FailCon

A coming-out party for business failures

October 21, 2013: 11:00 AM ET

FailCon hosts conferences all over the world that draw entrepreneurs hoping to learn lessons and avoid mistakes when they launch startups.

By Vickie Elmer

Business Closed Sign

FORTUNE -- Get comfortable with your big failure -- and if you're a startup or an investor, someday you may be offered the opportunity to describe your defeat to hundreds of your peers.

That's what's will happen on Monday at the fifth FailCon conference in San Francisco -- and at a growing number of spinoff failure sessions from Sydney to Singapore to Spain.

Failure is coming out of the closet -- and not just in Silicon Valley. "It is becoming less taboo. More people are talking" about failure, says FailCon co-founder Diane Loviglio, whose first startup failed after four years. "We're finally able to talk about this in Mexico and Europe."

Loviglio and her business partner are eager to create a place where failures can be shared, learned from, and even serve as encouragement to others. "There's just a lot of energy" at the conferences, says Loviglio. "They feel inspired and empowered."

The one-day failure conferences draw mostly entrepreneurs, along with a smattering of students, consultants, and corporate types -- some of whom are hoping to learn lessons and avoid mistakes when they launch their own startups.

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So far, FailCon events have been held in 10 cities, each by locals. About 15 other groups are planning FailCon meetings, says Cassandra Phillipps, FailCon co-founder and executive producer. The regional event planners operate as licensees, the same way TedX relates to the TED conference system. "The local producers can take some control of it and give it a flair of their own personality and local culture," Phillipps says.

Next year, FailCon will land in India, and after that, it will go to Johannesburg, Tel Aviv, and Tokyo. The conferences have landed some major sponsors, including Microsoft (MSFT), Amazon Web Services (AMZN), and Dice, the technology jobs site.

Success has encouraged some imitators too. A technology council in Baltimore produced one such imitation last year, and another called The Advantages of Failure was held in Madrid in 2011. They also must compete with an array of startup and business seminars, most of which focus on learning from successes.

FailCon claims to be the first business conference centered on failure, and it debuted in 2009, a year after Lehman Bros. collapsed and the year both Chrysler and General Motors filed for Chapter 11 bankruptcy. It seemed a great time to talk about failure, yet Loviglio recalls, "We were a little nervous we wouldn't sell out." They did, and did again with more than 450 people a year paying around $219 apiece to share their setbacks, mistakes, and all-out disasters with others.

"At other places and conferences, people only share what worked," Loviglio says. "Here they say 'We totally screwed up on hiring.' You feel good knowing that other people don't have the answers either."

FailCon responds to a global desire to learn how to best respond to business failure. "To create a truly healthy startup ecosystem, you have to first have an environment that is comfortable with its entrepreneurs taking risks and failure," says Phillipps. "Internationally, this is really lacking. A FailCon event gives innovators in these cities a safe place to talk about their failures and struggles."

FailCon founders

FailCon co-founders Cassandra Phillipps and Diane Loviglio

Across the U.S., business failure has become more common since the recession of 2008, with the number of "business deaths" each quarter up 40% from 1994 to 2009, according to the Bureau of Labor Statistics.

FailCon's cofounders work part-time along with a half dozen others who help produce the San Francisco and international conferences. Loviglio also is co-founder of a startup called Share Some Style, which offers its users online and in-person style and personal shopping advice. Phillipps works as a game designer and says that she grew interested in failure when her only startup headed south.

"I just felt so lost and confused as to what wasn't working and what I was supposed to be doing," Phillipps says. "But everywhere I went, I had to pretend to be awesome, and moving ahead, and doing great. I knew my startup was failing and just felt like I had no resources or places to go -- this was in 2008, 2009."

As FailCon grows, it raises the question: How different are perceptions of business failure in different countries and continents?

One answer came from Liam Boogar at a FailCon panel in Switzerland. Boogar is originally from Silicon Valley and in 2011 co-founded Rude Baguette, a site that covers French startups. "I see no difference between a French entrepreneur and a Swedish entrepreneur and an American entrepreneur," he said on a FailCon video. "The difference is what we talk about and what we choose to project, vs. what we actually feel. You don't talk about your weaknesses, like your fear of failure."

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Phillipps says, "I actually think failure ... is not taboo in the Bay Area, but being in the midst of a failure still is. It's worse around the world -- many cultures see a failed idea or business as a failed human being."

Five years of failure conferences have yielded a lot of stories, lessons, and plenty of open-ended debates. Some are documented in videos; others are firmly rooted in FailCon participants' minds. For instance, Loviglio says that there's no one answer to the debate over whether to start a business with a clear business model vs. just going out and getting customers. "You can't control everything," she says. Timing and luck are just as important as anything else.

FailCon is ultimately about acknowledging the usefulness of failure. "People who failed at something often seem more confident about it in the future -- not immediately, but in time, once they have processed the failure," Phillipps says. "They move forward with more information and often say that, without that failure, they would not have been able to succeed."

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