Don’t Fail Fast – Fail Mindfully: Leticia Gasca (Transcript)

Leticia Gasca at TED Talks

Leticia Gasca – TED Talk TRANSCRIPT

If we traveled back to the year 800 BC, in Greece, we would see that merchants whose businesses failed were forced to sit in the marketplace with a basket over their heads.

In premodern Italy, failed business owners, who had outstanding debts, were taken totally naked to the public square where they had to bang their butts against a special stone while a crowd jeered at them.

In the 17th century in France, failed business owners were taken to the center of the market, where the beginning of their bankruptcy was publicly announced.

And in order to avoid immediate imprisonment, they had to wear a green bonnet so that everyone knew they were a failure. Of course, these are extreme examples.

But it is important to remember that when we excessively punish those who fail, we stifle innovation and business creation, the engines of economic growth in any country.

Time has passed, and today we don’t publicly humiliate failed entrepreneurs. And they don’t broadcast their failures on social media. In fact, I think that all of us can relate with the pain of failure. But we don’t share the details of those experiences.

And I totally get it, my friends, I have also been there. I had a business that failed and sharing that story was incredibly hard. In fact, it required seven years, a good dose of vulnerability and the company of my friends.

This is my failure story.

When I was in college, studying business, I met a group of indigenous women. They lived in a poor rural community in the state of Puebla, in central Mexico. They made beautiful handmade products.

And when I met them and I saw their work, I decided I wanted to help. With some friends, I cofounded a social enterprise with the mission to help the women create an income stream and improve their quality of life.

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We did everything by the book, as we had learned in business school. We got investors, we spent a lot of time building the business and training the women.

But soon we realized we were novices. The handmade products were not selling, and the financial plan we had made was totally unrealistic. In fact, we worked for years without a salary, hoping that a miracle would happen, that magically a great buyer would arrive and she would make the business profitable.

But that miracle never happened.

In the end, we had to close the business, and that broke my heart. I started everything to create a positive impact on the life of the artisans. And I felt that I have done the opposite.

I felt so guilty that I decided to hide this failure from my conversations and my resume for years. I didn’t know other failed entrepreneurs, and I thought I was the only loser in the world.

One night, seven years later, I was out with some friends and we were talking about the life of the entrepreneur. And of course, the issue of failure came out. I decided to confess to my friends the story of my failed business. And they shared similar stories.

In that moment, a thought became really clear in my mind: all of my friends were failures.

Being more serious, that night I realized that a) I wasn’t the only loser in the world, and b) we all have hidden failures. Please tell me if that is not true.

That night was like an exorcism for me. I realized that sharing your failures makes you stronger, not weaker. And being open to my vulnerability helped me connect with others in a deeper and more meaningful way and embrace life lessons I wouldn’t have learned previously.

As a consequence of this experience of sharing stories of businesses that didn’t work, we decided to create a platform of events to help others share their failure stories. And we called it Fuckup Nights.

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Years later, we also created a research center devoted to the story of failure and its implications on business, people and society and as we love cool names, we called it the Failure Institute.

It has been surprising to see that when an entrepreneur stands on a stage and shares a story of failure, she can actually enjoy that experience. It doesn’t have to be a moment of shame and embarrassment, as it used to be in the past. It is an opportunity to share lessons learned and build empathy.

We have also discovered that when the members of a team share their failures, magic happens. Bonds grow stronger and collaboration becomes easier. Through our events and research projects, we have found some interesting facts.

For instance, that men and women react in a different way after the failure of a business. The most common reaction among men is to start a new business within one year of failure, but in a different sector, while women decide to look for a job and postpone the creation of a new business.

Our hypothesis is that this happens because women tend to suffer more from the impostor syndrome. We feel that we need something else to be a good entrepreneur.

But I have seen that in many, many cases women have everything that’s needed. We just need to take the step. And in the case of men, it is more common to see that they feel they have enough knowledge and just need to put it in practice in another place with better luck.

Another interesting finding has been that there are regional differences on how entrepreneurs cope with failure. For instance, the most common reaction after the failure of a business in the American continent is to go back to school. While in Europe, the most common reaction is to look for a therapist.

We’re not sure which is a better reaction after the failure of a business, but this is something we will study in the future.

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Another interesting finding has been the profound impact that public policy has on failed entrepreneurs. For instance, in my country, in Mexico, the regulatory environment is so hard, that closing a business can take you a lot of time and a lot of money.

Let’s begin with the money. In the best possible scenario, meaning you don’t have problems with partners, providers, clients, employees, in the best possible scenario, officially closing a business will cost you $2,000. Which is a lot of money in Mexico. Someone who earns the minimum wage would have to work for 15 months to save this amount.

Now, let’s talk about the time. As you may know, in most of the developing world, the average life expectancy of a business is two years. In Mexico, the process of officially closing a business takes two years.

What happens when the average life expectancy of a business is so similar to the time it will take you to close it if it doesn’t work? Of course, this discourages business creation and promotes informal economy.

In fact, econometric research has proved that if the process of declaring bankruptcy takes less time and less money, more new firms will enter the market. For this reason, in 2017, we proposed a series of public policy recommendations for the procedure of officially closing businesses in Mexico.

For a whole year, we worked with entrepreneurs from all over the country and with Congress. And the good news is that we managed to help change the law. Yay!

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