Redefining Failure: Why Getting it Wrong is Part of the Equation
“Failure in the entrepreneurial vernacular is reframed as intentional iteration and experimentation.” –Hedi Neck
Most entrepreneurs will tell you that they failed multiple times before getting their business right. In fact, it’s part of the entrepreneurial DNA: you try an idea, you fail, and you try another until you get it right. Failure, in fact, is part of the expected dynamic. There are even some who say that if you have not failed, you are not a real entrepreneur.
The companies which are trailblazing in mobile money and branchless banking have learned from their failures and made them a success. Take M-Shwari in Kenya which was launched in November 2012. The product operates 6 million accounts, and records 450,000 transactions per day. But this was not Safaricom’s first attempt to introduce a linkage banking solution. Does anyone remember M-KESHO, the ill-fated product launched by Safaricom and Equity in 2010? Hailed as a breakthrough innovation at the time, it was meant to encourage M-PESA users to push their savings into an interest bearing account with Equity. But not long after launch, both Safaricom and Equity pulled back on promoting the service. A slew of relationship issues and problems in the underlying product design led both companies to prioritize their own products over M-KESHO. Instead of dwelling on this failure, Safaricom turned it into a source of future creativity. Two years later, M-Shwari was born.
Photo by Yavuz Sariyildiz
By the time M-Shwari went to market, Safaricom had learned how important it was to choose the right partner. So they launched the product with a commercial bank, instead of a retail bank, as they knew there would be no issues over cannibalization of products. They also learned that customers needed incentives to push their money into a separate interest bearing account, and interest was not always compelling enough. So they introduced the on-demand credit facility and rewarded good savers with higher credit limits.
Even with evidence that successes are born out of failures, we still see our most seasoned colleagues openly becoming disheartened about the effort and money put into branchless banking projects they describe as “ill-omened”, while others point to the scant results on the ground. There is indeed a lot to fix before we instigate massive industry growth—from organizational cultures to regulatory environments and so on. Yet, as long as we are continuously learning from our failures and mistakes, we can accept these as a part of the pathway to success and still be optimistic.
Six years is not a long time for an industry to grow or learn. It is not surprising that our seasoned colleagues are disheartened. Many of us are not entrepreneurs and our tolerance for failure and frustration is low. But an entrepreneurial mindset is vital for growth in our industry. We are, as our friends at Forbes call it, in an intentional cycle of iteration and experimentation—where we should expect to get it wrong, and where we expect to fail. And those of us who eventually do get it right will have probably learned the valuable lesson that patience and failure go hand in hand in the grand scheme of success.
Over the coming weeks, thinkers and doers from within the branchless banking community will be contributing to this blog series on the topic of failure. We will work to reframe our view of failure, acknowledging that every failure, if recognized, learned from, and integrated into future creation, can lead to iteration, innovation and ultimately (we hope!) success. We will also turn our attention to success, and show how ‘stumbling’ along the way can sometimes lead you to unimaginable breakthroughs.
Through this blog series, we hope to cultivate a stronger and smarter approach to solution creation by reflecting on our mistakes and failures. It's only through such reflection that we can gain proper perspective on how to realize success.