A recent study dispels the notion that most failures of business launches come from novice entrepreneurs who end up exiting from their business. The study develops the theory of the serial entrepreneur who instead of exiting from entrepreneurship shuts down unsuccessful businesses and moves on to new ventures. A highly skilled entrepreneur can transfer the startup cost for a venture closed down to a new venture of higher quality. Alternatively, a less skilled entrepreneur might close down a venture to return to the labor market (Plehn-Dujowich, 2010).
This theory suggests skilled entrepreneurs may have many failures before finding a success. Successful entrepreneurs continue their pursuit for success by failing many times. Each time a small business entrepreneur fails the experience improves his or her skills. An entrepreneur does not look at failed business attempts negatively, but as a stepping stone to achieve success. Entrepreneurs develop skills and valuable experience as suggested by the theory of the serial entrepreneur
High failure rates are misleading because small failures are natural and can lead to a huge success. Are you afraid of failure or do you learn from your mistakes? Do you want to find out more? Click here.
Plehn-Dujowich, J. (2010). A theory of serial entrepreneurship. Small Business Economics, 35(4), 377-398. doi: 10.1oo7/s11187-008-9171-5.