However, the fallout from business failure is occasionally brutal and usually damaging to the participants. Bank accounts lie empty, egos are bruised, anger flies thick and furious.

Take the crash and burn of Blognation — a UK-based blog network that has been praised by a set of luminaries, including Robert Scoble.

Started by Sam Sethi, who also ran the ill-fated TechCrunch UK, Blognation is now the subject of a blogging firestorm. There’s an open letter to Sethi by Oliver Starr on TechCrunch, while the author puts it up on StarrTrek, his personal vehicle. I won’t go into the details, they’re extremely depressing, but read it yourself if you like a good weepie.

All this is a downbeat prologue to a review of a new, very positive book on startups and funding by the man who “invented” the British venture capital and private equity industries, Sir Ronald Cohen.

Cohen is reported to be a close friend of new British Prime Minister, Gordon Brown, and a donor to the Labour party. Despite all that he can claim real and spectacular achievements in his long business career.

Cohen is the founder of a private equity company, Apax Partners, and has written an interesting book covering his business activities and philosophy : The Second Bounce Of The Ball: Turning Risk Into Opportunity. Gems of wisdom from the book include, “Start young, think big and stick with it.” And, “Seek out uncertainties. Risk is where the money is.”

Although Cohen started out as a rather poor immigrant to Britain from Egypt, his education was of the best : a degree at Oxford and an MBA from the Harvard Business School, where he met the people who would be his partners in later life, and the contacts who mattered.

The second bounce means trying to spot what comes next. Using our first example, what comes after blog networks? As a network owner myself, I know the problems inherent in that question. Recently, Google has severely downgraded the PageRanks of blogs and networks in particular. Many highly rated blogs have dropped from PR6 to PR 3, which now seems to be the norm. Syntagma has only just recovered to a 4, while some of our other sites are settling down to 3s and recovering from zero.

It’s not easy to run a business which is in the hands of another company’s self-interest. So Cohen’s suggestion is to stay ahead of the game by working on “the second bounce of the ball”, while never forgetting that risk is where the money is.

Our second bounce? : “a long-term plan to create specialist information products for high-worth niches, published privately or behind subscription walls.”

We’re already looking toward the third bounce.

Juicy Quotes

Risk is an emotive word that masks the value of uncertainty.

Stop worrying about failure and put that energy into winning the race.

Investors back jockeys not horses.

Fulfilment lies in reaching a balance between what you do for yourself and what you do for others.

I’ve read many books on entrepreeurship in recent years. This is undoubtedly one of the best, being both illuminating and readable simultaneously.

Highly recommended for merchant adventurers.