How to successfully deal with failure and turn it into a big win

How to successfully deal with failure and turn it into a big win

No matter how big or small a failure is, failing sucks. Period.

It’s true that you can learn much more from failure than from success, and it’s true that every successful person went through a series of failures before reaching the top, but still

… winning is sweet, and failing sucks.

The problem with failure is that if it’s not managed properly, it can do serious damage to your life or potential.

A big improperly managed failure can get you financially or emotionally bankrupt, stuck in the comfort zone forever, or even cause you to quit when success is just around the corner.

That’s why I decided to write a (short) manual on how to properly deal with failure. In this article, you will learn all the important things surrounding failure:

  • How to properly prepare for failure before you even take any action
  • When to persist and when to quit after a failure occurs
  • How to deal with the emotional suffering caused by failure
  • Tricks to make sure your mind doesn’t go crazy when things go tough
  • How to prepare a plan to get yourself out of failure

Along the way, I will give you an example of my recent failure, so you can see the practical application of this failure manual.

To keep things short, I launched an online course, sent a promotional e-mail to my mailing list (around 3,000 active subscribers, cleaned from 5,000 in total) and I only sold 2 subscriptions. By pushing hard, I could probably get to 5 or 10, but that’s far from enough.

Well, whether you’re just in the middle of a failure or not, I’m sure you’re curious about what kind of actions you can take to successfully deal with failure or even turn it into a big win.

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So let’s get started.

Hope for the best, prepare for the worst

1. Make sure you properly prepare for a potential failure

Before we even start talking about how to deal with failure, make sure you properly prepare for the worst-case scenario.

You know the saying hope for the best, prepare for the worst. It took me several failures to start taking this saying seriously (you can read more about all my past big failures and what I’ve learned from them here).

To make myself clear, preparing for the worst when you take a risk is not about catastrophizing the potential risks, convincing yourself not to act at all or dwelling on negative thinking.

It’s about protecting your downside. It’s about making sure you take a smart risk and that it won’t take you a decade to crawl out of the mess left behind an unexpected failure.

There are two things you can do to properly prepare for a failure before you act.

1.1. Smart risks are the best protection from a big failure

There are three potential types of risks to take or moves to make – (1) stupid decisions, (2) “big risk, big reward, (3) smart risks.

The first type of risk is making a stupid decision. Making a stupid decision equals taking a risk with a small potential reward, very short period of enjoyment or extremely low chances of winning, and a big downside. Big risk, small reward.

Examples of stupid decisions and stupid risks:

  • Marrying a person or going into a business with them before you know them well.
  • Taking on huge debt to buy a car or a house you can’t afford.
  • Playing the lottery.
  • Lifting too heavy weights to impress your buddies.
  • Cheating on exams, eating too much sugar etc.

The second type of risks is the most popular one. Big risk, big reward. People assume that you must take big risks for big potential gain. I was one of the people who believed that.

Then you put everything on a dice, and when the wrong number shows up, you lose everything. Big risk by default means you will probably lose.

There’s a pretty big chance you will be the loser in the game. Why would you do that to yourself?

Examples of “no pain, no gain” decisions:

  • Borrowing money to start your own business, because you think you have a good idea.
  • Making an investment you don’t really understand.
  • Starting a new diet without proper knowledge and supervision.
  • Overtraining your body in the gym, because you want quick gains.
  • Changing your job without doing a proper background check on the new company.

Then there is the third type of risk, which I had no idea about until I started reading about value investing. I call them smart risks. These are the risks where the downside is quite small, completely manageable, and the upside potential is enormous.

These are the risks where you don’t lose much if you fail, but if you win, you win big. The only problem with such opportunities is that they are very rare.

You have to systematically seek and patiently investigate every opportunity until the right one comes up – an opportunity where you can take a smart risk.

We could say that success is not only going from failure to failure until you reach the top, but also passing an opportunity after opportunity until the right one comes up. You must be smart enough to be in a position where risks are manageable and rewards are huge.

Examples of smart risks:

  • Having a few real potential customers before you even officially start a business.
  • Developing skills in high demand and rare supply, so you can get a job basically everywhere.
  • Hiring the best personal trainer you can still financially afford to prepare an exercise and diet plan for you, and then following it consistently.
  • Diving deep in one type of an investment, understanding it better than the vast majority of people, waiting for the right timing and then making a move.

If you take a smart risk, the potential failure is much more manageable and you don’t start drowning in a lack of resources. If you risk everything, it might take you years or even decades to get back in the game.

Many people get so emotionally stricken that they stay in their comfort zone forever after a big failure; or it might take you years before you fix your financial situation. Thus, before taking a risk, answer two simple questions:

  • What could go right?
  • What could go wrong? Are the risks manageable, and what are my moves in case of failure?

When you answer the second question, make sure you have a pretty clear picture in your head.

  • How much money are you prepared to lose? How much time?
  • What kind of safety nets do you have installed?
  • What kind of options do you have if things don’t go right?
  • How big will be your regrets if you don’t take the risk?
  • What damage will be done to your relationships, health and so on in case of failure?

Don’t get me wrong. Many times, not acting or doing at least something with your life is the biggest risk you can take. You must be bold, proactive and goal-oriented.

You must make moves in life, be it starting your own business, initiating a relationship, switching a career, and so on. But that doesn’t mean you must make unwise decisions and uncalculated risks. You must be smart in decision‑making.

If we go to my example, before going full-time blogging I calculated my risks:

  • I can do 12 months of full‑time blogging without any income.
  • After that I can do 12 months working 3 days a week on building up my blog and 2 days doing consulting work (but I hoped to learn how to make money blogging in the first year).
  • That gives me 2 years to make a living with blogging, otherwise it must become a hobby.
  • If I completely fail, I will go back to the consulting business (I already have a few potential clients) or I have several companies where I can immediately get a job.
  • If I hadn’t taken this risk, I definitely would have regretted it for the rest of my life.

1.2. Plan the search mode and the learning period

Even if you patiently wait for the right opportunity, an opportunity with a small risk and big potential reward, it’s still wise to plan a learning period.

Unfortunately, the markets have become extremely volatile, complex and crowded, and thus it's really hard to hit the spot the first time. That means you can rarely succeed without a proper learning phase. You must experiment with what works and what doesn’t.

I call it the search mode, a consciously planned phase with the pure purpose of (validated) learning about yourself, others, and the markets.

After seeing thousands of people starting a new business, switching a career, deciding to take better care of their health, finding their dream partner and so on, I reckoned it usually takes 1 – 3 years of searching before you find your fit.

Some people reach success in a month, others after a decade, but on average be prepared to spend 1 – 3 years on validated learning. That’s not a short period of time and must be calculated in your downside.

Examples of validated learning in the search mode are:

  • Adjusting your initial business idea to what customers really want
  • Going through a few breakups to learn what you really want in your partner
  • Switching between a few jobs to find what kind of work you are really good at
  • Making a few small bad investments to learn and understand the investing rules
  • Going through conscious incompetence when learning a new skill

In other words, the search mode are small “failures” from which you learn until you find your way to success. But because failing is emotionally hard, you consciously focus on validated learning.

Thus, you don’t even fail, but rather learn what works and what doesn’t.

Writing down what you’ve learned, planning new “experiments” and seeing some progress even if things are emotionally painful are the drivers that get you through the learning phase. In the search mode you can’t fail, you only learn. That’s the point.

In my case, I planned the following learning curve:

  • 3 months to orientate myself in blogging and making money with a blog
  • 6 – 9 months to learn how to grow my audience, build up SEO, design, writing and other skills
  • 3 months to launch my first product

What I miscalculated in the learning curve is that growing and monetizing the audience are two completely different skills. That means my traffic is growing nicely, but I have no idea yet how to properly do a product launch online.

And I must not forget that writing in English and speaking in English engage different parts of the brain, so I shouldn’t neglect speaking practice, since every decent online course is based on video.

That means you can plan part of the learning curve and which things you have to learn in the search mode, but there will be adjustments on the road. Usually you have to mind the Pi-rule. The Pi-rule says everything takes 3.14-times more resources (time, money) than expected.

To quit or not to quit

2. Should you persist or let go when a failure occurs?

Now forget about the risks, rewards and validated learning, and let’s say you just failed hard. The first question that usually crosses everyone’s mind is: “Should I persist or let go?”.

A failure is always emotionally and rationally a very demanding position. You must manage the overflow of emotions and forge your next move at the same time. That can lead to confusion.

For example, you might be disappointed and tired, but also asking yourself whether success is just around the corner. Or you might not even see the light at the end of the tunnel, but you’re still in love with your initial idea.

There’s usually a mixture of negative emotions (shock, denial, anger, sadness etc.) and sort of positive emotions of strategizing what to do next, how to turn a failure into a win, and so on.

Actually, there is a simple way of determining if you should persist or let go. You only have to answer two questions or let's say realistically assess two things:

  1. Your resources
  2. The potential experiments you can still make

2.1. The resources left

A failure is almost always connected with a loss of resources. But if you’re completely out of resources, going through failure is much tougher; and to persist at something is an even greater challenge.

That’s why you want to take smart risks and at least have some safety nets. If you run out of money, it’s over. If you run out of time, it’s over.

So, the first assessment you have to make is how deep in the hole you are. There are five main reasons why you might quit when you find yourself too deep in the dip:

  1. You run out of time
  2. You run out of money
  3. You get too scared to persist because of failure
  4. You’re not serious about continuing
  5. You lose interest and passion (that might be connected to cognitive distortions, as we’ll see)

If you’re out of resources (financial, time-wise or emotional), your options are quite limited. Don’t count on fast turnarounds, miraculous solutions or getting yourself out of the hole overnight.

With failure, you may have lost only a battle not the whole war, but in your new plan, you must calculate how you will build up the resources to continue the path. Building up resources to simultaneously invest them in a partly failed project is a tough position to be in.

You can never earn money as fast as you can invest it into your endeavors. That means you must put strict limits on your investments, and take into consideration that your progress will slow down.

2.2. The experiments left

The second, even more important, assessment is your progress plan. Do you know exactly what else you must learn to ensure progress, or do you have no idea for what to do next?

The theoretical formula for when to quit is the following: You should quit when every experiment you make leads to zero progress. You reached the local maximum and that maximum is not a sustainable position.

So ask yourself: can you build a sustainable position around taking additional risk and have very good idea how?

Based on your plan and remaining resources, make a simple calculation based on the following question. Did the last 5 experiments lead you to any progress and how many experiments can you still afford to do with the resources left?

That should give you a clear answer on whether to persist or quit.

Resources – Still left Resources – Out of

Experiments – Still left

Continue

Hustle for a while

Experiments – Out of Quit

Quit

If you failed, but you still have resources and ideas, go on, but proceed with caution. Fail faster, but with small failures that don’t drain you out. Learn faster, with proper resource management.As you can see in the table above, there are four situations you can find yourself in. If you’re out of resources and experiment ideas, quit. If you’re left with resources, but out of experiment ideas, you’re in an even better position. Quit and move onto something better.

And then there’s the fourth position. The toughest one – being out of resources and still having experiment ideas. And usually that’s the most frequent position that risk takers find themselves in, especially the ones without wealthy families. :)

In such a case I would suggest you go on, but in a really smart, rational and scientific way. You need to put some limits to how long you will persist, how much more you will invest and, most importantly, how you will measure real progress.

You have to make sure you don’t become a zombie, running in the same place on a hamster wheel. Again, you must see real progress by persisting on the same path. Examples of questions that show progress:

  • Business: Are you getting new customers?
  • Career: Are you getting recognition, satisfaction from work or a raise?
  • Relationships: Do you see any behavioral changes in your relationship?
  • Health: Do you feel improvements in your energy levels?

If after a few experiments you don’t see progress, and you’re running completely out of resources, you will probably burn out sooner or later. So back off before that happens and regroup for another opportunity.

Success stories of people who persisted for decades until they succeeded are nice, but most people burn out in 3 to 5 years. The success stories are rare exceptions.

You need to be very serious and realistic about how long to persist, and you should manage your resources and experiments extremely wisely.

If we look at my example (I have a very detailed plan, but these are the main points from it):

  • I have many ideas for experiments to make for a proper product launch. I have three info products in mind with different launch formulas that I can try.
  • I can’t afford to do full-time blogging anymore, but I can dedicate 2 – 3 days per week to the blog and 2 – 3 days to consulting work on the market.
  • I have until the end of the year and three products to build. If that doesn’t work out, my blog will become a hobby and I will find something else to build a business around.
  • I get a lot of positive feedback on my blog posts by readers and my blog won a several different awards, like the recent one Feedspot Top 100 Life Blogs. It's not the same validation as selling products (which leads to the next important point), but definitely a good sign to continue with my work.

2.1. Is it a hobby or a serious business?

One big emotional confusion that frequently happens in failure (especially in business) is the following – you love what you do and you want to continue doing that awesome thing, even if there is no real progress.

You want to do it out of pure enjoyment. You have a romantic view of your business, but markets aren’t giving you the feedback you want. Unfortunately markets always win.

In business, entrepreneurship and career, you seek progress. Actual, measurable progress. In business progress means money. No money, no created value. If you can’t make money out of it, make it your hobby.

Just find something else with which you can make money and enjoy it at the same time. If you really love doing something, and markets aren’t willing to reward you for it, it’s a hobby, not a business. You can still do it, but you’ll be frustrated in hopes that markets will change.

  • Should you only think about the money? No, you can find the best paid job for something you still enjoy doing.
  • Should you not worry about money at all? No, because if you’re not making money in business, you’re not creating any real value.

It’s completely okay to have hobbies (things you enjoy and bring you no money) and something else which you enjoy a little bit less, are still good at, but bring you decent earnings.

It’s great to find the one single thing that you love doing, are great at and get paid for, but you shouldn’t have an overly romantic view of that. That rarely happens. Other people will not pay you for surfing exotic oceans.

Emotional pain because of failure

3. The emotional side of failure

Emotions are the ones most heavily affected by failure. Failing is hard, and that’s the one thing we all need to admit to ourselves. We all take failing to heart.

It’s true that some people are emotionally better equipped to deal with failure than others, but it causes damage to all of us.  Going through failure is definitely easier if you have strong trust in yourself and the world, and if you had an upbringing where failure was nothing bad.

But it still takes its emotional toll. Only suppressing negative feelings sooner or later backfires and results in bitterness, anger and depression. The point is, you must let yourself emotionally process the failure.

There are a few things you can do to heal faster after the failure:

  1. Even if it makes sense to take immediate action, take the time to grieve. Practice self‑mothering.
  2. Make sure you don’t run back to the situation you were in before taking risk.
  3. Don’t see things better than they actually are.
  4. Reinforce the strong why and use success mantras.
  5. Practice constant reassurance, find early wins and reward yourself.

The first important fact when it comes to emotionally dealing with failure is that it takes some time to heal. You go through phases of disappointment, denial, anger, depression, bargaining and acceptance based on the Kubler-Ross grief cycle.

Kubler Ross Change Curve

Remember, going through failure is a process, not a one-time event. That means there will be ups and downs, and it will take you time to heal. Usually it takes from one to several months to deal with the grief of failure.

Taking the time to heal also means that you must be gentle towards yourself. It’s called self‑mothering, no matter how funny it sounds. You failed, and that’s hard enough.

You don’t have to be tough on yourself why you let that happen, why you couldn’t have played your cards smarter, and so on. Show yourself some compassion, understanding, and gentle treatment. For your own sake and to speed up the emotional recovery process.

Then, your emotional side will instinctively want to go back to the situation before failure. You get scared, and you want to go to something safe. And there is no safer zone than the situation you were in before taking the risk.

But many times, that’s not a good move, otherwise there would have been no need for change in the first place. You took a risk to find a better position for yourself.

It’s your job to find it even after the failure. The new position might be somehow related to your previous life, just don’t get yourself into the exact same position you were in before the failure.

The next important lesson is that you shouldn’t idealize your situation. To protect yourself, you often see your situation better than it actually is. That most often leads to not acting at all and it’s one of the worst mistakes you can do in failure.

Sometimes problems do solve themselves, but that’s rarely the case. In failure, your job is most often to dig yourself out of the hole, and that requires smart acting. And for smart acting, you need a very realistic assessment of your situation.

To persist through any failure, you need a strong emotional why. You must feel that your mission is much greater than any obstacle on your way. You must have a clear vision of what kind of a legacy you plan to leave behind and why you want to fight.

An emotionally empowered vision and mission are the fuel on the bumpy road to success. If you decide to persist, find the emotional why. Success mantras like “follow the process”, “do your work, don’t be stupid” and “it’s not time to give up” can be of great help.

Besides an emotionally empowered vision, your emotions need reassurance that you’re doing the right thing. That’s why you need some kind of early wins after a failure.

That’s why it makes sense to persist only if the next few experiments show progress towards your vision. When they do, make sure that you reward yourself. Celebrate every small win after the failure, because that’s the best reassurance for your emotional side.

In my case, it took me more than a month to get over the failure. I was daydreaming about how much better my position was before, and so on. When my emotions stabilized with proper self-care, I was able to make a sound plan for what to do next.

Analysis paralysis

4. The rational side of failure

Your rational side (your mind) is as negatively affected by failure as your emotional side is. That means you must even more properly manage your mind when the hard times hit.

There are a few small things you can do that will have a great impact on you dealing with failure successfully.

  1. Properly manage your cognitive distortions
  2. Carefully analyze what you have learned
  3. Script your next moves

When you find yourself in failure, cognitive emotions tend to pile up. You might swing from “it’s not that bad” to catastrophizing your situation.

Your mind turns into a drunken monkey that goes crazy without any real orientation or realistic view of the situation. The most common cognitive distortions in the act of failure are:

  • Catastrophizing: You picture your failure much darker than it really is, usually from the point of social pressure, namely how people will laugh at you, leave you, and you will stay forever alone and abandoned.
  • All-or-nothing thinking: Your idea, job, business or relationship was everything before failure, and now it’s nothing. The situation goes from 100% to 0%. But there is no such thing as 100% failure.
  • Mental filtering: You only see the failure, but you don’t see any bright spots, what you’ve learned, and all the moves you can make.
  • Should statements and self-labeling: Let’s not forget about all the statements on what you should do, even though it’s easy to be a general after the battle, and all the self-labeling of what kind of a loser you are, and so on.

Your job is to manage cognitive distortions with emotional accounting and see the situation as realistically as possible.

You must know your losses and exposures to damage very well, but you should also be aware of the bright spots, your next moves and things that you’ve really learned from failure. While doing that, don’t forget to give yourself a pep talk and encouragement to act.

The next thing to do is to carefully analyze what you have learned. Learning can be a quick and cheap excuse for failure. Oh, I failed, but I learned so much. That’s nonsense.

You must know exactly and very precisely what you have learned (it’s called validated learning) and it should give you a clear direction for what you next move should be.

So, your job is to list everything you really learned about yourself, others, markets and the world – what doesn’t work for you, but also what might.

The last problem to deal with on the rational level is analysis paralysis. Your mind loves to drown in self-pity, dwell on how unfair life is and feel sorry for itself.

The only way to get yourself out of the mental paralysis is a clearly written action plan for what your next few moves will be. When you set a carefully orchestrated process to follow, there’s nothing your mind can get stuck on.

Remember, you aren’t stuck, you’re only spending your precious time, energy and other resources wrong.

In my case, that’s what happened on the rational level:

  • My cognitive distortions piled up. Before, blogging was everything, the most awesome thing for me. And then nothing. I didn’t see any positive in the situation.
  • I carefully analyzed what I learned based on the feedback. Proper product launch formula, more free video materials, start with smaller products, you must have a live presence, smile more, and so on. I have a few pages of feedback on my failed product launch.
  • I have a very clear plan for what I’ll do next. 2 – 3 days dedicated to the blog. I’ll start doing unscalable work – consulting to see where the demand is the greatest. Then I’ll build a product around that, and in the meantime learn all about proper online product launch and improve my spoken English.

How to deal with failure

5. So how to deal with failure? Sit down, prepare a proper plan and act immediately

In failure, the sooner you act, the sooner you can get yourself into a better position. Nevertheless, you need a smart plan and you need to take enough time to emotionally process the failure.

Failing is hard, but now you have a very precise formula for dealing with failure and hopefully even turning it into a winning situation.

In summary, here’s a simple step-by-step formula for how to deal with failure:

  1. Act immediately, don't wait for things to sort out themselves, and don't be naïve.
  2. Manage your cognitive distortions and make sure you see reality as clearly as possible, including the bright spots.
  3. Assess your remaining resources – time (in weeks), money (in dollars), emotional enthusiasm (on a 1 to 10 scale).
  4. List all the potential experiments you can make, based on your past validated learning.
  5. Draw a clear limit on how many experiments you can still make with the resources left.
  6. If you love to do something but there is no progress, make it your hobby and reinvest your resources.
  7. Don't instinctively run to the position from before you took a risk, search for a better position than the one you were in before failure, at least in some ways.
  8. Take some time to emotionally process the failure and be gentle towards yourself through the times of failure.

If you decide to persist:

  1. Write down your mission statement and why you will persist.
  2. Analyze what you have really learned from failure – what works and what doesn't.
  3. Carefully script your next moves – what they will be and how much resources they will take.
  4. Make sure the next few experiments lead to visible and measurable progress.
  5. Celebrate every small win and reward yourself.
  6. If there is no progress with the next few experiments, consider quitting. Don't be a zombie.
  7. Good luck!

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