Founder:
Dr Malpani, I’ll be honest. This startup failing has hit me harder than I expected. I did everything right—or at least I thought I did. We worked hard, we were ethical, we cared about customers… and still, it didn’t work. It feels personal.
Dr Aniruddha Malpani:
I’m glad you said that out loud. Startup failure always feels personal, because you didn’t just build a product—you invested your identity, your ego, and your hopes into it. Let’s start by normalising that feeling. Feeling bad doesn’t mean you’re weak. It means you cared.
Founder:
But how do you deal with it? Everyone says, “failure is part of the journey,” but that sounds very wise only when it’s someone else’s failure.
Dr Malpani:
True. When it’s your own failure, philosophy feels like a luxury you can’t afford. But ironically, philosophy is exactly what helps you survive it. I like to remind founders of a very old idea—one that’s especially useful in startups.
There are three kinds of things in life:
- Things you can control
- Things you can’t control
- Things you can influence
Most founders mix these up—and that’s where the suffering comes from.
Founder:
Can you explain that in a startup context?
Dr Malpani:
Of course. You can control your effort, your integrity, how close you stay to customers, how frugally you operate, and how honestly you look at data.
What you can’t control are market timing, macroeconomic shocks, competitor behaviour, investor sentiment, regulatory changes, or plain bad luck. A good startup can still fail because reality didn’t cooperate.
And then there’s the third category—things you can influence. This is the most underrated one.
Founder:
What falls into that category?
Dr Malpani:
Your mindset. Your framing of the failure. Your peace of mind. Your ability to extract lessons instead of scars.
You can’t control whether this startup succeeded. But you can influence whether this failure makes you bitter—or smarter.
Founder:
That sounds nice, but it’s hard not to feel like I wasted years of my life.
Dr Malpani:
Let me be blunt—that’s the wrong frame. You didn’t waste years. You paid tuition. And unlike an MBA, this tuition actually taught you something real.
Here’s an uncomfortable truth: founders who succeed without failing early are often fragile. They don’t know why things work. They confuse luck with skill. Then, when reality finally punches them, they break.
You, on the other hand, have earned something far more valuable—judgment.
Founder:
Judgment?
Dr Malpani:
Yes. You now understand customers better. You’ve seen how cash flow lies. You know how hard distribution really is. You’ve learned that building something people say they want is very different from building something they’ll pay for.
This is exactly why, as an angel investor, I don’t back “idea people.” I back founders who have scars—but have learned from them.
Founder:
So you don’t see failure as a red flag?
Dr Malpani:
Not at all. Repeated failure without learning is a red flag. One thoughtful failure that leads to clarity is an asset.
What matters is this: can you explain why the startup failed without blaming the universe, your co-founder, investors, or customers?
If you can say, “Here’s what I misunderstood, here’s what I’d do differently, and here’s what I now know matters,” then you’re already ahead of 90% of founders.
Founder:
It still feels like the world is judging me.
Dr Malpani:
That’s your ego talking—and I say that kindly. The world is too busy to judge you for long. And the people who do judge you? They usually haven’t built anything themselves.
Serious builders respect other builders—even when they fail. Especially when they fail honestly.
Founder:
How do you personally bounce back from setbacks?
Dr Malpani:
By returning to first principles. I remind myself: my job is not to be right every time. My job is to compound learning over time.
That’s why I’m such a strong believer in frugal entrepreneurship and bootstrapping. When you build close to customers, keep costs low, and focus on real value creation, even failures are survivable. You live to fight another day.
A bloated, hype-driven startup collapses dramatically. A frugal one fails gracefully—and teaches you more.
Founder:
So what should I do next?
Dr Malpani:
First, protect your mental health. Failure doesn’t mean you are a failure.
Second, write down what you learned—brutally honestly. Not for LinkedIn. For yourself.
Third, resist the temptation to jump into the next idea just to escape the discomfort. Sit with it long enough to extract wisdom.
And finally, when you do start again, start smaller, closer to the customer, and with far more humility. That combination is deadly—in a good way.
Founder:
You make it sound like failure can actually be a competitive advantage.
Dr Malpani:
It is—if you process it well. Startups don’t reward optimism alone. They reward clarity, resilience, and the ability to separate what you can control from what you can’t.
Peace of mind is not a luxury for founders. It’s a strategic asset.