June 10, 2025
Do you ever wonder how some people bounce back stronger after setbacks while others stay down?
They’re able to turn it around because they don’t let an apparent loss go without learning from it and applying the lessons to their future decisions.
Failures can be embarrassing, and most people want to bury those kind of stories. But if you’re not learning from your losses, you’re leaving value on the table.
This isn’t just motivational fluff. It’s backed by research. Studies from Harvard Business School and Columbia both show learning from failure allows leaders to solve future problems faster, improve their leadership skills, and build more innovative companies.
Let’s be clear:
It’s better to win than lose. Every time.
But when you lose, make it count.
Here are 10 things entrepreneurs can take from a setback if they have the right mindset:
1. Clearer Goals and Refined Strategies
After a loss, it’s might be easy to say you didn’t perform as well as you should’ve. That may be true, but you also may have been chasing the wrong objective.
Take the lessons from a campaign that fell short, a missed launch date, or sales that came in under expectations to refine your objectives and your plans.
Each failure holds data. You’d be foolish not to use it.
Ask:
- What were we actually trying to achieve? Is that the right goal?
- Which assumption did we get wrong?
- What would we never do again?
Refinement beats reinvention. Now document your insights!
2. New perspectives and increased creativity
The comfort zone rarely fosters disruptive creativity.
Tons of research has shown people in good moods are creative. It makes me think of all of the ping-pong tables, endless snacks, and entertainment littering the offices of software companies. But it’s not the whole story. The Academy of Management Journal published research showing creativity pops when people get into those good moods after facing challenges.
People benefit from the struggle, the pain and the friction because it forces them to think differently and look at challenges from different angles. Often, constraints don’t feel great, but they inspire innovation.
When you fail, you have no choice but to get scrappy if you’re really committed to your goals. That’s often where breakthroughs are born.
3. Enhanced adaptability and resilience
Resilience is like a muscle. It grows when it gets stressed.
Entrepreneurs who’ve weathered losses learn to adapt faster and better. Setbacks don’t induce immediate panic, ambiguity doesn’t derail progress, and stress becomes more tolerable when you’ve faced it before.
Diane Coutu’s article “How Resilience Works,” outlines three traits that resilient leaders have, and we all could benefit from developing. First is an acceptance of reality as it is instead of what we’d like it to be. Sugarcoating challenges or denying facts won’t build resilience. Facing difficult circumstances will.
Second, they put perspective around their struggles and believe their goals have deep meaning. Even if you suffer a setback, you are more likely to overcome it if you believe a positive outcome will deliver a triumph bigger than yourself.
Finally, she points out resilient people improvise. They understand things will not always go as planned and can adapt to changing conditions. This reminds me of the saying “change is the only constant.” If we anticipate things will not go as planned, we won’t get so discouraged when forces push us off the path.
We can also draw inspiration from Bruce Lee here and “be water” to emphasize and prioritize being dynamic and flexible to meet challenges as circumstances change.
If you don’t come back from a setback, you guarantee it’ll be the end. You can build a comeback if you get up and keep trying.
4. Develop deep self awareness and humility
There’s nothing like a loss to give you an opportunity to look in the mirror.
What did you ignore? Who did you fail to listen to? Where did your ego get in the way?
Entrepreneurs often get tunnel vision, but failure has a way of taking off the blinders and pushing you to check your blind spots. Refusal to do so comes with a price. A Korn Ferry study showed companies with poor performance were 79% more likely to have low scores in self-awareness.
The moment you don’t get an outcome you like is an opportunity to develop more knowledge about your current skills, assess your true capabilities (as they sit at that moment), and where you skills need to be for a better outcome next time. Don’t waste the chance.
Know yourself.
5. Improve decision-making skills
Every failure is a puzzle to solve, and that’s a gift.
In fact, if you take the time to diagnose what happened and how you could respond the next time you face a challenge, you’re 23% more likely to improve your decision making skills than if you just keep trying over and over again.
Now think about the compounding affects throughout your career. The more complex problems you face, the bigger your mental database becomes. Over time, you make faster, more confident decisions. You start recognizing patterns. So work on hard problems, but take the time to learn from the failures.
That wrong turn today might save you three steps tomorrow.
6. Keep Relationships
Sometimes you don’t land the client, secure the contract, or win the proposal because of timing and relationships, not because you produced poor work. Right or wrong, relationships can trump performance sometimes.
For example, in large enterprises and government contracting the purchasing manager will often get a vendor to help write the RFP for a project. Unsurprisingly, if you’re writing the RFP, you have the inside track to win the business.
If you didn’t write it, but you still have a strong proposal and quality work, you may catch the eye of the procurement manager. From there you can build a relationship for another opportunity down the road.
7. You get a story
Fun fact: Kryptonite didn’t appear in Superman comics until issue #61. Before that, he was just really strong, could fly, and was utterly invincible. And the writers and fans started to get bored. Kryptonite provided a way for regular people to relate to the superhuman.
Dorothy Woolfolk, an early editor of the Superman comics, pushed to introduce the weakness.
People love hearing about how others overcame setbacks. Use your struggles, learn from them, and share how you did it to create deeper bonds with your network. People love connecting through stories.
8. Motivational boost
There’s something clarifying about failure. It puts the stakes in front of you, makes you hungry, and lights a fire under you. I should say, it can motivate you. Some people let failure freeze them and they get crushed. You’ll come out better if you can turn it into focus.
Ask yourself, when do you (or your team) have a fragile mindset? When is it anti-fragile? If you can develop the awareness to see potential failures on the horizon and become anti-fragile more often, you will reap huge rewards.
This is fascinating. On average, scientists who barely missed out on NIH grants early in their careers go on to outperform those who just barely won those grants.
If you still want it after a gut punch, that’s a sign you’re in the right fight.
9. Expand your skill set
Loss often exposes what you don’t know. Pay attention and keep investing in developing yourself. Maybe you realize you need better leadership, project management , financial modeling, negotiation, or other training. Whatever skills need work.
This is an invitation to level up.
And there’s incentive to accept the invitation. As the world continues to evolve, it will reward people who can upskill with it, as demonstrated in this report by the World Economic Forum.
The best founders are permanent students.
10. Improved emotional intelligence
Hard lessons have a way of rewiring how you show up. You become less reactive, learn to regulate your own stress, and gain awareness about the people around you.
That’s emotional intelligence. It matters and isn’t just woo woo nonsense, which is a popular belief. This study in the Journal of Medical Science and Research shows nearly 44% of people do not believe their emotions affect their performance, but it goes on to prove the skeptics wrong. Harvard agrees, showing 90% of top performers have high EQ. Emotional intelligence does lead to better performance at the individual and organizational level.
Every failed pitch, bad hire, or misstep helps build your emotional intelligence if you reflect on it.
It’s not win/lose. It’s win/learn
Setbacks are unavoidable, but you can decide whether they’re valuable or a waste.
The next time something goes wrong, take a moment before you throw it in the loss column. Ask yourself a few questions:
What’s the lesson here? What can I improve for next time? Who can I become because of this?
Loss isn’t the opposite of success. It’s part of it.
And if you treat each loss like a classroom, you’ll put more checks in the win column.