Last month I suggested that learning from failure was overrated. My point was that learning from failure may tell you what not to do the next time, but that doesn’t tell you what to do next time. I believe paying more attention to your successes leads to better outcomes.
A couple of days ago the New York Times ran a piece called Try, Try Again, or Maybe Not. It refers to a recent Harvard Business School study that found that when it comes to venture-backed entrepreneurship, the only experience that counts is success:
Already-successful entrepreneurs were far more likely to succeed again: their success rate for later venture-backed companies was 34 percent. But entrepreneurs whose companies had been liquidated or gone bankrupt had almost the same follow-on success rate as the first-timers: 23 percent.
I was thrilled to see this. I’ve never understood Silicon Valley’s obsession with failure. Many investors and entrepreneurs out there believe that you should fail a few times before you succeed. That the people worth funding are the people who’ve failed a few times. I’ve heard from a few VC who won’t fund an entrepreneur until they’ve failed at least once. I don’t get that.
Mark Pincus, founder and chief executive of Zynga Inc., (and Tribe.net before that) says “As an entrepreneur, you have to get used to failure. It is just part of the path to success.”
What? Failure is part of the path to success? This industry’s obsession with failure has got to stop. I don’t know when it became cool or useful, but the industry has been steeping in it for so long that it’s become normal to assume failure comes before success.
Don’t be influenced by this. If you’re starting something new go into it believing it’s going to work. You don’t have to assume you’re doomed from the start. You shouldn’t believe your first idea won’t be your best one. And you definitely shouldn’t treat your first venture as a stepping stone towards something else. What you do now, what you do first, can be the thing you do well for as long as you want to.
Also, don’t let the old “9 out of 10 new businesses fail” cloud your vision. It has nothing to do with you. If other people can’t market their product that has nothing to do with you. If other people can’t build a team that has nothing to do with you. If other people can’t price their services properly that has nothing to do with you. If other people can’t earn more than they spend that has nothing to do with you.
Yes, starting a business is hard. And you certainly could fail. I’m not suggesting failure isn’t an option. I’m only suggesting that it shouldn’t be the assumed or default outcome. It doesn’t need to be. Have confidence in your ideas, in your vision, and in your business. Assume success, not failure.
Oh, and one more thing… While I liked the article, this part of the study made me gag:
Success was defined as going public or filing to go public; Professor Gompers says the results were similar when using other measures, like acquisition or merger.
Going public, being acquired, or merging with another company is a skewed measure of success. It’s easy to measure for a study, but it’s barely what really defines success for most entrepreneurs. How about sustainable profits, loving your work, and making a dent in your universe?
clifyt
on 23 Mar 09“Already-successful entrepreneurs were far more likely to succeed again: their success rate for later venture-backed companies was 34 percent”
Don’t account correlation to causation. I have been involved with a number of successes in one field without a single failure. I’ve had mixed success in another…in the field where I’ve had successes, my partners were willing to let me try new things, and give us more time to make thing work.
In the mixed success category, it was much more likely to have a more structured approach given from above, and the mission was defined as DO THIS OR IT IS FAILURE…no finding new missions and expanding…no extra time…one is lucky to have to time given without some of it taken away…resources were scare and never to the level promised.
Of the projects that were run in house with no oversight, the failures GENERALLY led to better insight…
Again, correlation is not causation…this is how it worked for me. This example isn’t even enough to be a case study, let alone a trend. A real study with more than one variable (success or failure) would probably show completely different results (even if still supporting the same hypothesis).
David Andersen
on 23 Mar 09Candidate statement for the Bullshit Hall of Fame:
“As an entrepreneur, you have to get used to failure. It is just part of the path to success.”
Dear VCs:
I’ve failed well over a dozen times now. Clearly I’m on the path to success. Please double your funding and I’ll double the failure rate, thus insuring I get to success that much faster. I am open to failing faster and bigger if you have the available funds.
Regards,
Failing my way to success
BS
on 23 Mar 09Does anyone really half-ass their first business because they think for some magic reason the first one will fail?
The ‘success after failure’ mantra to me is about getting back on the horse after you fall, not about letting it throw you for the sake of getting back on.
JF
on 23 Mar 09The ‘success after failure’ mantra to me is about getting back on the horse after you fall, not about letting it throw you for the sake of getting back on.
Expectations have a lot to do with outcomes. If you go into something just assuming it’s not going to work – which is what a entrepreneurs have been seasoned to think – then there’s a fair chance it’s going to infect your confidence and vision.
And, yes, I do know a number of entrepreneurs who treat their first idea/business as a learning experience instead of a potential for success. They start by saying “next time I’ll…” or “my business after this one…” – I think that’s unfortunate.
CD
on 23 Mar 09Also, small business or not, I’d prefer my surgeon not “live to fail”.
Raymond T. Hightower
on 23 Mar 09I like Rudyard Kipling’s approach to success and failure. From his poem If:
...If you can meet with Triumph and Disaster And treat those two imposters just the same;
In other words, don’t get big headed when you’re successful, and don’t get depressed when you fail.
Easy to say, tough to do :-)
kg
on 23 Mar 09Easy to say from where you’re standing. I really love your posts, but it often has the attitude that you know best since you had good fortune.
Kevin
on 23 Mar 09I think saying that the road to success if filled with failures is a valid statement in most cases. Most successful ventures had some failure along the way. And obviously, all failed ventures had failure along the way. But I really think the point of that statement is to imply that failure isn’t the end of the road. At the point of failure, the absolute best thing you can do is learn from your mistakes and try again. No doubt, it you succeed, there is much more to be learned. But that still doesn’t mean the failure provides zero value. I think both viewpoints are valid.
R Shaw
on 23 Mar 09I agree that you should not be thinking “failure is ok” when it comes to your business. However, no business (or individual) could be successful without making a series of small failures as they operate from day to day, and then learning from those failures.
Kristian Dupont
on 23 Mar 09I think that the obsession with failure could stem from a simple extrapolation. Fear of failure is paralyzing and most places in the world suffer from this far more than Silicon Valley. Since SV is the entrepreneurial world leader, this could be interpreted to mean that the more failures, the more success. To me, the key is to not be paralyzed by fear of failure and make sure you learn from it when it does happen – not to strive for it.
pwb
on 23 Mar 09Your missing the point. It’s not that you learn from failure. It’s that you are willing to take a risk. It’s easy to avoid failure…don’t take a risk.
Berserk
on 23 Mar 09There really isn’t that much of a difference.. 3 in 10 previously successful will be successful again, 2 in 10 of previously total failures will be successful in the future. To me that says that the current idea is what matters.
If you, for example, previously have helped design several well known bridges (including the big red one in SF) doesn’t mean that you are safe from having one of your later bridges collapsing in a spectacular manner.
Invest in the idea, not in the person.
(In the case of bridges you probably have a point, though.. better not to fail, ever.)
Denis
on 23 Mar 09So in essence you are saying that entrepreneurs are focusing on cutting their fingers off while chopping up the onions? Really???
I disagree with you that there is fascination with failure. There is a healthy dose of positivism in looking at and dealing with failure in examples that you quote.
You get what you focus on. If you focus on failure you will fail. If you focus on success you will succeed. There is little doubt about that. But, I think you might not be understanding why people “value” failure or you might have “issues” with failure. Or you might just like being contrarian :-)
ALL Entrepreneurs that I know are NOT concentrating on failure. Entrepreneurs by definition are positive outlook personalities. You can’t be doom and gloom and be entrepreneur. Going in we all expect success.
When confronted with failure though you have two things to do:
1. Mental. You need to overcome mentally that you have failed and move on so it does not impact your confidence and drive. In most cases you fail because of what you have or have not done. Looking at failure as learning experience or stepping stone helps a lot with that. Nobody wants to fail. Shit happens because you don’t know better at the time….
2. Learning. Knowing what you have done wrong is immensely useful. You always know exactly why you fail, but you always have doubts about why you succeeded. Looking at the failures is useful also because you have many more data points to look at elsewhere. Failures are plentiful, while successes are rare. There is useful information in each of these failures.
The lessons from success are much harder to distill. For example, in market someone has got to succeed no matter how good or bad they are if there is any demand. So what do you get from studying success in that light? Luck is also part of every success.
Neil Wehrle
on 23 Mar 09@R Shaw beat me to it, but I was thinking along the same lines – it is often the scale of the failure that matters. Every product of business has new features that must be tweaked or pulled along the way. Because they are so small, its easy to isolate the reason(s). When failure happens on the scale of an entire business, it may be difficult to pinpoint the exact cause.
brad
on 23 Mar 09Previously trolled on this blog. But you hit it bang on this time, JF. I’m building a text editor that I hope to bring to market sometime soon. I’ve immersed myself in Getting Real, but a LOT of entrepreneurs I know personally have this mentality. It’s quite draining on the motivation of one who has not yet even gotten to the starting blocks. Thanks for the motivation!
Chance
on 23 Mar 09I’ve worked for a number of different agencies whose sole focus was going public or being acquired, otherwise known as the “exit strategy”. This is not a strategy for running a business. If the number one goal of the leadership is to “sell out”, you can pretty bet they are not focused on the things you care about most. In the “exit strategy” environment, you will not work on the things you love. You will work on the things that help create the illusion of a successful company.
Ivo
on 23 Mar 09Of course failure is often part of the path to succes: that is a logical mathematical truth. If the average succes rate is 25%, then the a priori chance that someone will fail once is 75%. However, the a priori chance that someone will fail twice is only 56%, etc, etc. On average, someone that is succesful will have failed at least two times. Of course, you cannot use this fact to think “I’ve failed twice, I’m due to succeed this time”: that would be the gambler’s fallacy. That doesn’t detract from the fact that losing 1:5 bets is ‘part of’ winning it once in every while.
Alan
on 23 Mar 09I believe that the “failure is part of success” maxim is a story that people tell themselves to help give them the courage to go out on a limb and start a business, or to help them not feel so bad when things don’t go right.
In that sense, I think it has a purpose in helping would-be entrepreneurs to get started now, instead of waiting until they are “sure” they can successful. Although it may just be a crutch to make the decision less scary, this seems entirely in line with Getting Real.
Witold Rugowski
on 23 Mar 09Well, if success metric was skewed (IPO, merger, acquisition) so probably 34% success rate is also skewed – so still we don’t have proof that failure is overated :)
Paul Chiu
on 23 Mar 09I think whether or not failure is useful depends on the person learning the lessons. In my experience no one really sets out to fail, most people that starts a business believes on some level that it will succeed. The main point of the mantra is to take away the stigma and fear associated with failure so that people only focus on what they need to do to succeed instead of ending up in analysis paralysis.
Secondly, I think keeping failure in mind as a minor possibility has the benefit of giving you an exit strategy for when things do not go according to plan. This requires that you a) have a plan and b) be able to measure whether that plan is being realized. Most small business’ plans consist of: we will do this and be rich! If the market responds – great – most of the time the founders may linger and refuse to accept failure until it becomes financially unsustainable for them.
Having mostly had minor successes in my ventures, that some may consider successes, while others failures, I believe most entrepreneurs need to think like VCs and investors and place a var higher value on performance and time. Each business is an investment that needs to reach a reasonable target and outperform your other investment options, and if it does not you need to either re-think your strategy, or get out.
Laurel Fan
on 23 Mar 09People fail before they succeed sometimes for the same reason your keys are always in the last place you look.
Nik
on 23 Mar 09If we are talking about venture-backed entrepreneurship then success has to involve an exit strategy or the VCs don’t get paid back. However if we are talking about a business that isn’t venture-backed, then you are correct to say going public or being acquired shouldn’t be the sole measurement of success. The question then becomes: what should the measurement of success be?
Martial
on 23 Mar 09I was drinking beer with a guy the other day who has done great things, grand things, fantastic things. I got him talking about his life. I am one of those people who is interested in the process, the steps along the way, and I quizzed him. He began to get frustrated and I realized that for him there were no steps.
For him there was only one giant step, only success or failure. No milestones or goals along the way.
As I said, he has accomplished great things and part of that is because he is a meticulous planner and good strategist. But because he is a planner, ordinary humans can look at his work and his process and see the milestones, the building up of momentum, the little victories. Yet he is oblivious to them and seemingly derives no pleasure from them.
His definition of failure is very different and much broader than mine. Ask him about how many failures he has had and his number would be very high: any goal he has ever set which he has not yet reached is a “failure”. Ask me about him and I see ideas in process and not one failure yet.
Mark Weiss
on 23 Mar 09I agree, success should should be defined more along the lines of sustainable profits, loving your work, and making a dent in your universe? With that in mind success is going to be different for everyone.
Dare I say success could even be someone who took a risk and left their 9 to 5 job in pursuit of their start up idea that failed?
Barbara Ling
on 23 Mar 09I disagree with some points you made. Personally, I go into things expecting success, but should failure occur, I use those lessons to direct me in my next project.
I suppose you could say I learn what NOT to do….but that in itself is valuable as well.
Data points, Barbara
Happy
on 23 Mar 09I know a lot of business owners. I know 0 that claim to have a plan to “fail a few times”. That would just be stupid and I don’t think it happens as much as your premise makes it sound.
The point that you missed again is this: The business community does not shun people when they have failures. And rightly so. That’s it. It’s simple and not really worth getting all that worked up about.
It’s super simple to never fail – just don’t try. I know sports is a tired example, but it’s a good example of why people should not be, and are not (except for here in svn), discredited for failing:
“Of the top ten strikeout leaders in major league history, four are in the Hall of Fame and most of the rest will receive consideration.”
The Top Ten Strikeout Leaders in Baseball History
Reggie Jackson: Mr. Strikeout
Failure is part of a persons’ pool of experiences toward success. If not, I posit they are not stretching themselves enough. You don’t know where your limit is until you’ve passed it.
Devin
on 23 Mar 09Oh look! Another binary discussion on learning from failure vs success!
One word: Balance.
One is not better than the other. They do not exist without eachother. Learning that is the first step to not wasting your time reading anymore of this fluff.
Tiffani
on 24 Mar 09Booyah. Love it. I think part of the issue with “learning from failure” talk is the way biz-pundit types articulate themselves, through hyper guru rhetoric that makes people pay attention.
It’s nice when the folks doling out snappy advice for entrepreneurs spend time explaining themselves subtly (or at least authentically?).
In any case, I think you’ve done that.
Yan
on 24 Mar 09Stuff is made up of zillions of variables – people who haven’t failed don’t know which contributed to their success. It’s never everything you do. They tend to attribute it to the factors they think or want to believe made them successful. They broadcast it and the people follow. Everyone believes it. Why wouldn’t you? Eek.
You learn best through success and failure. For most, too much of either one is dangerous. Overconfidence is as lethal as depression.
Lawrence Krubner
on 24 Mar 09“That the people worth funding are the people who’ve failed a few times. “
In the 1800s, in Europe, the argument for the liberalization of bankruptcy law, and the introduction of limited liability, was bolstered by the increasing number of cases like John Bayer, who went bankrupt and then, later, started producing Bayer aspirin, which became a great success. By the end of the 1800s, there was a widespread sense that some great entrepreneurs needed to fail before they could succeed.
Lawrence Krubner
on 24 Mar 09“Don’t be influenced by this. If you’re starting something new go into it believing it’s going to work. You don’t have to assume you’re doomed from the start.“
In this paragraph you switch from talking about assertions commonly held to be facts in Silicon Valley, to talking about psychological and attitudinal attributes that you think are helpful to a new venture. Was this post suppose to be a bit of self-help pep talk, or were you trying to assert something factually accurate? It seems you’ve muddied things a bit.
Lawrence Krubner
on 24 Mar 09“I’m not suggesting failure isn’t an option. I’m only suggesting that it shouldn’t be the assumed or default outcome. It doesn’t need to be. Have confidence in your ideas, in your vision, and in your business. Assume success, not failure.“
I really appreciate what Anthony Robbins is trying to say here and I… oh, wait a minute, this is the 37 Signals blog isn’t it? Sorry, was that Jason Fried saying something?
I really liked the Getting Real stuff more than I appreciate the new Oprah Winfrey stuff.
Jason Lander
on 24 Mar 09Awesome. Love your posts. Always inspiring.
David Andersen
on 24 Mar 09@Devin
One is not better than the other.Think you might want to reconsider that one Devin.
BJ Neilsen
on 24 Mar 09I’m glad I read the post, it helped put a bit of a new spin on an old concept. For myself, whenever I hear that Entrepreneur’s are supposed to fail, I have always read it such that it says that Entrepreneur’s shouldn’t be afraid of failure.
Meaning that I don’t necessarily have to fail, but if the occasion were to arise, it wouldn’t be the end of the world, and that I would have to learn to move on and “learn from the experience” :). Often people get discouraged by failure and quit altogether, which would be the worst way to handle said failures.
Thanks again for great content.
Matt Moore
on 24 Mar 09There is something deeply wrong in this post.
Failure rates are correlated to risk. As are rates of return. Riskier ventures tend to offer a higher return – and are also more likely to fail (that’s what “risk” means).
So you can launch a really boring business (but reasonably profitable) and be counted “successful”. Or you can take a genuine risk and face a higher chance of failure.
It seems that Jason believes that failure is bad and hence risk is bad. So basically, Jason is a wuss.
Jason is also presumably American. Other nations are less forgiving of their failed businesspeople (bankruptcy laws n such like) and they tend to have lower levels of entrepreneurial activity. So Jason is an UnAmerican wuss.
If you are not failing sometimes then it’s simple: you are not taking enough risk.
The question is not whether you fail, it’s how you fail: fail small, fail early, fail cheaply and for heaven’s sake, learn.
If you want some genuine research on learning from success AND failure then have a look here: http://blogs.harvardbusiness.org/sutton/2007/06/learning_from_success_and_fail.html
I also like Rule 7 here: http://bobsutton.typepad.com/my_weblog/2006/08/twelve_weird_id.html
Matt Moore
on 24 Mar 09I decided to go and have a look at the original paper: http://www.hbs.edu/research/pdf/09-028.pdf
...this evidence provides support for the view that some component of performance persistence stems from “success breeding success.” In this view, entrepreneurs with a track record of success can more easily attract suppliers of capital, labor, goods and services if suppliers believe there is performance persistence.
So perception plays a significant role, not just skill. Everyone loves a winner.
We identify serial entrepreneurs through their inclusion as founders in more than one company in our data set. As a result, we may fail to identify serial entrepreneurs who had previously started companies that were not venture capital financed. Thus, our study is only about serial entrepreneurship in venture capital-financed firms, not about serial entrepreneurship in general. To the extent that prior experience in non-venture-backed companies is important, we will be understating the effect of entrepreneurial experience.
This point might suggest that smart entrepreneurs make their mistakes before they ask for VC money. But I’m making that up because we just don’t know.
We conjecture that the very best and the very worst entrepreneurs do not become serial entrepreneurs.
Hmmm
Paladin
on 24 Mar 09Henry Petroski makes a good point:
We could use some more humility.
Failures are geniuses!?!
on 24 Mar 09In regards to JF’s comments about VC’s not funding someone unless they have failed at least once… I DON’T GET THIS either. There seems to be this fascination with people who “take changes” yet seem to fail all the time. For some reason they are considered “successful”.
Look at this Alex Zoughlin character who was recently hired by Chicago based VHT as the new CEO (and saviour of the company).
if you analyze what this guy has created, there really is no substance. He was a founder of Orbitz travel, which is struggling. He then started G2 Switchworks which got bought up because in reality it was not profitable, and he started a few others companies that no longer exist. So, basically he has created nothing (other than selling unsuccessful companies). Yet, since this guy has failed again and again, he is considered a genius?!?
Hashim Warren
on 26 Mar 09Straw Man – meet your death!
Jon Glick
on 27 Mar 09After reading this post I started seeing the “failure” mentality in other places. Like this screenshot of an advertisement I saw on discovery.com. Granted, I didn’t actually watch the trailer but the idea of an automobile company advertising failure seems sketchy at best.
This discussion is closed.