A Harvard Business School study of venture capital-backed entrepreneurs tested whether or not we learn from our mistakes. The results are confounding to many–including me.
Here’s the story. Several thousand VC-backed companies were studied over 17 years. First-timers had an aggregate success rate of 22% (success meaning going public).
The study is about those trying for a second time. Did the 78% who failed the first time learn from the experience, and do better the second time? Or worse? How did the 22% first-time winners fare–did they get lazy and decline? Or did they somehow do better the second time?
Those who succeeded the first time upped their success rate, to 34%. But those who failed the first time stayed mired in the muck, at 23%. So much for the myth of the gritty, plucky lads who pick themselves up and learn from their failures.
As is often the case, data are one thing, and explanation another. Of course, the obvious explanation may be true: people just do not learn from adversity. This seems to be the study’s authors’ view–that the learn-from-failure ethos celebrated in Silicon Valley is really just anecdotal tales over-told.
Then again, maybe we actually do learn more from success than from failure. If so, perhaps that’s because of increased confidence resulting from one win.
Photo by lusi.