times.
For example, he says, people often look at where Rocket Lab founder Peter Beck is now, but he got to where he is today against the backdrop of decades of tough graft and dark days.
“It’s really hard work. That’s what makes the founders so great. They do it anyway.”
McGuire says his second piece of advice may seem “nonsense”. It is to put your team first, then your customers, then your investor.
“First of all, you have to have an exceptional team. And then in order to be sustainable and succeed, you have to have great clients. And if you do those two things, well, everything else will work itself out.”
Johnson says founders should be brave, but also be compassionate with themselves as people, and be able to keep the startup out of their feelings for themselves.
“If you’re going to do something that hasn’t been done before, your chance of failure is obviously very high. And therefore, you really have to commit to your vision and a huge amount of confidence and a huge amount of ambition, in a sense, against everything he experiences every day, every obstacle, You can’t report it.”
Johnson says the founders need to delve into it with their eyes open.
“If you want an easy life, this is not for you.”
For McClay, her first foray into a startup isn’t a personal lesson in failure.
McClay says she’ll be “100%” involved in another startup — she just needs to think about what her next venture will be — and was recently looking for inspiration for a startup at Blackbird Ventures sunrise conference.
“If you fail to get a million dollars, it’s not a failure. You just didn’t get funded,” she says. It’s like anything, if it doesn’t work, it won’t. It’s not that she failed. You didn’t see it as much as you wish you would, and that picture in your head didn’t work out.”
Instead of something going wrong, McClay says the startup process is “amazing.”
“I think it is equivalent to doing some [university] grades. Personal development, business understanding, learning about machine learning. I wouldn’t have known any of these things.”