Global-Spin News

The Importance of Understanding Failures

The Importance of Understanding Failures
Monday, 5 March 2018

While success stories can motivate new entrepreneurs, stories of failure can help understand what not to do and how not to do it. Therefore, the study of academic spin-offs doesn’t end with those who are successful, but transcends to study the ones who didn’t make it as well. When studying the field, it seems that the main negative impacts on academic spin-offs includes the lack of a champion, poor marketing development, an absence of market experience, and an unbalanced shareholder structure. [1]

The success of spin-offs is based on a combination of the previously mentioned elements and additional ones, and when these elements work together (or don’t) we are able to see the outcomes. Of all the impact factors, it is the organisation—whether you call it management failure, lack of leadership, or an incomplete market strategy—that seems to impact the wellbeing of the company the most. [2]

In contrast, it is not as common to find that it is the undercapitalisation or insufficient financial resources that are the reason for failure. When a team develops a winning product or strategy, their probability of success increases, regardless of the financial situation (in fact, in some cases having a lack of budget can lead to creative marketing and improved results). [1]

What does this teach us? It is absolutely necessary to make sure that the management, whether this is one person or a team, is prepared to take on the organisation challenges he/she/it will face. This also means that the inherent goal behind the GLOBAL-SPIN Project of creating training for spin-off and start-up management will be able to help these entities be successful.