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If you want to be the next Menulog, you’ve got to be prepared to fail

It’s been a mixed week for Australia’s startup scene. On the upside, we’ve seenAustralian online ordering platform, Menulog, acquired by UK corporate, Just Eat, for an incredible $855 million. By unfortunate contrast, the founders of one of Australia’s most promising startups, Ninjablocks, had to shutter their business after struggling to deliver their third Kickstarter-funded project on time and on budget.

In any given week, hundreds of startups and small businesses fail in Australia and hundreds more are formed.

What separates the startups that see their investors and founders walk away with multi-million dollar payouts, from those that fail?

When it comes to Australia’s top startup talent, in my experience it’s often a matter of timing.

The right idea at the right time, sure. But also the ability for a talented startup founder to be willing to get up and try it all again. Maybe with another idea. Maybe in the form of adapting their idea, and pivoting to a new market or industry.

Take Three65 Underwear, who pitched on last week’s episode of TEN’s Shark Tank as an example. It has a fun and interesting subscription model that solved a real problem for millions of men. Anybody who’s ever reached the end of their laundry hamper, or had to wear odd socks, can appreciate the benefit of a monthly package of briefs and socks.

Nothing wrong with that idea. A lot wrong with the timing. I was out as soon as I heard that founder, Will Strange, had split focus, dividing his time between underwear and another concern that provided GPS tracking for sports teams. As I’ve said before – if you’re not 100% committed to working on your startup, I’m 100% not putting my money behind it.

One thing you learn very quickly (or if not quickly, very expensively) about early stage investing is that not every deal will bring a return. It’s one of the reasons why most VCs invest in people, not in ideas. You look at the background, capabilities and experience. For me, if they have the technical experience, and I trust they can deliver and do what they say – a founder is in with a good chance of investment.

If Australia is going to create more billion dollar tech businesses, and if investors are going to reap the windfall similar to Menulog, we are going to also have to see more failures like Ninjablocks. The reality is not every startup makes it, not even close. That’s why Ninjablocks’ blog post explaining what happened should be essential reading for entrepreneurs.

In Silicon Valley, entrepreneurs wear failure as a badge of pride. We’re not quite as accepting here in Australia. For me, failure has never been something to be celebrated. Instead, you learn from your mistakes, shake yourself off and give it another go. One thing I know is we need people like the founders of Ninjablocks ready to take the leap into startup and aim big.

This article first appeared on Business Review Weekly. View the original here.

2 comments

  1. Paul Cannell says:

    Hello Steve,

    I enjoy listening and reading what you have to say. Your experiences and lessons learned accordingly is inspiration to anyone wanting to make a go of it. Keep up the good work!

    Regards,
    Paul Cannell

  2. PhilM says:

    Steve,

    I have the good fortune to mentor several small business operators despite being something of a hasbeen myself. Your words are well founded and I often send quotes, snippets etc on to these hardworking entrepreneurs.

    Only when you choose to put it all on red or black do you truly appreciate what an entrepreneur does.

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