[This talk contains mature language Viewer discretion is advised]
If we traveled back to the year 800 BC,
in Greece, we would see that merchants whose businesses failed
were forced to sit in the marketplace with a basket over their heads.
In premodern Italy,
failed business owners, who had outstanding debts,
were taken totally naked to the public square
where they had to bang their butts against a special stone
while a crowd jeered at them.
In the 17th century in France,
failed business owners were taken to the center of the market,
where the beginning of their bankruptcy was publicly announced.
And in order to avoid immediate imprisonment,
they had to wear a green bonnet
so that everyone knew they were a failure.
Of course, these are extreme examples.
But it is important to remember
that when we excessively punish those who fail,
we stifle innovation and business creation,
the engines of economic growth in any country.
Time has passed, and today we don't publicly humiliate failed entrepreneurs.
And they don't broadcast their failures on social media.
In fact, I think that all of us can relate with the pain of failure.
But we don't share the details of those experiences.
And I totally get it, my friends, I have also been there.
I had a business that failed
and sharing that story was incredibly hard.
In fact, it required seven years, a good dose of vulnerability
and the company of my friends.
This is my failure story.
When I was in college, studying business, I met a group of indigenous women.
They lived in a poor rural community in the state of Puebla, in central Mexico.
They made beautiful handmade products.
And when I met them and I saw their work,
I decided I wanted to help.
With some friends, I cofounded a social enterprise
with the mission to help the women create an income stream
and improve their quality of life.
We did everything by the book,
as we had learned in business school.
We got investors,
we spent a lot of time building the business and training the women.
But soon we realized we were novices.
The handmade products were not selling,
and the financial plan we had made was totally unrealistic.
In fact, we worked for years without a salary,
hoping that a miracle would happen,
that magically a great buyer would arrive
and she would make the business profitable.
But that miracle never happened.
In the end, we had to close the business,
and that broke my heart.
I started everything to create a positive impact
on the life of the artisans.
And I felt that I have done the opposite.
I felt so guilty
that I decided to hide this failure
from my conversations and my resume for years.
I didn't know other failed entrepreneurs,
and I thought I was the only loser in the world.
One night, seven years later, I was out with some friends
and we were talking about the life of the entrepreneur.
And of course, the issue of failure came out.
I decided to confess to my friends the story of my failed business.
And they shared similar stories.
In that moment, a thought became really clear in my mind:
all of my friends were failures.
(Laughter)
Being more serious, that night I realized
that A: I wasn't the only loser in the world,
and B: we all have hidden failures.
Please tell me if that is not true.
That night was like an exorcism for me.
I realized that sharing your failures makes you stronger, not weaker.
And being open to my vulnerability
helped me connect with others in a deeper and more meaningful way
and embrace life lessons I wouldn't have learned previously.
As a consequence of this experience
of sharing stories of businesses that didn't work,
we decided to create a platform of events
to help others share their failure stories.
And we called it Fuckup Nights.
Years later, we also created a research center
devoted to the story of failure
and its implications on business, people and society
and as we love cool names, we called it the Failure Institute.
It has been surprising to see
that when an entrepreneur stands on a stage
and shares a story of failure,
she can actually enjoy that experience.
It doesn't have to be a moment of shame and embarrassment,
as it used to be in the past.
It is an opportunity to share lessons learned
and build empathy.
We have also discovered
that when the members of a team share their failures, magic happens.
Bonds grow stronger and collaboration becomes easier.
Through our events and research projects,
we have found some interesting facts.
For instance, that men and women react in a different way
after the failure of a business.
The most common reaction among men
is to start a new business within one year of failure,
but in a different sector,
while women decide to look for a job
and postpone the creation of a new business.
Our hypothesis is that this happens
because women tend to suffer more from the impostor syndrome.
We feel that we need something else to be a good entrepreneur.
But I have seen that in many, many cases women have everything that's needed.
We just need to take the step.
And in the case of men,
it is more common to see that they feel they have enough knowledge
and just need to put it in practice in another place with better luck.
Another interesting finding has been
that there are regional differences on how entrepreneurs cope with failure.
For instance, the most common reaction
after the failure of a business in the American continent
is to go back to school.
While in Europe, the most common reaction is to look for a therapist.
(Laughter)
We're not sure which is a better reaction after the failure of a business,
but this is something we will study in the future.
Another interesting finding has been
the profound impact that public policy has on failed entrepreneurs.
For instance, in my country, in Mexico,
the regulatory environment is so hard,
that closing a business can take you a lot of time and a lot of money.
Let's begin with the money.
In the best possible scenario,
meaning you don't have problems with partners,
providers, clients, employees,
in the best possible scenario,
officially closing a business will cost you 2,000 dollars.
Which is a lot of money in Mexico.
Someone who earns the minimum wage
would have to work for 15 months to save this amount.
Now, let's talk about the time.
As you may know, in most of the developing world,
the average life expectancy of a business is two years.
In Mexico, the process of officially closing a business takes two years.
What happens when the average life expectancy of a business
is so similar to the time it will take you to close it if it doesn't work?
Of course, this discourages business creation
and promotes informal economy.
In fact, econometric research has proved
that if the process of declaring bankruptcy takes less time and less money,
more new firms will enter the market.
For this reason, in 2017,
we proposed a series of public policy recommendations
for the procedure of officially closing businesses in Mexico.
For a whole year,
we worked with entrepreneurs from all over the country
and with Congress.
And the good news is that we managed to help change the law.
Yay!
(Applause)
The idea is that when the new regulation comes into force,
entrepreneurs will be able to close their businesses in an online procedure
that is faster and inexpensive.
(Sighs)
On the night we invented Fuckup Nights,
we never imagined that the movement would grow this big.
We are in 80 countries now.
In that moment, our only intention
was to put the topic of failure on the table.
To help our friends see that failure is something we must talk about.
It is not a cause of humiliation, as it used to be in the past,
or a cause of celebration, as some people say.
In fact, I want to confess something.
Every time I listen to Silicon Valley types or students
bragging about failing fast and often like it's no big deal, I cringe.
Because I think that there is a dark side on the mantra "fail fast."
Of course, failing fast is a great way to accelerate learning
and avoid wasting time.
But I fear that when we present rapid failure
to entrepreneurs as their one and only option,
we might be promoting laziness.
We might be promoting that entrepreneurs give up too easily.
I also fear that the culture of rapid failure
could be minimizing the devastating consequences
of the failure of a business.
For instance, when my social enterprise died,
the worst part was that I had to go back to the indigenous community
and tell the women that the business had failed
and it was my fault.
For some people this could be seen like a great learning opportunity for me,
but the truth is that the closure of this business
represented much more than that.
It meant that the women would stop receiving an income
that they really needed.
For this reason, I want to propose something.
I want to propose that just as we put aside the idea
of publicly humiliating failed entrepreneurs,
we must put aside the idea that failing fast is always the best.
And I want to propose a new mantra:
fail mindfully.
We must remember that businesses are made of people,
businesses are not entities that appear and disappear
magically without consequences.
When a firm dies, some people will lose their jobs.
And others will lose their money.
And in the case of social and green enterprises,
the death of this business can have a negative impact
on the ecosystems or communities they were trying to serve.
But what does it mean to fail mindfully?
It means being aware of the impact, of the consequences
of the failure of that business.
Being aware of the lessons learned.
And being aware of the responsibility
to share those learnings with the world.
Thank you.
(Applause)