Entrepreneurs Typically Learn from Failure - Article Example

ENTREPRENEURS TYPICALLY LEARN FROM FAILURE By Entrepreneurs Typically Learn from Failure Studies, analyses,and case reviews of entrepreneurship appear to converge on the fact that the process of entrepreneurship involves a significant risk of failure. The kind of failure anticipated in the field of entrepreneurship differs from the conventional meaning of failure in the sense that entrepreneurial failure is often an expected outcome and, in many cases, it is planned for (Cope, 2010, p. 604). Entrepreneurship involves venturing into new and unknown areas of business. According to analysts, the pioneering element within the discourse of entrepreneurship entails the creation of new laws, methods, and practices. Another challenge involves lack of precedence about the opportunities available in the new field. As such, the levels of success or failure are usually based on chance and strategy (Shepherd, 2003, p. 6). The initial processes of entrepreneurship are generally considered as an experimental stage. This phase entails an assessment of the methods and strategies choses against the reality on the ground. Some studies consider entrepreneurship as a learning process. It is a process the involves the transferring of abstract ideas and strategies onto a practical level. The initial stages of entrepreneurship provide important information to the entrepreneur with regard to the kind of opportunities that are found in the field. The results provide an assessment of the nature of the field and the suitability of the chosen strategy in the actualization of the chosen strategy. In this regard, it becomes important to assess the levels of failure with regard to the opportunities, challenges and the general market forces that determine the performance within the chosen area of entrepreneurship. Analysts in the field of entrepreneurship argue that the levels of success are usually determined by the ability of the entrepreneur to access special insights into the dominant market forces that determine the levels of success in the venture. According to analysts, good entrepreneurship spirit usually involves a balance between the risks involved and the anticipated benefits. Although entrepreneurship generally involves an element of risk, good entrepreneurial opportunities is must not be conducted in a gamble. Analysts point out that entrepreneurship must be conducted through some organized method with definite timeframes in order to minimize the elements of risk. The degree of risk must be controlled through carefully predetermined risk prediction and analysis methods in order to provide sufficient safeguards against the enormity of the losses. One of the most dominant challenges in entrepreneurship is that it relies significantly on practical experiences and costs are likely to be heavy as compared in venturing fields that are generally known with sufficient background information. The translation of a business idea into a workable venture entails the application of a range of theoretical approaches that are necessary for the determination of the most applicable methods that could harness the synergies of the field towards the attainment of the desired outcomes. In essence, some of the issues that attend to the determination of the level of success or failure are necessarily determined by a range of factors that involve marketing, varieties in the range of product, the nature of management, and the place of competitors within the general aspect of business. The type of business in which the entrepreneurship venture is based also determines the levels of success of failure. In essence, there is a way in which some kinds of business are more prone to the risk of failure. Theoretically, the SWOT theory of analysis, and the PEST theory of analysis are some of the theories that attend to the entrepreneurship process (Carter & Jones-Evans, 2012, p. 51). These theories are often appropriated in terms of the capacity to shield entrepreneurship processes from the risks of failure. Some of the issues that are generally related to the development of structural support for entrepreneurship processes. SWOT theory of analysis provides a useful guide to the entrepreneurship process because by providing a useful process in ways that engage with the risk of failure as understood within the context of entrepreneurship. The entrepreneur must combine his skills, creativity, instincts, and information to develop the most appropriate approach that might shield the process from the risks associated with failure. The consideration of the PEST theory of analysis is usually regarded in accordance with the forces that condition the process of entrepreneurship. Macro-economic forces usually determine the ground upon which the entrepreneurship processes are considered. According to some analysts, there is a sense in which the political, economic, environmental, social, and technological forces determine the degrees of success or failure of the entrepreneurship process. The reality of the process is largely dependent on the ability of the entrepreneur to develop the most appropriate strategies that might help in the determination of the levels of success in the entrepreneurship process. On this level, there is a strong sense in which the macroeconomic factors tend to engage with the ideals and processes of entrepreneurship in ways that impact on the levels of success or failure of the process. Aligning the entrepreneurship process with the dominant macroeconomic factors usually supply synergies into the entrepreneurship process. Alternative perspectives contend that the size of business and duration are some of the governing factors that determine whether a business survives or fails in any new venture. Generally, some of the issues that attend to failure are regarded by the capacity of the business to regulate its own internal processes in determining the processes of change. In some way, it is important to consider the fact that some of the issues that determine the processes of entrepreneurship and controlled by aspects of environment and other forces that operate within the field of business. Bigger businesses are likely to report lower levels of failure as compared to smaller businesses. In essence, bigger businesses will tend to have more robust and strategic methods of engaging in entrepreneurship processes as compared to the smaller businesses. One of the reasons behind this reality is that bigger businesses have access to more pools of capital that could be used in the processes of research and risk analyses in order to determine some of the risks involved in the performance of business processes. It would be appropriate to consider the relative advantages of the size of a business within the overall framework of success and failure as understood within the process of entrepreneurship. In essence, some of the issues related to the performance of businesses are necessarily controlled by the ability of businesses to engage into appropriate business processes and strategies. This is usually considered for determining the amount of value to be derived out of the various systems and advantages within the understanding of the general process of entrepreneurship. On this score, it becomes necessary to assess the synergies and advantages of entrepreneurship from the perspective of the kind of challenge relating to the duration of the venture. Some theorists argue that the kind of business processes and entrepreneurship are necessarily controlled by the degree of change as it occurs within the space of unexplored fields of commerce (Cave, Eccles & Rundle, 2002). In essence, it is necessary to consider the fact some of the issues that attend to the performance of entrepreneurial venture are determined, to a significant degree, by the duration of business. Business ventures with longer lives have higher chances of success as compared with businesses with comparably shorter durations of operation. In this regard, some of the issues that attend to the issues that determine the conditions of success have to be considered in terms of the awareness of the resident risks in the entrepreneurship venture. As such, some of the matters that occasion the element of failure are usually determined by the combined effects of the global financial forces, which essentially determine some of the business processes in the field of commerce. The assessment of the element of failure and its contribution towards the success and failure is generally regarded by the designs and structures of entrepreneurship plans against the process of recognizing entrepreneurship. The process of recognizing entrepreneurship opportunities involves multiple approaches. Some entrepreneurs contend that their inaugural ideas of entrepreneurships were curved out of preexisting ideas. In essence they formulated their ideas through a critical analysis of some of the existing ideas in their environment. The ability to detect the internal weaknesses and challenged in these processes enable the entrepreneurs to create alternative processes in order to develop better processes and better products. From this perspective, it might be argued that the process of recognizing opportunities involves creating synergies from some of the failures or weaknesses in previously existing ventures (Bygrave & Zacharakis, 2010, p. 55). Therefore, entrepreneurship becomes a process of supplying corrections to the mistakes and defects in the previous processes and methods that controlled the process of entrepreneurship. In this regard, it becomes important to consider the fact that the aspect of failure becomes the point of development of discovery of the underlying strengths and weaknesses within the understanding of the range of factors that determine the validity of the venture. Other entrepreneurship processes are usually created through the desire to provide solutions to some of challenges that afflict the society. The difference between an entrepreneur and other kinds of business people is that an entrepreneur will seek the guidance of the social problems for creating the most suitable solutions. The process of creating solutions is determined by the capacity of the entrepreneur to access insights into the dimensions of the problem and the ability of the society to accept and buy into the entrepreneurship venture. As such, the entrepreneur attempts to create some significant challenges within the process of entrepreneurship in terms of the relevant processes that attend to the social problems in the affected field. The levels of success, the nature of challenges to be encountered, and the risk of failure is largely determined by the manner in which the entrepreneur attends to the basic challenges of the society. The search for solutions involves some risk of failure or success depending on the manner in which the entrepreneur engages with the process of seeking for solutions. Entrepreneurs in the modern world have effectively engaged the synergies of the information communication and technology with the aim of providing a wide range of solutions to societal challenges. The entrepreneurship process has provided solutions to money transfer in underdeveloped parts of the world. Money transfer systems using mobile technologies have been used in parts of Sub Saharan Africa and other parts of the developing world where banking services are inaccessible. At this level, some of the issues that determine the levels of success could be considered in terms of the various advantages that attach to the entrepreneurial processes. According to some studies, the development of entrepreneurial opportunities is largely determined by the element of adversity. Adversity and scarcity often challenge entrepreneurs to seek solutions to some of the issues that challenge societies. In the development of these solutions, entrepreneurs are forced to ignore conventional rules and methods. This is usually considered for determining the actual challenge to problems as they relate to the overall process. Working outsides the established systems usually entail very high risks of failure. On the other hand, the ability of the entrepreneur to challenge the systems of culture makes it possible for the people to work effectively towards the development of a robust system that could create high levels of success for the challenges and issues that afflict the society. The threat of failure is also associated with the inability of the society and the target market to embrace the innovations. Sometimes, the innovations may fail to connect with the preferences of the targeted market. For instance, there are issues that are considered within cultural values and associations. Entrepreneurship develops within certain social and cultural contexts (Ucbasaran, Westhead, Wright & Flores, 2010). Essentially, the world of entrepreneurship is determined by the ability of the entrepreneur to regulate processes within certain cultural processes. Entrepreneurial projects that fail to consider the cultural aspects of the society are likely to fail as compared to those that factor in the same aspects. For instance, entrepreneurial projects relating to the production of alcoholic beverages may meet significant levels of failure if they are produced within societies that are radically Islamic such as the gulf region. However, failure is usually considered as an opportunity to reorganize and develop more suitable methods that could shield the process against the perils associated with the initial failure. On this account, it would be important to consider the fact that some of the issues related to the development of appropriate systems are generally designed to work within certain set practices as considered with strategies and methods of entrepreneurship. The chances for success or failure are to be considered within the aspect of SWOT analysis particularly from the perspectives of strength, opportunities, and threats of the entrepreneurship process. A clear understanding of the nature of threats would help minimize the chances of failure. This is because the entrepreneur will endeavor to design the entrepreneurship process in ways that would minimize the possibility of failure. Understanding the nature of threats and the possible opportunities in the targeted field determines the competitive advantage, that one entrepreneur enjoys over another. Matters of insight, creativity, and skills determine the difference as they relate to the individual entrepreneurs. Some of the factors that attend to the challenges in the society are necessarily determined by the level of failure and success as considered within the general framework of investment. Other entrepreneurs recognize opportunities through sheer instinct. The ability to read into a situation instinctively and develop a product suited towards the details of the instinct has often led to the significant levels of success in the entrepreneurship recognition process. The level of attachment between the entrepreneur and the possibilities of success that attend to the process are usually determined within the perspective of creativity. Creativity is an important element of entrepreneurship (Cariv, 2011). It involves the engagement of special perspectives into the process of entrepreneurship in order to observe the world in ways that are peculiarly unconventional. One example of the entrepreneurship might be considered in terms of converting some geographical space into a tourism attraction center. Some places that were presumed to be desolate and agriculturally unproductive have been converted into touristic attraction areas because of their unique cultural or historical association. The conversion lands and places into lucrative businesses is a governed by entrepreneurial instincts and a significant element of creativity. Entrepreneurship involves the observance of the society in ways that are above the accepted standards and conventions (Cardon, Stevens, and Potter, 2011, p. 79). Some of the conventional business practices have their own internal weaknesses and strengths, which regulate the manner and yardsticks for measuring the levels of success and failure. Creativity is determined by the ability of the entrepreneur to challenge some of the issues that relate to the issues that combine within the element of creativity. Generating business ideas from social situations, geographical features, cultural factors, and a wide range of other issues is generally regarded as one of the important factors in the process of entrepreneurship as understood within the aspect of business ventures. Works Cited Bygrave, W, D & Zacharakis, A 2010, Entrepreneurship, John Wiley and Sons, New York. Cardon, M, S, Stevens, C, E, and Potter, R 2011, Misfortunes or mistakes? Cultural sense making of entrepreneurial failure, Journal of Business Venturing, 26 (1), 79-92. Carter, S, & Jones-Evans, D 2012, Enterprise, and small business: principles, practice, and policy, Pearson, New York. Cave, F, Eccles, S, & Rundle, M 2002, An Exploration of Attitudes to Entrepreneurial Failure, Lancaster University Management School, Retrieved http://fusionmx.babson.edu/entrep/fer/babson2001/XXV/XXVB/XXVB.htm Cope, J 2011, Entrepreneurial learning from failure: an interpretative phenomenological analysis, Journal of Business Venturing, 26 (6). Pp.604- 623. Kariv, D 2011, Entrepreneurship: An International Introduction, Taylor & Francis, New York. Shepherd, D, A, 2003, Learning from Business Failure: Propositions of Grief Recovery for the Self-Employed, The Academy of Management Review, 28(2), pp.318–328. Ucbasaran, D, Westhead, P, Wright, M & Flores, M 2010. The nature of entrepreneurial experience, business failure and comparative optimism, Journal of Business Ventruing, 25, pp.541-555. Read More