Don't fail fast -- fail mindfully

We celebrate bold entrepreneurs whose ingenuity led them to success, but what happens to those who fail? Far too often, they bury their stories out of shame or humiliation -- and miss out on a valuable opportunity for growth, says author and entrepreneur Leticia Gasca. In this thoughtful talk, Gasca calls for business owners to open up about their failures and makes the case for replacing the idea of "failing fast" with a new mantra: fail mindfully.

[This talk contains mature language
Viewer discretion is advised]

If we traveled back to the year 800 BC,

in Greece, we would see
that merchants whose businesses failed

were forced to sit in the marketplace
with a basket over their heads.

In premodern Italy,

failed business owners,
who had outstanding debts,

were taken totally naked
to the public square

where they had to bang their butts
against a special stone

while a crowd jeered at them.

In the 17th century in France,

failed business owners
were taken to the center of the market,

where the beginning of their bankruptcy
was publicly announced.

And in order to avoid
immediate imprisonment,

they had to wear a green bonnet

so that everyone knew they were a failure.

Of course, these are extreme examples.

But it is important to remember

that when we excessively
punish those who fail,

we stifle innovation
and business creation,

the engines of economic growth
in any country.

Time has passed, and today we don't
publicly humiliate failed entrepreneurs.

And they don't broadcast
their failures on social media.

In fact, I think that all of us
can relate with the pain of failure.

But we don't share the details
of those experiences.

And I totally get it, my friends,
I have also been there.

I had a business that failed

and sharing that story
was incredibly hard.

In fact, it required seven years,
a good dose of vulnerability

and the company of my friends.

This is my failure story.

When I was in college, studying business,
I met a group of indigenous women.

They lived in a poor rural community
in the state of Puebla, in central Mexico.

They made beautiful handmade products.

And when I met them and I saw their work,

I decided I wanted to help.

With some friends,
I cofounded a social enterprise

with the mission to help the women
create an income stream

and improve their quality of life.

We did everything by the book,

as we had learned in business school.

We got investors,

we spent a lot of time building
the business and training the women.

But soon we realized we were novices.

The handmade products were not selling,

and the financial plan we had made
was totally unrealistic.

In fact, we worked
for years without a salary,

hoping that a miracle would happen,

that magically a great buyer would arrive

and she would make
the business profitable.

But that miracle never happened.

In the end, we had to close the business,

and that broke my heart.

I started everything
to create a positive impact

on the life of the artisans.

And I felt that I have done the opposite.

I felt so guilty

that I decided to hide this failure

from my conversations
and my resume for years.

I didn't know other failed entrepreneurs,

and I thought I was
the only loser in the world.

One night, seven years later,
I was out with some friends

and we were talking
about the life of the entrepreneur.

And of course,
the issue of failure came out.

I decided to confess to my friends
the story of my failed business.

And they shared similar stories.

In that moment, a thought
became really clear in my mind:

all of my friends were failures.

(Laughter)

Being more serious, that night I realized

that A: I wasn't
the only loser in the world,

and B: we all have hidden failures.

Please tell me if that is not true.

That night was like an exorcism for me.

I realized that sharing your failures
makes you stronger, not weaker.

And being open to my vulnerability

helped me connect with others
in a deeper and more meaningful way

and embrace life lessons
I wouldn't have learned previously.

As a consequence of this experience

of sharing stories
of businesses that didn't work,

we decided to create a platform of events

to help others
share their failure stories.

And we called it Fuckup Nights.

Years later, we also created
a research center

devoted to the story of failure

and its implications
on business, people and society

and as we love cool names,
we called it the Failure Institute.

It has been surprising to see

that when an entrepreneur
stands on a stage

and shares a story of failure,

she can actually enjoy that experience.

It doesn't have to be a moment
of shame and embarrassment,

as it used to be in the past.

It is an opportunity
to share lessons learned

and build empathy.

We have also discovered

that when the members of a team
share their failures, magic happens.

Bonds grow stronger
and collaboration becomes easier.

Through our events and research projects,

we have found some interesting facts.

For instance, that men and women
react in a different way

after the failure of a business.

The most common reaction among men

is to start a new business
within one year of failure,

but in a different sector,

while women decide to look for a job

and postpone the creation
of a new business.

Our hypothesis is that this happens

because women tend to suffer more
from the impostor syndrome.

We feel that we need something else
to be a good entrepreneur.

But I have seen that in many, many cases
women have everything that's needed.

We just need to take the step.

And in the case of men,

it is more common to see that they feel
they have enough knowledge

and just need to put it in practice
in another place with better luck.

Another interesting finding has been

that there are regional differences
on how entrepreneurs cope with failure.

For instance, the most common reaction

after the failure of a business
in the American continent

is to go back to school.

While in Europe, the most common reaction
is to look for a therapist.

(Laughter)

We're not sure which is a better reaction
after the failure of a business,

but this is something
we will study in the future.

Another interesting finding has been

the profound impact that public policy
has on failed entrepreneurs.

For instance, in my country, in Mexico,

the regulatory environment is so hard,

that closing a business can take you
a lot of time and a lot of money.

Let's begin with the money.

In the best possible scenario,

meaning you don't have
problems with partners,

providers, clients, employees,

in the best possible scenario,

officially closing a business
will cost you 2,000 dollars.

Which is a lot of money in Mexico.

Someone who earns the minimum wage

would have to work for 15 months
to save this amount.

Now, let's talk about the time.

As you may know,
in most of the developing world,

the average life expectancy
of a business is two years.

In Mexico, the process of officially
closing a business takes two years.

What happens when the average
life expectancy of a business

is so similar to the time it will take you
to close it if it doesn't work?

Of course, this discourages
business creation

and promotes informal economy.

In fact, econometric research has proved

that if the process of declaring
bankruptcy takes less time and less money,

more new firms will enter the market.

For this reason, in 2017,

we proposed a series
of public policy recommendations

for the procedure of officially
closing businesses in Mexico.

For a whole year,

we worked with entrepreneurs
from all over the country

and with Congress.

And the good news is that we managed
to help change the law.

Yay!

(Applause)

The idea is that when
the new regulation comes into force,

entrepreneurs will be able to close
their businesses in an online procedure

that is faster and inexpensive.

(Sighs)

On the night we invented Fuckup Nights,

we never imagined that the movement
would grow this big.

We are in 80 countries now.

In that moment, our only intention

was to put the topic
of failure on the table.

To help our friends see that failure
is something we must talk about.

It is not a cause of humiliation,
as it used to be in the past,

or a cause of celebration,
as some people say.

In fact, I want to confess something.

Every time I listen
to Silicon Valley types or students

bragging about failing fast and often
like it's no big deal, I cringe.

Because I think that there is a dark side
on the mantra "fail fast."

Of course, failing fast
is a great way to accelerate learning

and avoid wasting time.

But I fear that when
we present rapid failure

to entrepreneurs
as their one and only option,

we might be promoting laziness.

We might be promoting
that entrepreneurs give up too easily.

I also fear that the culture
of rapid failure

could be minimizing
the devastating consequences

of the failure of a business.

For instance, when
my social enterprise died,

the worst part was that I had to go back
to the indigenous community

and tell the women
that the business had failed

and it was my fault.

For some people this could be seen
like a great learning opportunity for me,

but the truth is that
the closure of this business

represented much more than that.

It meant that the women
would stop receiving an income

that they really needed.

For this reason,
I want to propose something.

I want to propose
that just as we put aside the idea

of publicly humiliating
failed entrepreneurs,

we must put aside the idea
that failing fast is always the best.

And I want to propose a new mantra:

fail mindfully.

We must remember that businesses
are made of people,

businesses are not entities
that appear and disappear

magically without consequences.

When a firm dies,
some people will lose their jobs.

And others will lose their money.

And in the case
of social and green enterprises,

the death of this business
can have a negative impact

on the ecosystems or communities
they were trying to serve.

But what does it mean to fail mindfully?

It means being aware of the impact,
of the consequences

of the failure of that business.

Being aware of the lessons learned.

And being aware of the responsibility

to share those learnings with the world.

Thank you.

(Applause)