Tuesday, June 25, 2024

Steph Korey, Entrepreneur and Investor, on Embracing Failure

Achieving breakthrough business success requires a company to adopt a different mindset. Whether the business makes significant product enhancements or devises truly innovative marketing campaigns, the firm typically steps “outside of the box” in some way.

Changing the attitude toward failure signals another important paradigm shift. As entrepreneur and investor Steph Korey explains, startup and established business owners alike should embrace the concept of failure for its many benefits.

Two Reasons a Business Should Welcome Failure

From a logical standpoint, suggesting that a company should embrace failures and setbacks sounds like a questionable business strategy. Many business coaches recommend the opposite tactic: developing primary and contingency plans intended as failure avoidance measures.

However, Steph Korey views failure through a drastically different lens. She presents two reasons why a company should embrace failure at every stage of its growth.

Failure Enables New Perspectives

When a business owner experiences failure, it represents an opportunity to bring team members together to analyze the setback and make more appropriate decisions in the future. Everyone’s viewpoint has value, and dissenting opinions can often spark constructive solutions.

Steph Korey stresses the value of gaining different perspectives on key business issues. “We know that we don’t know everything, and it’s why we’re always seeking out new perspectives that challenge our assumptions and using data to inform our gut feelings.

“We also know that we’ll make better decisions for the business when everyone is empowered to bring their unique perspective to the table, even (especially!) when that means people disagree,” Korey concludes. Companies of all sizes can effectively utilize this strategy.

Failure Often Sparks Bigger Successes

Taking a company to the next level, and improving its market position, involve a certain level of risk. If a business appears to seamlessly move forward while encountering very few obstacles or failures, Steph Korey says the company isn’t playing a big enough game.

“Think about it: if everything you do is working, you probably aren’t taking enough risks, which means that even if you’re achieving small wins every day, you aren’t challenging yourself to achieve big wins that will set you apart in a meaningful way,” she explains.

Business Failure Statistics

The U.S. Bureau of Labor Statistics (or BLS) provides some clarity on the number of business failures. According to the BLS, 20% of new businesses close during their first two years of operation.

In addition, 45% of companies fail within their first five years, and 65% close their doors during the first 10 years. Only 25% of new businesses reach the 15-year mark. These statistics have remained relatively stable since the 1990s.

Each potential business failure offers an opportunity to assess the company’s problems and formulate creative solutions. Companies that follow this path are better positioned to eventually achieve success.

Bringing Failure to the Forefront

Focusing attention on each business failure is the first step to learning from this unexpected occurrence. Steph Korey acknowledges that adopting this strategy might be challenging, but it is essential to developing a constructive business culture.

“It’s much easier to talk about failure in hypothetical terms than it is to actually embrace it, but highlighting these moments when they happen helps ensure this mindset becomes an active part of the culture you’re building,” she advises.

Two Effective Discussion Guidelines

To derive maximum benefit from failure-related discussions, Steph Korey says they should occur often. There likely won’t be a “right time” for these difficult conversations, so an effective leader should slot them into a meeting’s schedule.

Next, the company’s leadership should drive these exchanges. Team leaders and executives should speak about their personal mistakes so other team members feel more comfortable sharing their own challenges. Korey sums it up clearly and succinctly.

“As a leader, I share my failures in order to set the expectation with my team that they can feel comfortable doing the same, and to show them how these moments can make us stronger,” Korey stressed.

Spectacular Failures that Preceded Success

It’s easy to assume that highly successful companies enjoyed a steady upward trajectory to industry leadership. However, several high-profile businesses experienced notable failures before achieving the breakthroughs for which they are known. Undaunted, these companies’ leaders persevered, seemingly reveling in rejection as they forged ahead.

Steve Jobs and Apple

The late Steve Jobs, co-founder of the iconic Apple computer and electronics brand, guided the company to unprecedented success. Founded in 1976 in a garage, Apple quickly became known for its intuitive, high-quality products and worldwide brand culture. The firm’s refusal to engage in price wars proved a successful marketing strategy.

In the early 1980s, however, a series of product missteps resulted in Jobs’ tumultuous exit in 1985. He subsequently launched a hardware and software business called NeXT, Inc. Unfortunately, the company’s specialized operating system never gained market traction.

During the mid-1990s, Apple was in a precarious financial and market position. The company’s innovations had stalled, and its resources were dwindling. In 1997, Steve Jobs engineered a return to a leadership role, beginning the company’s dramatic turnaround.

Jobs oversaw the development of innovative new Apple products, such as the iMac, Macbook Air, iPhone, and iPod. In 2005, Steve Jobs reflected on his experience with the company. “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me,” he remarked. In 2018, Apple became the world’s first trillion-dollar company.

Kentucky Fried Chicken

The Kentucky Fried Chicken (or KFC) fast-food restaurant brand has become one of the world’s most recognizable food brands. Over 75 years ago, founder Colonel Harland Sanders wrote down his now-famous chicken seasoning recipe on his kitchen door. This “finger-lickin’ good” herbs and spices blend helped to launch the franchise-based brand into the fast-food marketplace.

Decades later, this international company operates over 23,000 restaurants in more than 135 countries and territories. KFC’s Original Recipe is now accompanied by new flavors and chicken-focused product offerings.

However, Colonel Sanders’ path to success was littered with obstacles. First, he had previous failed careers as a lawyer and a salesman who marketed insurance, tires, and lamps.

However, Sanders’ most memorable failure was directly connected to his now-famous chicken seasoning recipe. He pitched the secret blend to over 1,000 potential franchisees, who all turned him down. Finally, the 1010th person signed on the dotted line, helping the 62-year-old founder to realize his long-held dream.

Walt Disney Company

The Walt Disney Company is known for famous cartoon characters such as Donald Duck and Mickey Mouse. Today, this global brand has become involved in theme parks, feature films, and pop culture phenomena such as Star Wars and Marvel Comics. In recognition of Walt Disney’s decades-long movie industry achievements, he received 22 Academy Awards.

Although Walt Disney would later meet with remarkable success, his career had a rocky start. Working for a Missouri newspaper in his early twenties, he was fired for “not being creative enough.” In 1921, Disney launched Laugh-O-Gram Studio, his first animation venture. Two years later, the company went bankrupt.

Not easily deterred, Walt Disney decided to reinvent himself in Hollywood. He soon founded the Disney Brothers Cartoon Studio, later renamed the Walt Disney Studio.  Over the years, he met with widespread success, and many new opportunities magically appeared on the horizon.

In 1957, Walt Disney summed up his attitude toward failure. “All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me…You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you,” he reflected.

About Steph Korey

Steph Korey is a successful entrepreneur and investor who focuses on supporting talented entrepreneurs from underrepresented communities. Born in Ohio, she enjoyed a multicultural upbringing, as her Lebanese father and Romanian mother often visited relatives in the Middle East and Europe.

Today, she credits those enriching experiences with helping her to develop an appreciation for diverse entrepreneurs’ talents. “Exposure to different cultures has always been a part of my life. I’m lucky to have had the opportunity to travel so much with my family growing up, and it’s shaped a lot of my perspectives and how I see the world,” Korey reflects.

Korey’s College Education Lays the Groundwork

Steph Korey’s culturally rich background likely influenced her college journey. Attending Brown University, she earned a Bachelor of Arts in International Relations. After serving as Head of Supply Chain at eCommerce eyeglasses retailer Warby Parker, she worked toward her MBA at Columbia Business School.

While pursuing her studies, Korey performed merchandise strategy work for Casper, the increasingly well-known direct-to-consumer (or DTC) mattress company. After completing stints at both firms, she saw that an effective DTC business model could enable a company to bring an upscale product directly to its consumers.

The Value of Impactful Storytelling

Steph Korey understands that growing a successful brand depends on factors besides the product. Through effective storytelling, the audience embraces the company’s message, an essential step in turning them into customers.

“My experiences at Warby and Casper also proved that a brand’s success is determined by so much more than just a great product. People don’t get excited about eyeglasses or mattresses—they get excited about the story those brands are telling,” she explains.

Steph Korey Excels in New Roles

In 2015, Steph Korey co-founded upscale lifestyle company Away. During her tenure, the firm reached a $1.4B valuation and raised $156M. While in her leadership role, Fast Company twice named Away as one of its Most Innovative Companies.

Today, Steph Korey is an active angel investor who frequently advises the businesses she supports. Forbes previously named her to its 30 Under 30 list for Retail and eCommerce. She has also been honored as an EY Entrepreneur of the Year. In 2018 and 2019, Steph Korey appeared on Goldman Sachs’  roll of 100 Builders + Innovators. Currently, she resides in New York City with her family.

Maintaining Perspective is Key

While an entrepreneur builds their business, they will make countless decisions that define their company’s path. Although some choices will propel the business forward, others may not work out quite as planned. Steph Korey emphasizes the value of keeping these “detours” in perspective, as they are important in the larger scheme of the business’ growth.

“Ultimately, your life and your career are made up of many small, but innately important choices: some of them will be the right ones, and some of them won’t be. Keeping this in mind can help to ensure that you maintain necessary perspective and don’t view every failure as a major setback, but just a helpful piece of the bigger picture,” she concludes.

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