Startup Insights

Once upon a time in a galaxy far far away, when it was cool and unique to talk about new venture failure, I did an interview as part of Society of Actuaries coverage of the Blue Screen of Death and Reboot.  I was looking for something else when I found it and I thought it was worth sharing on the startup insights blog. Enjoy…

Isn’t failure the opposite of success? Or is that just a belief we’ve come to learn and accept as the truth?

I think failure and success are both relative terms that allow us to judge how we have fared with respect to expectations. Sometimes ours, at times of others. In a pack of Olympic runners, the alpha males are not happy with just a gold medal; they want a personal best, a shot at the world record or more. For me, even making it to the qualifier heats would be worthy of celebration. Same goes with actuarial exams. Flunk the old life contingencies exam three times and you would be happy with a 6. I have friends who were upset that they had only scored a 9.

So you are not really talking about extreme ends of spectrum. Failure and success are reflections of minor adjustments in our perception of who we are and how we rank with the rest of the world. These perceptions and expectations change with time, experience, age and phases of our lives.

How does the concept of it being important to fail tie in with management’s expectations to succeed? Doesn’t that go against the grain, so to speak?

Not really. There is actually a fair bit of research as well as anecdotal evidence supporting the fact that organization that encourage or channel failure (versus penalizing it) do quite well. Omer my first boss and the country manager of the consulting practice, used to say “As long as you charge it to the experience account and learn from it, I don’t mind”. John Whitney a well respected turnaround specialist and Professor of Management at Columbia used to joke that in the Navy it was okay for you to shoot yourself in the foot, as long as you didn’t reload.

Even today at work as part of our practice we miss our internal deadlines on a regular basis. But we try very hard that a missed deadline or a failed commitment does not result in a witch hunt. As long as we understand what part of our process broke and how we can fix it so that it doesn’t break again, there are no penalties. As Whitney and Omer indicate with their comments, great organizations have a high tolerance for failure. Problems arise when you fail consistently or refuse to learn from it.

What is your personal definition of success?

It changes every 5 years. Right now I would kill to get some balance in my life. 5 years ago I would have killed for a million dollars in funding. 5 years from now, who knows?

And failure?

This is easier. Not being able to take care of my family. Not being able to uphold the values I believe in. Not doing justice to the opportunities I am exposed to.

If it’s true that failure is just a step on the road to success, how do you keep your morale up while “failing?”

Let me clarify something first. I don’t think that failure is a step (first, second or otherwise) on the road to success. Some of us will fail and will keep on failing and then give up. Other will stay on the path and die trying and still not succeed. And an insanely fortunate group will get it right the first time. The point I am trying to make is that just because you have failed or are failing is no guarantee that at some point later you will succeed. Failing is not a predictor of success. But how you react to failure is.

How do you keep your morale up while failing? With difficulty!

The honest truth is that you will be miserable. Nothing will console you. But with most things in life, you will get over it and move on. (When people said this to me when I was failing, I ignored them, remained miserable and moved on.)

Assuming you have experienced “failure,” what have you learned from it? How has it impacted the way you do business? The way you interact with clients? Your view of life in general?

Personally – humility, a stronger belief in destiny and fate, a slightly higher tolerance for failure in others. I expect less and give more.

At a business level, I think I am leaner and meaner in how I do business now compared to 5 years ago. I now make a conscious effort to make every dollar spent count. For instance before my failures I used to go out and buy stuff on impulse; today I do an ROI (return on investment) calculation in my head before most purchases. I still do gut purchases but not without a target date for payback on my invested capital.

At a professional level, I am now more selective in terms of clients and projects I am willing to work with. As with my money, I make an extra effort to make every client dollar spent count – if I can’t make it count, I would rather not help spend it. I am bigger on delivering tangible, recognizable value to customers than ever before. I may not be a better listener as yet, but I have certainly made an effort to become one.

At a philosophical level, my failures gave me an opportunity to appreciate what we normally take for granted. Family – parents and children; health and happiness. I have also learnt how little it takes to be truly satisfied with one’s life and the freedom having no money brings. I always thought that only way one could become agnostic to cash and wealth was by becoming obscenely rich. The truth was very different. The less we had the freer we became.

As you see it, is it necessary to fail before one can succeed? Can one succeed without failing first?

Yes you can certainly succeed first without failing. I know quite a few who got it right their first time around. Having said that, given the choice, I would rather fail first then succeed, versus the other way round. Failure is a far more gentler and forgiving mentor than success.

Any tips on how to endure the failure without throwing in the towel?

I think ultimately your endurance is a balance between the depth of your personal check book and the intensity of your belief in what you are doing. In plain English, either have more capital than you would ever need or enroll in Zealots 101. Ideally do both.

I survived because I had my family with me. When everyone else walks out on you they are the ones who will carry you through, irrespective of how mean, rude and arrogant you have been. So be nice to them.

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