Opinions expressed by Entrepreneur contributors are their own.
Key Takeaways
- Respect what you don’t know — if you want to enter an unfamiliar field, partner with someone who has spent years in it, and listen to them.
- Know when to let go, and understand that closing a venture is not the same as failing as a person. Give yourself time to recover, and study the failure on purpose.
- Try again, and don’t wait too long. Speed here does not mean recklessness. It means shortening the gap between learning a lesson and acting on it.
In 1989, I opened an Italian restaurant in Tsim Sha Tsui, Hong Kong, where the waiters sang opera arias between courses. It was a lot of fun, but it was not a good business, and it closed in 1993.
I had assumed running a restaurant was easy. It isn’t. The location was wrong, the costs were too high, and I didn’t know the trade well enough to see either problem early. Around the same time, I put money into film production and property. Both businesses struggled and were sold in the mid-1990s.
I share this because founders tend to talk about their successes and quietly bury the rest. Yet failure is a normal part of business. According to the U.S. Bureau of Labor Statistics, only about half of new U.S. business establishments are still operating five years later. Hong Kong is no different. In 2025, a record number of companies registered in the city, but the South China Morning Post reported that more than 99,000 were dissolved in the same year.
Here are five lessons I have learned about failing — and about recovering.
1. Respect what you don’t know
Most of my early setbacks came from businesses I entered because they looked exciting, not because I understood them. The pattern is common. CB Insights’ 2026 analysis of startup shutdowns found that 43% cited poor product-market fit. I suspect many of those founders were very capable. They had simply misread a market they didn’t know well enough.
My rule since then has been simple: Never set up a business you don’t know. If you want to enter an unfamiliar field, partner with someone who has spent years in it, and listen to them.
2. Know when to let go
The hardest decision in a struggling business is often the decision to stop. CB Insights found that 70% of failed startups ultimately ran out of capital, but running out of money is usually the last symptom, not the cause. By the time the bank balance forces your hand, months or even years may have been lost.
The same analysis, as reported by Crowdfund Insider, found that nearly a quarter of these companies had been “walking dead” for three years or more after their last funding round, still operating but no longer really growing. Hanging on rarely saves a business. More often, it makes the eventual decision more expensive.
Selling the film and property businesses was painful, but it freed up time, money and attention for something better. Closing a venture is not the same as failing as a person.
3. Give yourself time to recover
Losing a business can feel like a bereavement, and research suggests we should treat it as one. Professor Dean Shepherd’s work on grief and business failure, published in the Academy of Management Review, argues that founders recover and learn faster when they move between confronting the loss and stepping away from it, rather than dwelling on it or pretending it never happened.
The emotional cost is real. In a study of 242 entrepreneurs led by Dr. Michael Freeman of the University of California, San Francisco, 72% reported being affected by mental health conditions, either directly or through their families. Talk to someone you trust, sleep properly and keep exercising. You need a clear head to make your next decision well.
I learned to look after myself early. My father died when I was 18, aged just 49, and it made me take my health seriously long before it was fashionable. In difficult periods in business, that habit has helped keep me steady.
4. Study the failure on purpose
Experience alone does not make you a better founder. Harvard research by Paul Gompers and colleagues found that venture-backed entrepreneurs whose previous company had failed had a 20% chance of success next time, barely above the 18% for first-time founders. Those who had succeeded before had a 30% chance.
It also helps to know what kind of failure you are dealing with. In her book Right Kind of Wrong, Harvard Business School professor Amy Edmondson separates basic failures, caused by avoidable mistakes, from “intelligent failures,” which happen when you test a sensible idea in new territory and keep the downside small. The first kind should be prevented. The second is the price of progress.
The lessons don’t arrive by themselves. After a setback, I now write down what I assumed, what actually happened and what I would do differently, then ask someone outside the business to challenge it. Early in a career, a setback can feel like a judgment on your ability. With practice, it becomes a source of information.
5. Try again, and don’t wait too long
A 2019 study in Nature by Yian Yin, Dashun Wang and colleagues analyzed more than 58,000 venture-backed startups, alongside other fields. People who eventually succeeded did not fail less often than those who didn’t. The difference was that each new attempt came faster, because they built on what they had already learned instead of starting from scratch. Speed here does not mean recklessness. It means shortening the gap between learning a lesson and acting on it.
That takes courage. The Global Entrepreneurship Monitor’s 2025/2026 report found that fear of failure deters two in five adults from starting a business. It also found that people who have previously exited a business are more likely to start again.
As I once told an interviewer, all these failures are what have shaped me. If you are recovering from one now, be patient with yourself, be honest about what went wrong, and, when you are ready, go again.
Key Takeaways
- Respect what you don’t know — if you want to enter an unfamiliar field, partner with someone who has spent years in it, and listen to them.
- Know when to let go, and understand that closing a venture is not the same as failing as a person. Give yourself time to recover, and study the failure on purpose.
- Try again, and don’t wait too long. Speed here does not mean recklessness. It means shortening the gap between learning a lesson and acting on it.
In 1989, I opened an Italian restaurant in Tsim Sha Tsui, Hong Kong, where the waiters sang opera arias between courses. It was a lot of fun, but it was not a good business, and it closed in 1993.
I had assumed running a restaurant was easy. It isn’t. The location was wrong, the costs were too high, and I didn’t know the trade well enough to see either problem early. Around the same time, I put money into film production and property. Both businesses struggled and were sold in the mid-1990s.
I share this because founders tend to talk about their successes and quietly bury the rest. Yet failure is a normal part of business. According to the U.S. Bureau of Labor Statistics, only about half of new U.S. business establishments are still operating five years later. Hong Kong is no different. In 2025, a record number of companies registered in the city, but the South China Morning Post reported that more than 99,000 were dissolved in the same year.
