What Not To Say When a Friend’s Company is Failing

Failure is part of the startup ecosystem and it’s not fun. I’ve never met someone who had a failed company who would have preferred failure to success. While failure is a necessary part of the startup ecosystem, it has human consequences. Lately I’ve had some personal experiences with failure and had the chance to have pretty honest conversations with friends and colleagues whose companies are on the verge of not working out barring a miracle or recently failed. One thing that has struck me is that a lot of well-meaning people can say the wrong things when a friend or colleagues’ startup isn’t working and is about to fail. I wanted to write a quick post about a few things I commonly hear people say that I think are well-meaning but not helpful when you’re on the horns of a failing company.

Entrepreneurs tend to be highly identified with and invested in their companies. It’s hard not to take failure personally. When your company is failing, there’s not much other people can tell you to make you feel better.
Tolerating and accepting failure is not the same as celebrating failure and most people don’t expect failure to happen to them. The value in failing is that it hopefully teaches your real-world (as opposed to textbook or blog post) lessons about what to do and not to do. Failure should also keep you humble and grounded and makes you realize how hard it is to build a sucessful company.

That being said, there are a few things I’ve heard people say and caught myself saying only to realize that they’re not really what you want to hear when things don’t work out.

“This failure will make you a stronger entrepreneur.” – This is undoubtedly true in many cases. But it’s not helpful when you’re in the midst of things not working out. The closer you get to the finality of failure, the more one tends to focus on the present and immediate circumstances and the less you tend to care about the future. There’s probably a time to have that conversation, but it’s not when the prospect of failure feels imminent or the finality of that company’s demise is still raw.

“Lots of startups fail / failure is part of the process / generic comment about how startups often don’t work out” – This too is a true statement of fact. Lots of startups fail. Reminding entrepreneurs that failure is part of the process and that entrepreneurship is inherently risky does not help much in the moment. Telling your friend that his or her startup is part of the statistical pool that fails doesn’t help that person deal with the very real fact that his or her company is not going to work out.

“Successful people often point to their failures as being important to their success.” – This is related to the point above. It’s not surprising that people who are ultimately successful have the perspective on why things that didn’t work out were instrumental or important elements of their eventual success. But that’s a backward looking statement and it doesn’t necessarily mean a lot when you are in the moment, trying to deal with failure.

I think one of the best things you can say to a friend whose company is about to fail or has failed is “I’m sorry it didn’t work out and I hope you’re doing okay. Let me know if there’s anything I can do to help you out.” Talking to a bunch of people has made me realize how important it is to be thoughtful about what you say to people who are going through tough times in business.

As always, I’m open to comments and feedback below or you can chat with my on Twitter @chudson.

  • Ross

    Hi Charles… this was a good post. I had a start-up back in the 90s
    that beat a lot of the odds and lasted for nearly a decade. And still it
    died… that one really hurt because I thought we *had* made it.

    Since then I’ve been an employee of three start-ups, none of which worked out well for me in the long-term. One was very successful financially but
    was taken over by a competitor (long story). Another was also pretty
    successful money-wise, but was sued out of existence.

    I have learned to separate my sense of self-worth from any of these, but
    it is still very hard to watch something you’ve poured your emotions and
    time and energy into just up and disintegrate.

    All that to say your post brought back lots of memories, and I think your advice is spot-on.

  • http://www.gordonbowman.com/ Gordon Bowman

    Good post and agree. Especially on point #2. Hearing that “most startups fail” and that yours isn’t any better than the majority doesn’t help anything. Instead it just points out (rather brutally since it’s from a good friend) that which you already know.

  • niket

    “I’m sorry it didn’t work out and I hope you’re doing okay. Let me know if there’s anything I can do to help you out.”

    That’s the best thing I’ve read about how to handle this type of situation. (probably applies to many other things too).