Failure. It’s a word that often comes up when people inevitably start comparing Europe (or their local startup ecosystems) to Silicon Valley (or ‘the US’ or Israel or China or …) yet again.

Europeans (if there is such a thing) have a hard time seeing failure as anything but the opposite of succeeding, it is said. There’s no culture of failing and starting right back again. Failure is regarded as the end of a line, rather than a point on the learning curve of life / career. People who aren’t entrepreneurial – aka the vast majority of people living in Europe – generally look at failed entrepreneurs with a mixture of schadenfreude and misplaced sympathy. Governments make it difficult for founders to try their hands at building businesses multiple times over without literally bankrupting themselves every time. Failure rarely gets discussed openly.

Etcera, etcetera.

All of these things are true, to a degree, and that they are part of the problem of Europe truly living up to its technological / digital potential is a fact, not a mere opinion.

It’s also a massively hard thing to ‘fix’. How do you alter a culture? How do you change thinking that’s been solidified over decades – if not centuries – and remains deeply rooted in people’s minds?

One thing is for sure: creating and promoting ‘great role models’ (which often pops up as ‘a solution’ in conversations about failure in Europe) isn’t going to cut it. We already have plenty of role models, and Europeans are genuinely terrible at celebrating the relatively few successes we have as it is.

So what’s the answer to this ‘fear of failure’? There isn’t (a single) one, but at the very least we should make an effort to better understand the question. Which brings me to the point of this post.

Fail better is part of a consortium of 15 organisations from across Europe that has responded to a call from the European Commission to address the problem described above (see

life project

Dubbed the ‘LIFE’ project (Learning Incrementally from Failed Entrepreneurship), the initiative has as its aim to make failure better understood, and less of a taboo. To better grasp what has caused European entrepreneurs to fail at their businesses, and why they haven’t (easily) bounced back, but also to map out the stakeholders, programs, facilities and networks that are already in place to remedy that, and to share best practices and success stories to help founders learn and move forward.

The project is hinged on a yearly conference cleverly called Failing Forward (save the date: 14 October in Brussels), but there will also be local spin-off events in a number of markets across Europe.

In the meantime, we’re collecting data and evidence ‘from the field’. The partners of the project are already interviewing a ton of entrepreneurs in different sectors and countries, and founders of companies at different stages, to gather intelligence on failure / success in Europe.

If you have a great story or learnings from your own ventures (successful or otherwise) to share, don’t hesitate to get in touch asap. We can interview you and use the data from your experiences for our research, and perhaps get you op on stage in Brussels this fall to share them with a larger audience.

Because however the overarching problem with failure will be solved, sharing best practices and knowledge is definitely going to be a major part of the solution.

On that note, you should also read: Kolossal failure: 10 lessons I learned from burning through $50,000 on a hardware project that bombed

And in conclusion, you can always reach out to us if you have ideas for partnerships.

Disclaimer: The European Commission has financially backed the LIFE project, and receives compensation for its role as one of the 15 partners of the consortium.

Featured image credit: Sergey Nivens / Shutterstock

  • Trond Johannessen

    Mythbuster 1: Europeans are not afraid of failing. They just get mistreated, and barred from getting up by the various systemic arrangements that are in place. You then get a little thoughtful about trying again, but now you have learned. Some of us get beaten up by family, government and creditors every day, and we still go on.
    Problem no. 1: Governments wants to help and have been doing dumb and smart things. A. Providing loans. It is like handing out a rope to hang yourself. Debt and startups do not belong together, unless these automatically convert to equity in a default condition. Convertible equity is probably what entrepreneurs would like,to have, if we are talking small amounts at seed stage – buying out the equity as if it were a loan. It is a pricing question, and the point is to make sure the intent to assist in funding is not compromised as founders are forced to deal with creditor issues before the project gets traction. Young and old entrepreneurs will sign any piece of paper to get going, but that is for lack of experience (in most cases).
    Problem no 2. Blackballing entrepreneurs on personal or business credit issues. In the Netherlands, for example, you are on blacklist for five years even if your sin is not paying a mobile phone bill. A large percentage will fail, but some are just being tackled, tarred and feathered in the process of creating their venture. This then prevents them from being shareholders in new ventures or their old ones, as the legal system allows creditors access to seize these shares and nobody wants to substitute a venture innovator with a creditor .
    Problem no 3. If you then, still in the Netherlands, accept the solution society offers to people in debt, Kwijtschelding, which is when the creditor voluntarily forgives the debt. The Government in particular is then requiring entrepreneurs to deregister their activities in the Chamber of Commerce register. You basically have to stop what you are doing (and go get a job). It is typical failure pattern of people on unemployment programs who wants to get into business and Government provides a loan to “help”. I am tempted to say 80% of those are pizza and kebab joints, while anybody with a Greater vision is largely fighting harder for approval and exposed to Greater risks. When entrepreneurs on government programs support get into trouble, there is random support and a lack of accountability. One of my clients got her project killed because a temporary hire in the tax office made a calculation error. And then that procedure of collecting a payment that in reality was not due, caused a snowball of cross defaults at a microscopic level. It took a couple of years to get things settled, but websites, credit built back over five years on black list, and a mere loss of capacity to do anyrthing other than fighting creditors were consequences on top of the loss of any government unemployment benefits. She tried to get off the payments, but the “we’re here to help” people in government gently threw her under the bus. Had it not been for friends with some spare liquidity, it could have gotten very ugly. I wonder how many stories like that are swept under the rug each year?
    4. The idea that you need to sit in an incubator for six to twelve months with other entrepreneurs and show you can survive on 50K EUR is bullshit. Back to the garage, and look at real project needs. I talk to Young entrepreneurs in Milan and they all ask for the same ridiculous amounts, meaning they have been conditioned by some mass lie. Still, culturally, you get a lot of Angels sitting around catering to this silliness. Angels are sometimes that, sometimes just cats and dogs. Business schools, governments, and angel clubs and individuals are no help if they support a process which inherently will keep ventures to a determined level at Birth. Where is Uber of Europe, or Intel, or infrastructure innovation going to find its place? They will fail, or not start at all. Many of the incubators in Italy that popped up were born out of Government incentives. I jokingly (bot not completely) say that there are more incubators than entrepreneurs. I took a client to one of the bank sponsored beauty contests, where angel funding and incubation was the prize. We told the audience of angels in our pitch we were looking for 1 mill+6 mill this year. Silence. OK, it is Worth adding that we knew the VC cases are better pitched to VCs, but there are people who get hustled into the Angel world, never to be seen again, as their brilliant idea is starved on capital, and then it is the innovator failing,
    5. It is hard for innovators to work on sweat equity, fail, and restart on sweat equity. It means you have a day job or partner with a job. I think we need to look at the tax structures for partner income in order to allow peace at home and acceptance for entrepreneurship as a job.
    6. If I had a part time job with income, I could keep alive and do 4 + 8 hrs a day or maybe even 8 + 8. If the government would hire, pool, organize jobs, and adapt purchasing regulation to allow purchases from Young companies, society would keep entrepreneurs fed, for as long as it is needed to develop ideas and realize ventures, without hard line drop dead events and subsequent market exclusion for the ones we seek to stimulate to innovate and succeed and fail as needed. If this source of support money is originating as an Exchange of work for money, society is getting fair value all the time, and so there is no subsidizing of the creative class, and no risk of having fake unemployed or the like. Micro enterprises can be realized if there is some sort of financial mechanism that allows men and women to take a risk, without risking to become failure victims run over by collection agencies and stigmatized by important Actors that condition how we see and treat entrepreneurs after failure. If you consider how many talented people there are wishing to start a new venture, having these bid for work as part-time income from a managed pool of jobs, could change the way we deal with failure and the costs to society and individuals of people stumbling and getting up again.
    7. Cities run cumbersome qualification procedures for startups according to a calendar that conditions when you can get into programs, and get 30K or so (EUR). Then they sell us on how fantastic the City is and having a dozen startups to show off for awhile. This process creates its own failures, as the startups have a symbolic sum, money just spalmed over too many applicants. Why are cities, provinces, regions, nations and federations providing its money into pools of private and public funds that give a multiplier on funds and so allowing larger amounts of capital per project? I am still on the track where innovation fails because it spends too long underfunded and understaffed.
    8. Tax authorities need to be more flexible when it comes to restatements of accounts, and seek to assist entrepreneurs in compliance. Just saying “I cannot approve your accounts for 2013” means you’re forcing entrepreneurs into a dance with the tax authorities and its capital providers.
    9. People move. My Dutch bank sent a claim to their collection arm and that used databases that were not the same as the bank’s records that I maintained as part of the online banking account. The bank cancelled my account once for not having responded to collection agency correspondence sent to a previous address. If we as individuals make such errors, we are accountable. If the bank makes the mistake, we’re still accountable. Once an account is cancelled, it is hard to speak up. Once your account is gone, credit cards, debit cards, your Whole credit and payment system identity and capacity is gone. Our system produces failures that are given a certain permanence. We can work on these imperfections and give people a second chance.

  • Trond Johannessen

    I really like the Italian initiative to regulate equity payments in qualifying startups, whether Italian or Foreign, as tax exempt. In line with a medium sized business case pre-money valuation, the Founder team is each earning 500 – 1.000K EUR for work in 2014, provided the funding closes as proposed. Give or take a little or a lot, the tax code does not explicitly say that this amount of income earns pension points and qualifies for establishing pension rights in that amount. It is tax free, maybe considered Funny Money? But this is the big issue – I have been on desert walks for 3-4 years on some projects, not claiming unemployment or anything, as I then would have to stop doing what I worked to realize, failing or not. So 2-3 failures later, the entrepreneur climbs out of the crater and goes from rags to “riches”, making his business cycle (my measure is 7 years) average look like an employed person, while the upside now is potentially going to provide a further pay-off. So now I am billing my time through my holding company, and convert to shares if there is no cash to pay. So I keep declaring some income, but it is all equity. In the Dutch system, I am then forced to pay certain compulsory charges for health system and the like in cash. Do I earn pension rights based on equity pay anywhere? I am taking risk, I may take from savings, have a merciful family or generous friends, providing a bowl of cereal, a coffee, some pasta and water, electricity and a bed, internet access. So the entrepreneur does not always get the cash to pay his 700 EUR contribution every time it is due – maybe he catches up, maybe building debt. The Royal collection service gets involved, fines get added, late charges and the like. OK, you say, you should not stay under water that long, those world records are not counting, they just suck. Still, when you then close on your next transaction and get the once-every-ten-years-home-run-equity pay, and eventually also cash compensation, you’re surrounded by people suddenly thinking you’re great – from the tax man, through creditors, to all those who were not there when you just squeaked by, or folded a couple of ventures in a row while bankers got paid salaries even when the bank they ran into the ground and was bailed out by each Dutch resident at a rate of 1.000 per head, continued to pretend all was fine, drawing cash salaries, earning pension rights, keeping their credit, their social life, and produced just 16bn+ more national debt plus the losses each year that kind of got hidden under the rug.
    You want to give me 25K loan, 80% government guaranteed, so I can become an entrepreneur in that system – me, Joe Blow, Entrepreneur, looney, off the wall smart and a little crazy, too small not to fail? A 25K loan that the bank will claim if you on your side don’t have money this month to pay interest – 500 or 1000 EUR that you lent to the government to give to the bank in the first place, and then they first see if I can pay if I fail to correct the situation. If not, the bank quietly goes to collect 80% from Big Brother, and does not tell me, while he closes my current account, preventing me even receiving money without going to Western Union or becoming a virtual currency customer as I am thrown under the bus by the system who was “there to help”? God Bless the EU for trying to declare having a bank account is a human right, but that seems to still be in a parallel universe, or in the next life for entrepreneurs.
    It is possible to turn all around, but there are too many well-meaning cheerleaders on fixed salaries that never imagine a life without a paycheck, just sitting around waiting for the European Bill Gates, Larry Page, Jeff Bezos to show. After all, that is why they handed out all these small checks. It is like buying lottery tickets, right? We do this not for the many, but for the Prize, the Unicorn, the Miracle. Screw the rest. History Remembers the Winners. In fact, it is also like that in the Present. Which is why the many assymetries go unfixed, and the system sucks in recycling innovators that is getting up, a little shaken, but hellbent on pursuing the same dream or a new one, or both.
    If Brussels want success in changing the culture, and making Europe competitive with the US and Asia (probably a larger threat over time), this is an excellent moment. It cannot be done with those who are well-meaning, never been on the wild side of entrepreneurship. It has to be built by people who took the risks, failed and still go on, driven – and willing to spend a little time on eco-system transformation. Money is cheaper than in the US now in the Eurozone. We should build large funds across stages and verticals, and innovate in entrepreneurship itself and venture funding, not only copy – especially not hiring American Stanford graduates to tell us how to make a copy of SV. But that is what Brussels does, among other weird, and useless things, while entrepreneurs remain at it, succeeding and failing. Show, tokenism, reverse engineering. All we got out of that were chicken farms where small check entrepreneurs are encouraged to lay eggs while looking at each other hatching, exchanging thumbs-ups and likes on social networks.
    The financial instruments and the fiscal, legal, pension and health system reforms are at best getting tweaked. Even blind hens find the occasional grain. We need more scale, vision and larger integration with business, and alignment of fiscal, health, and pension systems. We are wasting time if these are not the priorities, because this is how we do the job once, across a continent of half a billion people, getting an army of entrepreneurs confident that entrepreneurship is a career path, a job, from the vantage point of society and taking into account our entire life cycles.
    Transparent rules on fiscal treatment, cradle to grave record-keeping and aligned across the Eurozone is what is required, but we’re just starting, maybe?

  • Trond Johannessen

    When governments guarantee loans managed by a bank and offered to an entrepreneur, it is important for the process to be set up to work in contrast to current practices in the Netherlands (and probably elsewhere). With a small set of changes, the same end result for Government and Bank, but hugely improved outcome for failing entrepreneur. Let us say the loan covenants are violated. Normally, the bank is then obligated to attempt a standard collection procedure. Fair enough. In the instances where there is will, but not capacity, to pay, you end up with the bank giving up on its efforts and closing the access to the account, possibly passing it to a collection agency that may or may not be owned by the bank, and let’s say that after some suitable time, also gives up. At some point in the process, the bank closes the account and the entrepreneur ends up with a rrecord in national credit registers. This makes it awkward to get started on a new venture, or even continue working on the venture that owned the bank account. The bank documents the loan as violated, and that due efforts have been made to collect. The Government pays out 80% to the bank, and the bank writes off its 20% portion at risk. Let us say the Entrepreneur goes to the bank next door, requesting to open an account for Handling cash receipts – not asking for credit. He gets refused! The EU has already taken steps to give everybody the right, and banks the obligation to open an account, but until recently, Dutch banks refused (e.g. Rabobank). Let us say that, after attempts at collecting from the debitor have proven futile, the bank requests the release of the Government guarantee. Instead of passing that to an account owned by the bank lender, the amount is deposited on the (then blocked, but operating) account of the Entrepreneur, and forcing the Bank to also credit the Entrepreneur with the 20% at risk to the account. Ignoring transaction costs, the account can now be unblocked and left at the disposal of the Entrepreneur. This forces dialogue between bank and entrepreneur and forces transparency about the bank’s operations relative to the Government guarantee. Today, the system throws the Entrepreneur under the bus, while the Bank pockets the Guarantee, and gets on the bus as the Entrepreneur is run over. Let us say there remained charges to be paid of a few thousand, after the loan was netted out of the account. An entrepreneur facing the entire debt and unable to pay, will not likely ever step into the bank again, even if he started earning cash from working. If, instead, he knew from monthly statements or instant electronic banking transactions that the guarantee had been called and bank by contract also credited its portion, the incentives for the Entrepreneur to continue his banking relationship on the basis of an account slightly in the red, are quite obvious. If the bank is clever, it finds an equity conversion mechanism for his 20% credit, and so remaining maybe a preferred equity partner, or subordinated debt holder. It is true that there are people without will to pay on credit, and that the system must have some management elements to discourage or discover such “serial failures.” Still, the change proposed would completely transform the client-bank relationship into a sustainable and long term affair, giving the bank and the entrepreneur a second chance (or more) for winning together. Banks may consider new forms of managing such credits as a relationship through intermediaries assisting entrepreneurs and their early stage firms. What is costly for a bank, may be part of the relationship for a venture developer (like me), mentor, accountant.

  • chris conder

    You only have to look around the EU and see so many entrepreneurs struggling with limited internet access and wonder how any of them manage NOT to fail. The best thing government could do is provide a fit for purpose connection for every citizen and stop listening to the marketing hype of the old fashioned copper telephone companies who are holding us to ransom.