If you are an entrepreneur starting a business, you should already know that the odds are against you. This is simply a statistical fact.
Then the best way to succeed is not to understand that the odds are against you, it's to change those odds. If investors won't invest, find out why and change those odds. If no one wants to join you, find out why and change those odds. If customers don't buy, find out why and change those odds. If things don't work, find out why and change those odds.
Not only that, but most successes rely on countless variables, and most of these variables are out of your control.
Then find a way to work in a world defined by less-than-countless variables, most of which are within your control. You can't control what others will think or do, but there are things you can determine that will affect you plan of action.
By deduction, most successes are lucky ones.
Remove the words "By deduction" and your sentence is generally true. Keep those words and get a chuckle from those who know how to alter their landscape to remove luck from the equation.
Problem is, most people who want to "start a startup" start from a baseline scenario that is already very risky. Especially the standard "let's start a B2C company in a field I know nothing about, because I can write code".
You're completely right that most first-time entrepreneurs should be mitigating risk [1], but the easiest ways are usually not part of their thought process. Things like "let's start a consultancy", or "let's build a B2B company in a business that I validate in advance by getting people to actually pay for my product's development", or even "let's take a working business model and import it to a new geographic location".
[1]: I assume here that most first-time entrepreneurs care more about the expected value of their business, rather than other things like "changing the world" or "running a 100-person business". This isn't entirely accurate, but is very close for most non-rich people, and actually a lot of the ways to mitigate risk can also increase the chance of these things as well.
While the advice here is good, I think it approaches the issue from the wrong angle. You can't reasonably expect to just up and change what people think or how they react. You can change what you do or how you present it. What changes is not the reaction to, and it's most certainly not the odds of, the exact thing you're currently doing succeeding.
It's the product/service/approach/target audience/etc. that needs to change. The "odds" are an output, something you can only change by altering your inputs.
I agree with you. Knowing what's the current status of the "odds" is a good piece of information to have in order to to know how to adapt/change the inputs.
But my main point from the post is I want people to be OK and accepting of "failures". Because in reality, it isn't a failure. It is a lesson that you learned for your next attempt.
One day someone asked Thomas Edison “Aren’t you ashamed that you have failed 99 times?” Edison replied “I have not failed, rather I’ve learnt 99 ways in which an electric bulb would not lit up”
Thanks Ed. This really great. I'm in my mid 30's and looking to start a company.
There is a lot that can be done to mitigate risk. My biggest issue is that my time is limited and I don't have the luxury of taking a couple years off to make a go at it (not yet at least).
So I am trying to find a potential business (software related) that I can build on the side that gains enough traction that I need to devote full time to it.
I feel like under my circumstances, I shouldn't even try but I think its worth an effort.
Why do you think you shouldn't try? As long as you approach it as a side project unless things take off (don't bet the farm, don't sacrifice family), all you are left with risking is your time.
While I agree with this article's primary point - that fear of failure alone should not stop or paralyze you, I disagree with most of the rest.
To me, articles like this are the same as the rich guy telling the poor guy "C'mon, just buy the car. What's the worst that can happen?" The fact of the matter is that a lot can happen that can have long-term consequences that should be weighed and considered.
I admire entrepreneurs that can make incredible leaps of faith, but we typically only hear about the ones who succeed. There's also ones who took the leap with nothing to land on and came up short. There's also ones who carefully planned and took a "controlled leap."
Also, what does every action sports star, race car driver or soldier say? They say it would be more dangerous if they weren't at least a little scared of failing, and that elements of fear keep you attentive and energized. The same applies in entrepreneurship.
"Failure" carries different consequences depending on the person and the situation. To some, failing means they lost some investor's money and are on to the next project, or for some could mean having to find a job. While it could mean bankruptcy to others. Depending on circumstances, not everyone can afford to be so cavalier and needs to be a little more analytical.
Fear of failure is part of entrepreneurship and its historically the hurdle that separates entrepreneurs from everyone else. It certainly shouldn't be taken lightly.
I think we should start to seriously challenge the overhype of "fail fast, failure is fine".
Ever since the adoption of "Lean startup" methodology, "failure" suddenly becomes a no big deal to entrepreneur. Making decision is like throwing a Hail Mary that you don't really care too much about the outcome. Yeah I failed. So what? Let's try it again. Let's try 100 more times and we may hit a home run.
If you can put a A-class work in front of people, why do you even want to settle on B/C/D-class stuff? The world doesn't, and shouldn't, work in this way. Failure is bad for your reputation, at anytime, anywhere, in front of anyone. There is a reason why nowadays, acq-hire is more and more popular, because it give others impression that, hey, I didn't fail, I sold my business because it's a good deal. Sure, 1 out of 10 cases is like this. But for the other 9? it just helps to cover your ass and avoid putting the tag "failure" on you in your future career.
Is failure end of world? Of course not. Does it mean you shouldn't set a high bar, think carefully, plan comprehensively, put as much effort as possible to maximize the outcome? Hell no. Remember, you can only control what you can control. So, whenever you do something you can control, you better do it right.
They way I understand it, most people aren't advocating that.
"fail fast" I think embraces:
- finding if your idea works FAST. Stuff like Pretotyping.
Yes, that part suggests showing something half-baked ("B/C/D class stuff"), to see if it works - example: mocking up something the size of a Palm and seeing if you would carry it around all the time, to validate that hypothesis. Or the modern-day landing page.
But with only the minimal set of stuff the user needs. The original iPhone didn't have cut&paste - do you think it was a failure? Most succesful early-runners do one thing and do it well, and then build on it.
"Some people equate the word lean with cheap, and cheap with low quality. They are using the wrong definition of the word lean.
"Lean" in Lean Startup is derived from the Toyota Production System, which is decades old. The definition of Toyota's lean is "to design out waste and overburden.""
The point is, find out what the customer needs first and fast ("fail fast"), then deliver, but deliver something of quality. With code it's tricky because you're iterating and it might be tempting to keep in low-quality stuff, but even the iPhone iterated :)
"But most entrepreneurs, seeking validation, ask me whether or not they should pursue their ideas. There is only one way to find out — to go do it."
That is hardly a strong argument! I tend to put up the red flag when I hear "there is only one way" about anything.
Of course, one cannot tell with certainty if a business idea will work or not. No one really expects that, do they? Don't ask one person and expect their opinion to be any more than it is -- one piece of information, often anecdotal and biased in some way. Talk to many people. Select them based both on your target market and diversity. Construct a mosaic of information. Think about what you learn.
If you think probabilistically, I would suggest that an entrepreneur's 'startup' decision is better framed by two questions:
1. Given your nature and interests, what business ideas are more likely to work well?
2. What are some effective ways to test (figure out) if a business idea will work?
Some good options include: get out and talk to people; sell before build; learn about your industry; surround yourself with passionate, smart, informed people; experiment; test; measure; create.
I do think there's a fine line between being resilient and becoming unfazed by failure (the latter of which is bad). As the article points out, failure is important as a learning tool, but by the same token, trying to avoid failure isn't necessarily a bad thing. In fact, startups that consciously navigate uncertainty efficiently and mitigate risk as much as possible tend to be much more sustainable.
Sometimes I think entrepreneurs err a bit too much on the side of being too 'okay' with failing and pivoting (buzz word), but I'm a big believer in planning, executing, reflecting, and repeating. Sure, for some things you just have to jump straight in, but I think caution, thought, and preparation all go a long way.
Thanks for this great post. After speaking with some really successful entrepreneurs, I noticed they are extremely stubborn (in a good way) even after failing several times. The odds are stacked against them but they still allow themselves several years to find a semblance of success which they can develop further. I appreciate your article. I am working on similar topics for my book Disruptors so posts like this help.
A great side effect of this is that lots of young entrepreneurs take on challenges where they are totally oblivious to all the hurdles and challenges ahead of them. And continuing the mindset of just pushing on, they tackle them one step at a time.
Not being afraid to fail (fast) along the way, is just as important as not being afraid to start.
I'm going to agree and disagree. Good-faith business failure really shouldn't be stigmatized, but it is. As with record labels (which is what VCs are) you get a first shot if you can get an introduction, a second shot if you grovel, and then you're done. That's why even the most ill-conceived startups get "acq-hired" these days instead of actually failing. The career damage associated with failing is too much for anyone to stomach at this point.
The culture of fear actually makes sense because, in a feudalistic reputation economy where you can spend months dealing with the fallout of a bad reference or a business failure, there is a lot to be feared.
I feel like a lot of people put these manic "I quit my job to do a startup" posts and put them on HN and get lots of kudos. No one writes, "I'm 33 and answer to a 26-year-old 'tech lead' and I have no savings; that's how much my three startup failures have fucked up my life and career." People talk a good game about their successes, but failures are embarrassing, messy and complicated and almost no one is willing to share a full story over one of those, especially if they involve other people. (That's understandable, but it's still biased reporting.)
The unfortunate truth is that we really don't live in a world where that kind of cavalier attitude toward failure can be afforded. That's especially true given how rapidly age discrimination becomes a problem for us.
I've gotten to where I am by being honest about my shortcomings and sharing my most embarrassing stories. Unimportant people are always shocked and the quiet people that make decisions have always seemed to appreciate it... even if it made them upset at first.
I believe it is the eve of being well-known that we are all our own spokespersons and that our branding and image is just as much a puff piece as a coke commercial.
I do agree this falls apart when the stories involve other people, at least non-anonymous people. No one likes a snitch.
I've gotten to where I am by being honest about my shortcomings and sharing my most embarrassing stories.
I live in New York. Most people expect perfect career histories, even in startups. Even minor blemishes put you out forever. It's that competitive.
When I was at Google, I put together a strategy that would have saved Google+ Games (there was a G+ Games, you ask? My point exactly) and no one took it seriously because my previous startup (at which I was an engineer, not CEO) had failed. Had that startup become a success, people would have taken the suggestion seriously and Google would be worth at least tens of millions more.
I'm 29 and already deal with age discrimination and the "job hopper" stigma from having made a couple bad calls and having a story that looks more like freelancing than the "company man" fantasy (which is dead, and people who still believe in it and hold "job hopping" against people should be evaluated for dementia).
I also get an unbelievable amount of shit about leaving Google and, on a job interview, you can't exactly say, "Oh, their reputation as a great place to work is completely fraudulent because in 2009 they hired a bunch of transplant execs who turned the company into Enron, and now it's impossible to move to a better project." It's the truth, but I can't say it.
Maybe it's magically different in the Valley. I don't live there; I don't know.
You're basing an entire alternate reality off one outcome; what about the one where your startup succeeded and ended up costing google tens of millions?
Argh - I am so glad I don't live in an elitist nyc/valley area where people compete through job cannibalism. My life is simple, my home is cozy and my nights are mine. I write code in a small shop on its 11th year, my 5th. I am so glad that software is not all about life in the fastlane. I admire your life style, but I do not envy it.
You're basing an entire alternate reality off one outcome; what about the one where your startup succeeded and ended up costing google tens of millions?
The startup where I worked was completely unrelated to the idea that would have saved G+.
I'm saying that, had that startup succeeded and had I ended up at Google around the same time, I would have had the credibility to actually roll up my sleeves, push a few idiots out of the way, and save those tens of millions of dollars. But I didn't have that credibility, at least not then, so I had to sit back and watch as enormous amounts of value were incinerated before my eyes.
Getting hired is easy. I got hired at Google, which is supposedly uber-selective. Getting taken seriously is annoyingly difficult even with minor mistakes.
Now that I'm 29 and have had 6 jobs, I really don't want to keep changing. I'll gladly bolt if I end up with an awful manager, bait-and-switch hiring, or any of the other nonsense that we put up with in this industry, but there's something to be said for a 5+ year fit. I really don't want another 6-month fling. Any idiot can get "a job"; getting the right one, one that comes with some credibility and autonomy, is important.
It seems that most people, after a startup fails, end up in the shitpile applying for bullshit subordinate roles where they might get to write 5 lines of new code per day in the vain hope that one day, several years later, The Boss might throw them a bone and give them a real project.
Most SV companies I've dealt with seemed not to have their act together. A couple were pretty cool, but one told me to expect 5 phone screens (I bowed out; don't have time for that shit at my age) and one required signing a full-on non-compete to take a coding test! This prima donna shit gets old.
Yep. Fear can be healthy as long as you understand what you're afraid of and why; it doesn't have to stop you from doing certain things, but it can lead you to at least consider either not doing them or approaching them very carefully.
While I agree that we -- at least the two of us, anyway -- lead lifestyles that don't support high-stakes gambling, trust fund babies and other independently-wealthy people can afford that attitude, at least to a point.
The only difference is where that point is. For some people it's high enough that dropping everything and throwing a Hail Mary just isn't a big deal. For most of us that's a very poor decision. Discovering or deciding where that point is in your current situation should be the first step for anyone in deciding just how afraid they should be of failure depending on the investment they're considering.
A total failure (not an acq-hire) is bad for your reputation. The acq-hire gets you a Director or VP-level position at the acquirer even though it leaves your employees screwed. Actual run-out-of-money business failure makes it hard to get funded again. VC is a regressive reputation economy in which no one likes you if they perceive others as not liking you, so actually having to close a business down makes you unfundable.
Is this from the experience of someone who tried to raise again after failing? At the end of the day it's what you produce and the opportunity at hand not what you've done. Raising with a pitch and a dream is rightfully more difficult the second time around.
Is this at the seed stage or later? Wouldn't VCs prefer to put their money in one who has tried a startup before and failed than a first-timer for whom there are a lot more unknowns?
Acq-hire is the socially acceptable way to fail. If you actually fail in the everyone-gets-fired sense, then you have the double stigma of (a) failing and (b) not having built something deserving even of the consolation prize.
Oh, and if your investors fire you "for performance" (if the thing in a tail spin, getting fired almost doesn't matter and might make your life better) you might as well kill self. No one is going to touch a fired founder with a 10-foot pole. Even regular jobs are out of the question, much less the EIR sinecures and executive injections that acqui-failed founders usually get.
Then the best way to succeed is not to understand that the odds are against you, it's to change those odds. If investors won't invest, find out why and change those odds. If no one wants to join you, find out why and change those odds. If customers don't buy, find out why and change those odds. If things don't work, find out why and change those odds.
Not only that, but most successes rely on countless variables, and most of these variables are out of your control.
Then find a way to work in a world defined by less-than-countless variables, most of which are within your control. You can't control what others will think or do, but there are things you can determine that will affect you plan of action.
By deduction, most successes are lucky ones.
Remove the words "By deduction" and your sentence is generally true. Keep those words and get a chuckle from those who know how to alter their landscape to remove luck from the equation.