Within the Canadian startup community, there is a palpable fear of failure.
When a business falters or sputters to an abrupt halt, there is a lot of quiet discussion and condolences for the dearly departed – sort of like talking about someone who has recently passed away.
We tend to treat failure as something bad, with little or no upside.
Given the high failure rate of startups, this is an unhealthy and realistic state of affairs.
A contrasting view is embraced by Silicon Valley, which looks at failure as an education and/or a rite of entrepreneurial passage.
Rather than seeing failure as the glass being half-empty, people in Silicon Valley optimistically see it has half-full, even if it is a spectacular failure that sees lot of money evaporates.
In light of our fear about failure, it is interesting to see the reaction to a recent announcement by Sprouter that its social media network for entrepreneurs would shut down on Aug. 2 due to “capital restraints” and a lack of options.
In other words, it ran out of time and money.
Sprouter’s failure was due to its inability to create a business model. Despite a redesign of its website and aggressive marketing efforts, which included attending startup events around the world, Sprouter couldn’t transform itself into a sustainable business.
This is a problem that afflicts many startups that begin with a vision but struggle to create a product or service that people are willing to pay to use or support through sponsorship or advertising.
The silver lining is Sprouter’s social network, which worked much like Twitter, had many users, and the Toronto-based company ran free monthly events that attracted hundreds of attendees.
As well, Sprouter’s founder, Sarah Prevette, and its community manager, Erin Bury, demonstrated a flair for marketing and promotion that created a strong brand for the company (and themselves) within the startup and entrepreneurial communities. even if Sprouter was struggling to find its way.
While Sprouter was forced to call it a day after failing to attract additional financing, the upside is that Ms. Prevette and Ms. Bury gained experience that they, hopefully, will bring to new startups or other companies.
So while Sprouter is “heartbroken” to be closing its doors and its investors are undoubtedly disappointed, it is not all bad news, as long as the company’s failure is seen in a positive light rather than as a doom-and-gloom development.
Special to The Globe and Mail
Mark Evans is the principal with ME Consulting, a communications and marketing strategic consultancy that works with startups and fast-growing companies to create compelling and effective messaging to drive their sales and marketing activities. Mark has worked with four startups – Blanketware, b5Media, PlanetEye and Sysomos. He was a technology reporter for more than a decade with The Globe and Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshmarketing and meshwest conferences.
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