Examining failure – who is being examined?
Being a technology entrepreneur involves a direct and primary relationship between the individual and the venture – typically as founder, executive and board member, and possibly as an investor in, or employee of the firm. I believe its more useful to focus on the attitudes of entrepreneurs, not investors.
Studying entrepreneurs (and investors) requires an awareness of human nature. Cannon and Edmonson write: “We have an instinctive tendency to deny, distort, ignore, or disassociate ourselves from our own failures” (Cannon and Edmonson 2004: 7), which places the researcher on alert – in investigating attitudes to such phenomena, personal barriers and sensitivities may inhibit the gathering of truthful and candid observations. McKenzie and Sud assert the inadequacy of quantitative research methods: “the primary methodologies of US entrepreneurship research are mail questionnaires and directed interviews.” (McKenzie and Sud 2008: 124). They propose an alternative approach, examining the personal stories told by entrepreneurs about their varied failures.
In such cases, is it the venture or the entrepreneur that has failed? Timmons is clear: “Business fail but entrepreneurs do not.” (Timmons 1989). Yet some individuals clearly do fail: they take on more responsibilities than they can handle and make poor decisions. There are good and bad businesspeople, as much as there are good and bad ventures. Perhaps there is an evolutionary aspect here: failure can be seen as a process by which weak entrepreneurs are eliminated from future activities. There are two ways such “bad entrepreneurs” can be eliminated: through self-selection, in the case of “one-time” entrepreneurs (Gulst and Maritz 2009) who choose not to start subsequent ventures, and through market factors (inability to raise funds, recruit staff or customers).