Learning From Business Failures

An important realization: Failure is a skill. 4 steps to use your next failure to succeed: We've all felt the pain: • A bad review at work that caught you off guard • Passed up for a promotion you felt you had earned • A weak presentation in front of the leadership team • Harsh feedback from a colleague or partner • A missed quarterly sales quota or target Here's the system I developed to fail better—to handle, deconstruct, and use every single failure to set the conditions for future success. Step 1: Set a Failure Timer Give yourself a fixed amount of time (~24 hours) to feel frustrated or angry about the failure. During this time, you don't need to do anything but sit with the feelings and emotions. Allow yourself the grace of that period, but when the time is up, you move forward to the next step. Step 2: Become a Scientist Once you've made it through your grace period, it's time to learn. You need to approach the failure as a scientist does an experiment: Gather Information: What happened? How did it differ from my expectation? Analyze Information: Why might this have happened? What elements of my process might have contributed to this outcome? What are the underlying insights from the unexpected result? The important piece here is that the cold, emotionless, disciplined analysis establishes accountability for the failure that sparks you into your next action. Becoming a scientist means determining the variables that are within your control, understanding them in detail, and focusing your energy on improving them for the next attempt. Step 3: Time Travel Imagine yourself one year from today: You're in flow, celebrating a great success. Looking back at the prior year, you point to the failure you just experienced as the turning point, as the critical moment that set the conditions for this win. Ask your future self a few questions: • What actions did you take to make it so? • What changes did you make in your life after the failure? • What behaviors, mindsets, and routines did you adapt? Use these questions to guide your actions in the present. Step 4: Take Action In my experience, the hardest part of coming back from any failure is putting yourself back out there. Information is nothing without action. In the wake of a failure, default to action. Remember: Action doesn't have to be perfect for it to be right. The world isn't run by perfect people who never failed. The world is run by imperfect people who failed over and over again—but who used every failure to set the conditions for their future success. Maybe that failure you just experienced isn't the end after all. Maybe that failure you just experienced is your starting line. P.S. Interested in self-improvement? Join 800,000+ others who get my free newsletter: https://lnkd.in/esGsF85Q If this resonates, repost to share with others ♻️ and follow Sahil Bloom for more in future. Visual by the talented Pejman Milani!

I quit. I quit reading a book by one of my favorite authors when I was 77% finished (according to my Kindle app). Despite investing hours in the story, despite loving everything else this author has written, and despite being so close to the end, I realized I wasn't enjoying it anymore. The book had become a chore, not a pleasure. So I closed it, put it down, and moved on, and it felt incredibly liberating. We've all been taught to "finish what we start," but sometimes the most productive thing we can do is quit. The sunk cost fallacy tricks us into continuing investments of time, energy, or resources simply because we've already invested so much. But those costs are gone whether we continue or not. In our careers and personal lives, we often stay stuck in situations that no longer serve us because we can't bear to "waste" what we've already put in. We stay in jobs we've outgrown, continue projects that have lost their purpose, or persist in relationships that have run their course. The truth is, recognizing when to stop isn't giving up—it's strategic decision-making. It's about valuing your future time and energy over your past investment. Here's how to resist the sunk cost trap: 1. Ask "If I were starting fresh today, would I begin this?" If the answer is no, consider stopping. 2. Set decision checkpoints before you start any major project or commitment to regularly evaluate whether to continue. 3. Focus on future value, not past investment when making decisions about what to pursue. 4. Practice "small quits" like leaving a boring movie or stopping a book you're not enjoying to build your "quitting muscle." 5. Reframe quitting as "strategic redirection" rather than failure. You're really just choosing a better path forward. 6. Calculate the opportunity cost of continuing versus what else you could do with that time and energy. 7. Remember that persistence is only a virtue when you're pursuing the right things for the right reasons. Sometimes the bravest thing you can do is close the book and pick up a better one. What have you quit recently that freed you up for something better?

In school, we’re taught that failure is something to avoid at all costs. But failure is actually required to reach your long term goals. Here are 5 ways failure helped me reach mine: 1. Building A Music Blog In 2011, I started a music blog. It never got more than 200 total visits. I eventually shut it down. But it taught me how to set up my own website and the basics of internet marketing, which allowed me to start Cultivated Culture without any funding. 2. Building A Social App In 2014, I had an idea for an app. I spent dozens of hours mocking it up and $1,000+ on prototype. Two weeks later, two other companies launched identical apps with venture funding. But it taught me the basics of developing a piece of software, and allowed me to build our current suite of job search tools. 3. Freelancing I wanted to change industries, so I freelanced to gain experience. I didn’t get any clients from the first 1,000+ emails I sent. But it taught me that “sales” and outreach are volume games, as well as giving me data that I eventually used to optimize, get clients, and leverage in my networking efforts to land referrals. 4. LinkedIn (Take 1) I shared my first piece of LinkedIn content in 2016. I did it for about two weeks before feeling dejected that I wasn’t getting any reactions or views. That eventually led to the realization that, if I wanted to grow, I needed to focus on creating content instead of outcomes at the beginning. 5. LinkedIn (Take 2) About six months later, I starting sharing LinkedIn content again. This time, I kept it up for a month before running out of ideas. I had to stop again, but it eventually taught me that creating content is about building a repeatable system vs. just writing when inspiration strikes. 6. The Outcomes Of Failing Every one of these failures taught me lessons that I eventually leveraged successfully down the road. I was able to start my own business and bootstrap it without needing funding or paid ads because of everything I’d learned from past mistakes and failed ventures. Every one of those experiences is a lesson, if you’re open to seeing it.

In a recent speech, FDIC Chairman Martin Gruenberg identified several recurring themes the Savings and Loan crisis of the 1980s, the Global Financial Crisis of 2008, and the regional bank failures of 2023. [Link to full Gruenberg speech in comments.] They are all lessons to learn from when investing in real estate - particularly now: • Interest Rate and Liquidity Risk: Financial institutions often underestimated the impact of fluctuating interest rates and the importance of maintaining adequate liquidity. • Asset and Deposit Concentrations: Heavy reliance on specific asset types or deposit sources made institutions vulnerable to market downturns. • Leverage and Rapid Growth: Excessive borrowing and swift expansion without sufficient risk management led to instability. • Inadequate Capital: Many institutions operated with insufficient capital buffers, limiting their ability to absorb losses during economic stress. • Poorly Understood New Activities and Products: Engaging in innovative financial products without fully grasping the associated risks contributed to failures. • Interconnection with Non-Bank Financial Entities: Close ties to less-regulated financial firms amplified systemic risks. • Poor Management and Regulatory Failures: Weak internal governance and lapses in regulatory oversight allowed risky practices to persist unchecked. As the new administration’s policies - tax cuts, deregulation, and aggressive trade maneuvers – fuel short-term economic expansion, expect a surge in capital chasing deals, looser lending standards, and inflated asset prices. The cycle will feel like a boom, but history tells us it won’t last. When liquidity tightens and the market turns, overleveraged players will get wiped out, leaving behind distressed assets at steep discounts. For investors who see this coming, the strategy is clear: • Avoid FOMO Investing – Don’t buy just because everyone else is. If a deal only works in a perfect economy, it won’t survive the downturn. • Lock in Fixed-Rate Debt – When rates are artificially low during a stimulus-driven boom, take advantage of it - but only on deals with strong fundamentals. • Build Cash Reserves – Liquidity is king when the market shifts. The best deals appear when others are forced to sell. • Look for Overleveraged Syndicators – When the bubble bursts, those who overpaid and over-borrowed will need an exit. Be ready to pick up quality assets at deep discounts. Learning from the mistakes Gruenberg talks of from prior downturns one thing is for sure; the winners in the next cycle won’t be those who ride the bubble up – it’ll be those who are positioned to buy when it bursts. *** If you found this commentary valuable, subscribe to my newsletter, where I share insights from over 30 years of real estate investing as I navigate new opportunities in the coming months. You can find the subscription link in my profile Adam Gower Ph.D.

If you've been given these bits of bad business advice, you need to be wary of them. Here's what to do instead: 1. “Hire good people. Leave them alone.” Instead: Hire great people. Help them be their best.   Great people want to achieve more. Ignore them and you’ll lose them.   You, their boss, should be there to support, coach, and open doors for them. 2. “XYZ tactic worked for me. So, you should do it the same.” Instead: Learn from principles. Be wary of tactics.  Advice comes in two forms:   • Tactics - always changing, often can’t be trusted   • Principles - timeless, broadly applicable.   Trust the latter. 3. “Use these 5 questions to hire great people.”   Whatever those questions are, smart candidates are going to be 10 steps ahead of you. They’ll prep great answers to whatever the hot questions of the moment are. Instead: Get to know everything about a candidate. Learn their past results. Do in-depth reference checking.   Then you can predict future performance with some certainty. 4. “Always keep an abundance mindset.” It’s a nice thought. But some games in business actually are zero-sum.   An abundance mindset all the time (giving away everything, assume there’s always another fish) can cost you big time.  Instead: Give what you can. Help others but don’t give away the farm. 5. “Focus on daily habits for a great outcome.” I spent decades of my life focused on the day to day but you also have to spend time on the big picture. Instead: Set a long-term plan. Develop good habits to help you get there.   Ambitious goals unlock greatness. 6. “Everyone can be an entrepreneur.” Some people are just wired for entrepreneurship, and chafe at regular jobs. (Like me.) But it’s really hard, carries a lot of risk, and takes a huge amount of work. Instead: Do what makes you happy. Any path is acceptable.   A ton of people will be much better off in a regular job. Reliable income, stable schedule, less risk, more time to focus on other things… those are all valuable things to pursue! 7. “Rich, successful people know what they’re talking about.”  More money doesn’t mean someone is wise. Instead: Everyone has something to teach you. Wisdom comes from a broad perspective. 8. “Just focus on delighting customers. You’ll be fine.” You can delight a customer and lose money. The customer doesn’t know what they actually want. Instead: Build a customer-focused organization.  9. “[Industry] is a dead industry. Avoid it.” Tailwinds in business are factors in your favor that make money-making easier. Every industry has tailwinds. You just need the right approach. Instead: Money can be made in any industry. Just figure out which way the wind is blowing, and let it fill your sails. LinkedIn cut me off so the last two are in the comments. Do you have any other bad pieces of business advice you've heard? Comment them below!

Words of wisdom from two wise men. Not to be confused with THE three wise men At the Ariat Dirt World Summit I was reminded by Randy Blount and Herb Sargent that good times can be really bad times for contractors. "More firms go out in good times than bad times...a bad job takes you down...need to grow right" Construction firms face numerous challenges, and going out of business is often the result of a combination of factors. Here are 10 reasons construction firms fail: 1. Poor Cash Flow Management Insufficient working capital to cover operational expenses, especially when projects experience delays in payment. Overextension on multiple projects without adequate financial planning. 2. Underbidding Projects Winning bids by underestimating costs, leading to slim or negative profit margins. Failure to account for unforeseen expenses, changes in scope, or cost overruns. 3. Lack of Leadership and Management Skills Poor decision-making by leadership, including ineffective project management. Lack of strategic planning or succession planning for key roles. 4. Labor Shortages Difficulty in attracting and retaining skilled labor, leading to project delays or poor quality. High turnover rates increasing recruitment and training costs. 5. Economic Downturns Reduced demand for construction due to economic recessions or market downturns. Over-reliance on a single market segment or geographic area. 6. Inadequate Risk Management Failure to identify and mitigate risks such as safety issues, legal disputes, or weather delays. Lack of proper insurance coverage leading to catastrophic financial losses. 7. Excessive Debt Overleveraging through loans or credit to finance growth or equipment. Inability to meet debt obligations due to project delays or economic conditions. 8. Poor Project Execution Failure to deliver on time, on budget, or to quality expectations. Inefficiencies in processes and lack of technology adoption to streamline operations. 9. Legal and Regulatory Issues Non-compliance with building codes, labor laws, or environmental regulations leading to fines or project shutdowns. Contract disputes with clients, subcontractors, or suppliers. 10. Overexpansion Rapid growth without adequate infrastructure, staff, or financial stability. Diversifying into unfamiliar markets or taking on projects beyond their expertise. If you don't like those, how about these • Starting for the Wrong Reason • Failure to Advertise and Market: • Lack of Differentiation: • Unwillingness to Delegate: • Unprofitable Business Model: • Underestimating the Competition: Each of these is known and fixable. There are experts in each of these areas to help you. Which one is the biggest threat to your firm?

I kept this quote on my office whiteboard for seven years: "Good judgment comes from experience. Experience comes from bad judgment." It reminded me daily that wisdom has a price. In 2013, I made a decision that cost us over six figures. One of our best partners sent us a client. I was certain the client needed a complete strategy overhaul. I pushed hard for it. Invested resources. Built the case. And, they hired us! They fired us three months later. The mistake? I solved the problem I wanted to solve, not the one they were paying me to fix. That failure taught me what no MBA could: ↳ Listen before you prescribe ↳ Validate before you invest ↳ Ask twice as many questions as you think you need Now when young entrepreneurs tell me they're afraid of making mistakes, I share this truth: "Your mistakes are your education." Every bad call sharpens your instincts. Every wrong decision reveals a blind spot. Every failure builds your pattern recognition. The executives who grow fastest treat mistakes as data. They document what went wrong. Extract the lesson and then apply it moving forward. Think about the leaders you admire most... they didn't get there by avoiding failure. They got there by failing faster and learning deeper than everyone else. Your next mistake won't be a setback. It's tuition for wisdom you can't buy any other way. Make the decision, take the risk, and learn the lesson. Because good judgment really does come from experience. And experience comes from bad judgment. What expensive mistake taught you the most about leadership?

7 Lethal Ways to Kill Your Business Fast Avoid these to build a thriving business (without burning out.) ↓ Your expertise is undeniable, but solid business acumen is what determines success. No founder can be an expert in everything—eventually, the key is leveraging other people’s skills. After coaching hundreds of wellness founders, I've noticed common threads that hold them back. Here's what you need to watch out for: ↓ 7 things I see on repeat (that you can avoid): ➠ 1. Neglecting Business Acumen: Many founders focus solely on their passion and forget the business side. You need to embrace learning key business skills like financial literacy, marketing, and operations management. ➠ 2. Skipping Systemization: Without systems, every task becomes a reinvention of the wheel. Find yourself doing something more than once—systematize it. Peace of mind and you save time. Automation is your bestie here. ➠ 3. Overlooking Delegation: Trying to do everything yourself limits your growth and leads to exhaustion. Identifying tasks that can be delegated to others can empower your team and enhance your business efficiency. (It's about doing the most important things first.) When you are the constraint in your operation, you need to evaluate your actions and ensure you're prioritizing your economic goals first. You need money, it’s fuel for the business. ➠ 4. Ignoring Digital Strategy: In today’s world, a strong online presence is crucial. From social media to email marketing, ensuring you have a robust digital strategy is key to attracting and retaining clients. Don't get trapped trying to serve too many platforms. Pick the one where your prospects are and master it. ➠ 5. Failing to Plan for Growth: Many founders don’t anticipate the challenges of scaling. Planning for growth involves understanding your capacity, setting economic goals, and preparing financially and operationally for expansion. It’s important to build services that have low operational drag as you scale. The scaling is challenging enough. Simple scales, fancy fails. ➠ 6. Letting Passion Overrule Pragmatism: While passion is important, it must be balanced with practical business strategies. This means sometimes making tough decisions that might not align perfectly with your initial vision but are necessary for sustainability. Prioritize your survival! You cannot help people if you crash trying to get off the ground. ➠ 7. Lack of Resourcefulness: Solopreneurship is tricking people into believing they should do it all. That’s giving up steady income for even longer hours. That's not the dream. That’s a bad trade. You want to make a good trade. More freedom. More impact. (More profit makes both happen.) So what you need is leverage. But what kind of leverage? ↓ Competitive Advantages. ➠ Continued in the comments. ♻️ Repost if you found this helpful ♻️ Follow me and hit the bell 🔔 for more. Which one (1-7) brings you new awareness? 💬 ↓

Leaders, like everyone else, are human, and, at times, they fail. Depending on what kind of leader they are, how they respond to failure tells us a lot about them and the people they lead. “Most of the time, the failure of any business is attributed to a bad business idea, undercapitalization, poor marketing strategies, or unfavorable market environment. However, I believe that the real reason for the failure of any business is a lack of leadership, which is driven by a purpose and vision,” according to Amit Marwah, Leadership and Executive Search Consultant. Marwah believes a “majority of people generally perform to a minimum acceptable standard. These standards could be perceived standards in their heads or generally accepted standards in the organization”. Leaders must be aware of what makes them fallible to avoid failure. Here are seven major business challenges tied to failure, according to Mark Moses, CEO of Coaching International: 1)     Failure to Communicate-Where there is no commitment to consistent and effective communication, there is a lack of personal connection and minimal translation of important information like organizational strategy. 2)     Lack of Accountability- Knowing where your people stand in relation to your goals and key initiatives takes discipline and the ability to monitor and measure DAILY performance. 3)     Fear of Firing Non-Productive Employees - the inability to remove or change an employee who has been an impediment to success; however, because of their loyalty to the organization, they won't remove them. 4)     Lack of Alignment-When not much gets accomplished because people aren't aligned with company strategy, or they lack the ability to align and work cross-functionally with others. 5)     Lack of Clear Vision- An organization can lack direction without vision. When no one can articulate where the organization is going, there are feelings of being uninspired and unmotivated to achieve. 6)      Poor Execution-Failing to have a plan for your strategy to act upon and lead from. When this is absent, the organization can become aimless in its efforts from day to day and week to week. 7)     Default Company Culture- no active, conscious effort to establish and adhere to standards, behavioral lapses happen, and everything begins to be tolerated, signaling the end is near. Leaders carry much responsibility. Not only do they own their roles and responsibilities, but they also own everything related to those within their charge. The good news is that the leader who knows their team well also knows what’s happening inside of it. Working to remove any of these challenges will free up the time for leaders to support, properly train, and develop other team members.   Still, as leaders, we need to develop the courage to recognize and effectively deal with any challenge. We cannot fear failure. #ceos #leadership #failure #execution