"The sting of failure is extremely motivating" — When Shark Tank investor Kevin O'Leary made a bold remark on why entrepreneurs must fail

Shark Tank investor Kevin O’Leary, known for his direct approach to business, highlighted the importance of failure in shaping successful entrepreneurs. During an interview at the New York Stock Exchange with TheStreet on March 22, 2024, O’Leary emphasized,

“The sting of failure is extremely motivating, and usually you've learned your lesson.”

He said this in response to a question about why failing at a business effort can be a valuable learning experience. The Shark Tank investor explained that failure provides lessons that entrepreneurs might not anticipate when they start.

---

Shark Tank Kevin O'Leary on why failure is essential for entrepreneurial success

Kevin O’Leary explained that failure helps entrepreneurs understand what they did not previously know. The Shark Tank investor stated,

“Most people don't know what they don't know, and they start out. So I always tell people, be an apprentice for a couple of years. If you love a sector, work for somebody in it and then break out on your own.”

He emphasized that initial failure can serve as a reality check, enabling business leaders to adjust their strategies based on real-world challenges. Kevin further noted that repeated failure does not necessarily discourage him from investing in someone.

“But if I meet somebody that's had two failures in a row, I have no trouble investing in them again because I've done that too,” he said.

According to O’Leary, perseverance is essential in entrepreneurship, and setbacks should not be seen as definitive failures but rather as learning opportunities.

---

Challenges in business growth and the reality of setbacks

O’Leary underscored the unpredictability of entrepreneurship, pointing out that success rarely happens in the first attempt. He remarked,

“I don't believe people can do it right out of the gate. It's very rare and it never happens quite that way. You may have a plan, but that doesn't mean you're not going to hit valleys and peaks.”

O'Leary highlighted the necessity of resilience in overcoming difficulties. The Shark Tank investor also acknowledged that adversity can shape business leaders.

“I just prefer people that have been — call it tempered by the extreme,” he said.

He explained that facing business struggles forces entrepreneurs to refine their decision-making processes and develop strategies that are more aligned with market realities. The pressure that comes with failure, in O’Leary’s view, is a crucial part of the learning process.

---

The need for adaptability in business leadership

O'Leary stressed that an entrepreneur's capacity to respond to evolving situations determines long-term success. He went on to illustrate that among the most serious business leaders' blunders is the failure to adapt when market conditions or industry directions change. In his view, not being adaptive can cause stagnation, keeping a business from moving ahead of its earlier development phases.

He also discussed the transition from small-scale success to large-scale operations, explaining that the ability to grow from five to fifty million in revenue is uncommon. According to Kevin, achieving an initial milestone demonstrates demand, but scaling beyond that point requires different skills.

When a business leader is unable to lead the company to the next level, O’Leary has had to make tough decisions.

“It's not a bad outcome for them. They're still a great founder. They will remain a shareholder, but they will stop trying to create value because they don't know how to get to the next level.”

---

Tune in to ABC on Fridays at 8 PM ET to watch Shark Tank, or stream episodes afterward on Hulu.