Turning Business Setbacks into Breakthroughs: Lessons from Top Entrepreneurs
In the high-stakes environment of business, the narrative of success often dominates, leaving little room for the candid discussion of failure. However, according to business journalist Dougal Shaw, the reluctance to address setbacks is a significant hurdle that may be preventing British businesses from reaching their full potential.
At the SCALE EXPO & SUMMIT held on 22 April at the Business Design Centre, Shaw chaired a panel featuring experienced entrepreneurs to examine the reality of business setbacks and how they can be leveraged for growth. The participants included Steph Hind, co-founder of the employee wellbeing platform Heka; Gurinder Dhillon, founder and CEO of the electric vehicle leasing firm Auto Car; and serial entrepreneur and investor John Stapleton, known for founding the New Covent Garden Soup Company and Little Dish.
Lessons in Resilience
For Steph Hind, the challenge arrived shortly after closing her first investment round in late 2019. When the pandemic forced the closure of the physical gyms and studios that powered her platform, she faced the sudden collapse of her business model. Rather than succumbing to panic, she reframed the situation by asking what positive outcomes could emerge from the crisis. This led to a pivot toward a “whole-person” health model, which now supports approximately 25,000 experiences.
Gurinder Dhillon emphasized the necessity of recognising when a business model is no longer viable. After struggling to find profitability in his early food delivery venture, he transitioned into the black cab industry. When the arrival of Uber disrupted the market, he chose to sell his fleet rather than resist the change. This decision allowed him to rebuild with a focus on deep domain expertise, eventually becoming a major partner for the very company that had disrupted his previous model.
John Stapleton highlighted the importance of viewing failure as a precise teacher. After the collapse of his expansion into the American market, he experienced a period of introspection that ultimately provided the clarity needed to launch Little Dish. He suggests that while success is often difficult to analyse because it is hard to isolate the specific drivers, failure provides a clear view of exactly what went wrong.
Did You Know?
John Stapleton describes his career trajectory as a “s**t sandwich,” a term he uses to represent the sequence of a success, followed by a failure, and then a subsequent success.
Expert Insight:
The implications of this panel suggest that the most effective investors are moving away from purely success-oriented metrics. Instead, they are increasingly focused on a founder’s ability to demonstrate growth and integrity in the wake of a setback, viewing the individual’s evolution as a key indicator of future performance.
The Role of Investors
The panel agreed that investors are not necessarily deterred by failure, provided that the founder can demonstrate what was learned from the experience. A critical component of this is integrity; investors look for evidence that the entrepreneur managed their responsibilities to others even when the business was failing. Constructing a narrative that demonstrates this evolution is considered an essential skill for founders seeking future backing.
Looking Ahead
As the business community continues to grapple with the realities of scaling, the conversation around failure is expected to remain a focal point. Dougal Shaw is scheduled to host a dedicated SCALE Session on 2 June at the SCALE Hub, where he will further explore the themes of his book, Fail Smarter. This event will feature an entrepreneur from the book to provide firsthand insight into navigating the toughest moments of the startup journey.
Frequently Asked Questions
How did Heka pivot following the pandemic?
After the physical locations on their platform closed, Heka moved to a “whole-person” health model that now includes a wide range of services, such as financial learning and National Trust memberships.
Why does Gurinder Dhillon believe in “time in the market”?
He argues that deep domain expertise, gained through long-term experience in an industry, provides the competitive intelligence necessary to anticipate disruptions and make strategic moves before others.
What do investors look for when a founder has experienced a previous failure?
Investors want to understand what the founder learned, how they behaved during the crisis, and whether they treated those around them with integrity, such as ensuring debts were settled.
How has a past professional setback influenced the way you approach your current goals?