I am fascinated by the resilience that entrepreneurs show day in and day out. An entrepreneur’s life is full of ups and downs, and if you’ve already had a taste of entrepreneurship, you know it can often be all-consuming and yet incredibly fulfilling. For those of us with nerves of steel, diving into another business venture after a failure isn't just an option–it's almost a calling.
But starting again isn’t an easy feat. So I wanted to hear from entrepreneurs who have gone through this experience. The conversation that follows showcases how they learned from their failures, and used that experience to shape their ongoing entrepreneurial journey.
Whether you’re a seasoned entrepreneur or just starting your journey, the thoughtful insights from our conversation will offer a fresh perspective on failure and success.
Pay very close attention, be very objective about the things that caused your failure.Ingrid Polini
Before diving into the interview, here’s a brief introduction to the entrepreneurs who generously shared their journeys with me.
Dan Silivestru, co-founder and CEO of Chocolate Soup is a serial entrepreneur who achieved a successful exit with his first business–selling TinyHippos to RIM in 2011. He went on to launch another company that didn’t work out, but in the process, he landed on the idea for his current business.
Henry Quach, CEO of Axiam AI, is also a serial entrepreneur with multiple companies under his belt, and similar to Dan, has had successful exits alongside some unsuccessful endeavors.
Lastly, Milad Nourvant, co-founder of LingUp, applied lessons from past experiences to his new business, and shares how he faced and overcame challenges along the way.
Ingrid: You've each had businesses that didn’t work out. What was the most significant setback you faced in your previous venture? How did it impact your outlook on entrepreneurship?
Dan: I think we made some mistakes there. We were very early to market and we were focused on a bit more off-market. So mid-market to enterprise. Even though we had the opportunity to raise more money, we chose not to at the beginning, which was a mistake because it didn't give us the staying power that we needed until revenue could catch up to expenses. So I think the biggest challenge for us was trying to convince established organizations to get out of their comfort zone. I mean, we wrote software that analyzed other people's software. So that meant we needed access to their code base. And a lot of them just didn't like that. They were still running their own server farms and they weren't hosting their code in the cloud.
There were a lot of challenges. But I think the biggest one is we didn't do as much market research as maybe we should have. And we just thought, "This is a great tool that we would want for ourselves.” But we didn’t have enough proof points to prove that that was actually true.
Henry: First of all, I was an inexperienced startup entrepreneur. And so, initially, people would say: “Solve your customer's pain.” Part of the reason for our failure was because we picked education, where there is a lot of regulation. There was also a lot of push back from the teachers, from the participants and from the students. Even though they recognized there was a lack of efficiency in terms of learning and managed learning.
So what makes me keep going? I recognize why it was a failure. It failed because we got the idea of how to startup by solving a real problem. But also, you have to experience enough to know which industry is the one that's less risky or allows you to do more bootstrapping.
I strongly believe that every entrepreneur has a vision. But don't let failure slow you down or stop you from doing–or thinking about–the next solution. I only live once, I don't have a second chance to make something great.
Milad: The main setback was that we found out that the healthcare industry is pretty difficult to work in. We knew at first when we started, but we didn't realize how difficult it would be until we experienced it. And we thought, every business is difficult. And with difficulty, there's a lot of possibilities.
But when we got into it, we found out the challenges were bigger than ourselves. We found out that we would need to spend much more money on regulation and legal fees. We were trying to bootstrap the business. But with the amount of money we had to spend, we weren’t able to move forward. And that was it.
For my next startup, I tried to do a lot more research before jumping into the business. I talked with a lot of people in the industry. I talked with a lot of customers before having a product. Everyone knows you should do this. But when it comes to action, you usually say, “Okay, I know the market.” But after that earlier failure, I stopped myself and said, “You have to do this, even though you think you already know every advice that you are going to hear.”
So I pushed myself to talk with more people in the industry and get their advice and talk about the challenges they are facing, talk about the customer pain points, talk about whether the customers are willing to pay for this. Talk about the general industry shifts in the future.
It took us around two months, but I think it was worth it because at first, you know, some part of having a new idea is that you are so excited about that idea and you want to go into execution.
After the business failed, what were your initial thoughts and feelings? Did you consider giving up on entrepreneurship entirely, or was there something that motivated you to start again?
Dan: I don't know if my situation is unique or not. The thought did cross my mind to go get a job. It was very fleeting and it didn't last very long.
The overall feeling, I mean, you're shutting down a business. We were venture-backed and that never feels good, right? You gotta go and stand up in front of your investors and tell them that you've lost all their money. They were a fantastic bunch of investors, super understanding. We were super fortunate right from the beginning that we picked amazing investors that were really just there to help. It didn't change how bad I felt about losing their money.
There's a feeling of failure that at some point, you know you keep pushing, but then reality sets in. And it's like, no, this is not going to work. Whether it's a bad idea, the market timing, I mean, you can blame it on whatever. At the end of the day, the numbers speak for themselves.
But it was the direct failure of BitHound that led to the creation of my current company, Chocolate Soup. And it was one of those things where, what we did for our employees through BitHound, we saw the impact firsthand. It wasn't some anecdotal thinking, “Oh, maybe this would be a cool product. Maybe this would be a great service.” Like, no, we we did this for our employees and we saw how it impacted them and what kind of loyalty and friendship it built for us with them even in the worst of times when we were basically all working towards shutting down the company.
Henry: I'm a software developer and I know that if I'm no longer working with my startup I’ll still be able to get a good job. So the financial burden didn't affect me.
It's just that I felt a little bit down because we spent so much time on the company, including talking to the school board to identify the problem and come up with a solution. I felt like hours of our time were wasted.
And so I learned from it; the next time, if it takes that much time and our strategy isn’t working, then we have to do something differently. Don't keep trying for something if you don't think it will work. That's critical because otherwise you can keep going without knowing if you're going to succeed.
Because you spend so much time on something, you might say, ”That's such a waste.” But again, right now I look back, it's not a waste. This gives you experience not to fail in the same similar situation again. You could fail due to different things, but whatever you failed at, don't make the same mistake.
Milad: It's a really good question because I sometimes doubt myself. I think, maybe I'm not ready, even though, for example, I had a successful business in the past and I had a failed business in the past.
I thought that maybe I didn't know much about the market and it wasn’t the right time to start the business. After my last business, I went to work for a company, and I found out it wasn’t for me. So I worked at that company as a consultant and not full time, which allowed me to start my second venture.
I always doubt myself and most of the time, especially after a failure, it’s easy to think, “What did I not know?” So I usually try to talk to my mentors to see what problems I can fix. I'm like a work in progress. So I would like to know what I should learn, what I can do better and identify what I don’t know.
What are some of the key lessons you learned from your past business failures that you’ve applied to your current venture? How has your approach to building your new company changed as a result?
Dan: First, see if the service or product that you're building has legs. Go sell it, sell it before it's even a thing, if you can. Get pre-orders. If someone is excited enough about the idea to pay you before you have an end product, you're you're probably onto something. So in my last company, we spent eight months just building software before reporting it out, right? I decided to not build any tech for Chocolate Soup until we had a million dollars in revenue. I'm like, I can run this off Excel or Google Sheets with custom scripts.
Second, be passionate. In my last company, we thought it was a cool tech problem, you know, being geeks at heart and nerds as well. We were like, “Ah this is gonna be so great.” But I don't think that I was ever super passionate about it. I just thought it was a great idea and a great technical challenge. Whereas, Chocolate Soup, I'm super passionate about. I just think that people should wake up Monday morning and be like, oh, I can't wait to get to work. I find that passion helps draw you through the really hard times, because entrepreneurship is a rollercoaster and you'll get excessive highs and excessive lows. And sometimes they happen the same day, and sometimes they happen more than once a day.
My advice to entrepreneurs is to validate that you have a solid product or service that the market needs and wants. Do that before you've invested a million dollars in R&D just to build stuff, only to come out the other end to find out that the market just isn't there, or they're not willing to pay what you need them to pay.
Henry: First, think of your startup as a solution, and sell your solution. Second is money–how long are you able to keep the company going?
Say right now your startup is small, but again you still have money you are burning. So what I do is simple math. If my company burns $10,000 per month, for example, that’s about $300 per day. So every day I have to wake up and make $300. Every time you wake up, you have to think about how much you need to make in order to keep the company moving forward.
Milad: I come from a growth marketing background. I was responsible for growing my previous company organically from zero to millions of users. So for Care Canada (the business that failed), how we started that business was that we found organic search potential in the market. We found that millions of people in Canada were looking for doctors online and the key-word difficulty for those search terms is really low.
And we said, “Okay, let’s jump into this. We know how to do SEO. We know how to bring in organic traffic. Let's jump into this and bring that traffic. And then we can build some products to help these people.”
You can see that we didn't have the specific need or the specific product in mind.
And we had high traffic. I think after six months, we reached 200,000 visitors based in Ontario, which was really good. But we didn't have the product, we didn't look at the regulatory problems, we didn't look at the product market fit. For the next business, we went through a really detailed customer discovery phase and customer pain-point phase.
So for my next venture, we got into a problem that customers have, and built a solution. And the interesting thing is that right now after building that MVP, we are seeing a lot of marketing channels we can grow this with.
What advice would you give to other entrepreneurs who are currently rebuilding after a business failure? What are the first steps they should take to avoid repeating past mistakes and set themselves up for success in their next venture?
Dan: I think it takes a certain kind of personality to fail at a business and go, “I'm going to do this again.”
It takes quite a bit of risk to start a company. And once it fails, that risk becomes real. Ask yourself, “Can I even do this again?” If you're in the “Yes, I want to do something else now,” category, go back to the lessons you learned.
Every business is different, and your reasons for failing will probably be completely different from my reasons for having failed. But we all learn along the way. I think the more you do it, the more lessons you learn, and the more that gut feeling you have holds true. I might find I don't have any objective data as to why something might be a bad idea, but every time I've ignored it, it's cost me, so I don't ignore that feeling anymore.
Pay very close attention, be very objective about the things that caused your failure.
That's what I would say is just be super objective about what caused the previous failure. You'll start seeing the warning signs sooner. You'll start wanting to prove out your concept faster so that you have more and more proof points that what you're doing next has a chance for success. And even if you do everything right, you can still fail. You can also do a whole bunch of stuff wrong and still succeed.
If you're the kind of person that tends to point at others to avoid admitting your failure, then I would caution you against starting another company. One of the things I like about running my own business is that if I fail, I know exactly who to point the finger at–me.
Henry: When thinking about a new business, don’t fall into the trap of choosing a problem that is common knowledge, because that is likely already a crowded space. If you want to minimize the risk of failure, either be the expert in that specific field or find a co-founder who is.
Milad: The most important thing you can do is reflect. There are two ways we can deal with failure. One way is to ignore it, ignore our responsibility, and say, “Okay, this happened, this wasn't my fault.” The second way is to deeply reflect on what the problem was and what could have been done differently. It’s important to go into great detail, even talking with people outside your own team to see what they think about what happened, even asking for feedback on your processes.
I like to ask my mentors for their candid feedback, and I try to be open to learning from any feedback that they have.
I also like to think that most of the things we are seeing around us are not being built by people smarter than us. So; with good decision making, with good execution and with hard work, we can build something that people will love.
Finally, start with your customers. I think this is the best advice I’ve gotten. And I’d heard it many times before, but this time I lived it. That's why I'm going back to it every time.
Looking at your new venture today, how do you measure success now compared to when you first started your previous business?
Dan: Well, I think there's like the business answer and then there's the personal answer. The business answer is pretty simple. It's in black and white on your profit and loss statement and on your balance sheet. So you look at those and you're like, “Is this doing what it's supposed to be doing? It's growing year-over-year. It's profitable. Is there cash for anything we need?”
All that kind of stuff, that's just plain accounting and good financial management. I've seen a lot of entrepreneurs that have the hockey stick growth on revenue, but they're bleeding more than what they're bringing into the door. Ultimately, I'm not sure that makes for a successful business.
The more important factor for me is, do I wake up and want to show up every day?
It has to be fun. I have to enjoy it, right? There's always bad days and there's always stressful times when you're running your own business. But overall, am I excited to show up? And if the answer is no, then I'm doing something wrong. It's not necessarily that the business is not doing well, but I'm personally doing something wrong.
Milad: Our current focus is on key stats that truly reflect user engagement. We’re looking beyond surface-level KPIs like time on the page or time in the app to get a deeper understanding of engagement.
We are a personalized AI language partner, and our program helps people reach fluency in spoken English. What we are looking for is whether people are improving, and we have specific metrics to see that. Right now, our main focus is to see what challenges they are facing, and how our app is helping them.
The numbers show us that we are helping. For example, one number is the number of words they have spoken. We are seeing a positive relative relationship between this data point and their success in getting to fluent speaking. And we are trying to maximize this.
In my previous startup, I was focusing on how many users we were bringing to our services, what our customer acquisition costs were, and if we could scale the business organically. Things like that are really important, but I don't think that those are important for early-stage startups.
You have to find your product market fit first and then think about scaling your business.