This February, IE Business School brought together some of Spain and Israel’s most prominent entrepreneurs and investors for a conference about an essential element of the entrepreneurial endeavor: Failure.“The Advantages of Failure,” the first conference of its kind hosted by a business school, asked participants to speak about their greatest failures as entrepreneurs, how they learned from and eventually overcame them. Present in all entrepreneurial markets, the fear of failure is one of the biggest obstacles to fomenting a successful European entrepreneurial ecosystem. In Spain, for example, more than 50% of those interviewed by the Global Entrepreneurship Monitor (GEM), the largest single study of entrepreneurial activity in the world, note that the fear of failure is a key impediment to becoming an entrepreneur.
The start of the conference delved into the lessons learned from experience:
•Jose María Castillejo, Chairman of the Board of Directors of Zinkia Entertainment SA, whose principal product is the animated figure Pocoyo, recounted his experience with a Ukrainian train heist. The son of a local Ukranian politician “hid” a train full of sunflower seeds in order to squeeze Castillejo out of a profitable business exporting sunflower seed oil.
•Jesús Encinar, founder and CEO of Spain’s top real estate website Idealista.com explained how the failures of his parents’ first businesses – and the subsequent need to relocate from his childhood home – made him ever vigilant of bank debt and possible business failure. In 2008, Encinar was named a Young Global Leader by the World Economic Forum.•Alberto Knapp Bjerén, CEO of Spain´s leading experience design firm The Cocktail most recently conceived and funded Iwannagothere.com, a collaborative travel guide that won the 2010 Webby Award as the Best Travel Site in USA. During the conference, he recounted the efforts and failures of a stubborn entrepreneur to create undersea trans-Atlantic cable lines.
•Gustavo Garcia Brusilovsky, who most recently sold BuyVip (Europe’s leading online shopping community) to Amazon for approximately €80 million, discussed how his first start-up was a success for the investors but not for the initial founders. He also commented on how BuyVip’s successful sale arose from a failed effort to reach a strategic consensus between the company’s founders and investors.
“Failure must be reconceived as a key element in the trial and error process that defines entrepreneurship, and a necessary precursor to success. While it is not always the easiest experience, failure is a fundamental experience that can even lead to unexpected and profitable rewards,” said Gary Stewart, IE Business School Professor and managing director of the School’s Venture Lab. “At IE, we strive to develop entrepreneurially minded managers – change agents who can successfully navigate the ups and downs of a business, whether they work at a start up, an NGO, or a multinational company.”
The second half of the conference included a panel focused on what European entrepreneurs can learn from Israel about the advantages of failure. While Spain’s entrepreneurial ecosystem is still in the relatively early stages, Israel has more companies quoted on the NASDAQ than Europe, China, and India combined, is ranked second in the world for venture funds after the United States, and has approximately 45% of its exports in the high-tech sector.
The Israeli panel proffered advice on how Europe can reinvent itself as a high-tech, “start-up nation” by create a new generation of “super-angels” – former entrepreneurs who offer “smart money” and advice to promising entrepreneurs. Panelists included Professor Nir N. Brueller, Ph.D., an expert in corporate strategy and faculty member of Leon Recanati Graduate School of Business Administration, Tel Aviv University; Jonathan Saacks, general partner at Israel’s leading innovation-driven venture capital firm Genesis Partners who noted that “if there is a recipe for success, failure must be the main ingredient”; Professor Dan Galai, Ph.D. of the School of Business Administration at the Hebrew University in Jerusalem, Principal in Sigma P.C.M. Ltd., co-founder of MutualArt Inc and the initial business angel investor in Quigo, which was later sold to AOL for $340 million; and Yaron Samid, founder and CEO of personal finance security start-up BillGuard, and founder and chairman of TechAviv, the global Israeli startup founders club with over 2000 members in Silicon Valley, Boston, New York and Tel Aviv.
The conference was organized in collaboration with SeedRocket, the Rafael del Pino Foundation (Fundación Rafael del Pino) and the Bancaja Chair for Young Entrepreneurs at IE University (Cátedra Bancaja Jóvenes Emprendedores IE University).
IE Business School was itself founded by entrepreneurs, so the vein runs deep in all aspects of the School. In fact, every student in the International MBA program learns about the entrepreneurial process and designs a business plan with help from a community of more than 200 tutors from the business world. Established in 1985, IE’s Department of Entrepreneurship acts as a platform for all related initiatives, including Programs in Corporate Venturing for clients such as Siemens, in Germany; web portal ICEVED, which links 24 international schools and acts as an interface for entrepreneurs and investors; the NETI project, a program in collaboration with Amena oriented to the creation of new innovative technology firms; The Chair in Entrepreneurship and Family Businesses, which researches entrepreneurial issues; as well as the Spanish analysis of the yearly GEM Report.