Embracing failure can be a first step to success, says entrepreneur James Sackl sharing the ups and downs of his experiences.

Many very successful entrepreneurs today, faced major setbacks and failures before they got to where they are. Is this truly a crucial part of the journey?

Getting through a setback isn’t too difficult, it’s ultimately not a crushing experience for most people. You live and learn, and the experience just makes you stronger and wiser.

You've started a lot of businesses, what would you say has been your strike rate of successes versus failures?

That’s a tough question to answer, but a rough gauge would be about a strike rate of about 40 per cent currently. I have had success with Young Media, and a few other businesses, and property developments.

Generally, if a person is being aggressive and ambitious, is a one out of two success rate pretty good?

I think if you're prepared to make hard decisions, and some cost cutting when necessary, you’ll be in a good position to generate revenue. It’s also possible to succeed at a much smaller scale, rather than trying to go too big too soon. That's when people get themselves in trouble, over extending, or being a little bit overzealous with your appetite. Entrepreneurs are probably more risk centric than most so maybe a one to two strike rate is a reasonable outcome.

What are some common reasons that people fail in a business?

Over-extension, or betting the wrong way on customer adoption or customer retention. Another possible pitfall is taking a long-term view rather than a short-term view in making your business decisions. For instance, you offer long term contracts when employing staff to deliver short-term contracts. It's the commitment over an extended period that could cause problems.

Having the right attitude plays a part as well. I've seen a lot of people get complacent when they've achieved a certain level of success. This makes you lose your drive and direction - the killer instinct that is vital to an entrepreneur. That will cause you to miss opportunities as you’re not ready to strike. Also, taxes are another reason people fail in business. This must be accounted for as well.

What was the most important thing you learned from failing in a business?

You must have the ‘killer instinct’ in you constantly. You must look for opportunities and not let anything slide. It is when people lose sight of this, and the complacency, that leads to their downfall. So, the fire from within must be there, constantly, seeking opportunities.

How do you keep that fire? Sometimes, you're working so hard, you're doing everything right, and then you get a customer who just throws you off track. How do you keep yourself in check at that point?

In many ways, it's being a pessimist, as much as I am an optimist myself. You must ask yourself: What could go wrong and what can I do if it did go wrong? It's a very difficult thing for me because, naturally, I'm inclined to see things with a glass half full, even when it's empty. You have to be resilient and innovative, and find ways to get press coverage or how you’re going to draw customers. You have to ‘scare’ yourself to make sure you succeed - believe its a do or die situation, or be a ‘business hypochondriac’. This will keep you going and keep the fire within burning.

How have your experiences been beneficial to your growth as an entrepreneur and person?

For me, personally, you must cut through a lot of the niceties of starting a business and operating it. There's a lot of frills that you don't need and it's only after you fail, that you reflect and realise. For example, time wasted in meetings. If you’re in meetings where you haven’t said a word or taken notes after 20 minutes, it’s time to get up and leave. You must value your time and what you’re getting out of it.

Also, things that may have seemed stressful previously become less stressful because you have done it before. When you're starting a business for the first time, it can be very daunting. That's probably why a lot of people don't start businesses and stay in their comfort zone. But, when venturing into a business the second time around, it is less stressful as you know what to do, who to turn to or speak to - and that takes away much of the stress.

In general, starting a business takes a lot of guts. The deeper you are into it, you understand and realise your limitations. That is where the stress comes from the second time around and beyond.

One of the hardest things to do is to keep going when you’ve faced a major setback. How can someone find the courage to keep going and stay inspired? How did you do it?

A very good strategy is to have nothing to fall back on. Even if that's artificial, as in you create that situation for yourself. Imagine what the worst case scenario would be if you failed. You must give yourself no option, no way out, and you have to be very hard on yourself. When you have nothing to fall back on, you know you must keep going.

Running a business is not always a pleasant experience, even if you’re successful. It can be a very gruelling experience and is just a matter of how much resilience and tolerance you have to be in a difficult spot. It boils down to how quickly you can make things better for yourself.

Having nothing to fall back on is the driver. This explains why people who are employed in large organisations stay where they are rather than venture out to start something up on their own. Fear keeps them where they are, because if they were to leave their job, they have nothing to fall back on.

Have you experienced a setback that later became a success?

Yes, I have. When we first designed our COVID diagnostic pen and launched it following approvals from the TGA, there was no interest in it - locally and overseas. After all that we had invested in it, both in time and money, nothing came out of it and it was a major setback. Then, overnight, it just took off, when we received a call from the government on a Sunday morning enquiring about our supply capacity. Getting a call from a government representative on a weekend meant we were on to something big. Just as with many businesses, COVID triggered our success.

Our success was because we jumped in at the right moment when the pandemic started. We got the rights to the antibody cassette in January or February 2020 and had sole distribution rights for in Canada and a few other countries.

No one wanted these pens, but as soon as the COVID announcements were made, sales picked up.

How did you get into the diagnostic pen? Did you just see COVID coming and heard about an opportunity both to potentially do some good but also to get a business going?

We were lucky to have information about the lockdown in China before it hit the rest of the world. It’s not often you hear about cities being locked down. We had the right connections too, and this came from a former nanny who worked for us. Her husband worked for a medical manufacturer creating a COVID-19 antibody product to see if it could pick up an infection.

This came on the back of three failed ventures and was disappointing that no one wanted the pens at first. As COVID-19 hit every corner of the globe, our pens became popular and we re-invested all the money we made back into the redesign of the antibody product.

What should a failed start-up founder do next?

Understanding why you failed is the most important thing and being honest with yourself about why you failed. You need to then assess whether you should venture into a business again. You need to ask yourself if you’ve identified why you went wrong previously, and not to just dive in but take a measured approach in your next business venture.

Many start-ups fail, so why should anyone risk starting one?

Because you can create a lot of value for people by launching something that doesn't exist currently. The goal of a start-up or any business is to be in the position of being a monopoly, as controversial as it sounds. When entering a highly competitive market, you need to have a product or service that differentiates you from your competitors.

What was your most valuable lesson from failure?

The challenges in the business led to some struggles personally within my family. Aside from that, it is important to manage stakeholder expectations, keep people as informed as you possibly can and be transparent.

The most valuable lesson learned is to never give up. You need to keep working on a solution because the longer you hold on, the better your chances of spotting an opportunity and seizing it. Too many people throw their arms up in the air and go out to drink or stick their head in the sand. You need grit and you must just get up and keep going, even through the hardest times.