Failing Upward (excerpt from HTC)
Below is another excerpt from my book Hacking The Core (HTC). It’s about failures in startup land. Failures in startup land have a different life-cycle, a different pattern than conventional business. It’s a lot more O.K. to accept failure quickly and move on, which the best entrepreneurs do. I just read an older book by Seth Godin where he advocates “Know when to quit!”
But, there are many self-described “entrepreneurs” and “founders”who keep their web-fronts alive for a long period of time, just in case something could magically happen; they tweet for awhile, pass out cards, play the role of the founder/boss/CEO. It’s a form of speculation and ego gradification. They usually have little or no revenue, aren’t sustaining themselves, and are becoming as stale as the three day old pizza in the refrigerator. These are called zombie companies or fake startups. They litter the landscape now more than ever.
Here’s the excerpt…
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Failing Upward
“It’s failure that gives you the proper perspective on success.”
— Ellen DeGeneres
For real entrepreneurs, failure is less devastating than not trying.
Or running a zombie company. The definition of startups and failure has changed as it’s become easier to start a business and startups have become a visible part of our daily lives.
After World War II, the key goal in life was to get a good job with a large stable company that you could hold for 30 years, own your own home, and build a retirement nest egg. Startups were an anomaly. Failure wasn’t in the cards unless your employer hit the wall. But now…
“Having a startup will be the home ownership of the 21st century.”
— Anonymous Silicon Valley CEO
Great quote. Now it seems everyone wants to “have a startup.” There is a tremendous amount of pressure felt by the current generation to have a startup rather than have a job, or in addition.. You can’t blame them.
The world of work and income has changed a lot since the 1990s, mostly because of the internet. The goals of younger generations entering the work years of their lives don’t include the life-long job and failure aversion. They see how their parents lived and don’t want to repeat that life. Millennials and Gen-Z are much more open to the possibility of failure; they use it as a tool to find success.
They also don’t have just one job at a time. Creating and building a business has become its own entity, whether or not they already have a full-time job. For them, failure is less devastating and more of a learning experience.
“Build Things People Want”
— Paul Graham, Founder of Y-Combinator
However, that doesn’t mean you shouldn’t be as smart as you can about launching and sustaining a business, even if it remains small. The failure rate of web startups is over 90%, closer to 99%. Most of these failures are abandonment, or experimentation, or pivots. FAIL FAST has become a mantra in the startup world. How do you become one of the startup success stories instead of one of the many failures?
Why do so many startups fail? One answer is “They’re supposed to.”
But nobody enjoys failure. A lot of this was explained a few chapters ago in What is Early Stage? As Paul Graham says above, build what people want, but that’s not always so easy to pull off.
The key to avoiding failure or becoming a “zombie” company is usually about how you conduct your business at its earliest stages — your first decisions and moves can determine the next several years of your business’s success.
The best business launches I’ve seen are ones in which the founders are dedicated to each other, no matter what they build, even before they build anything. This changes their entire thought process about failure.
One great way to learn how to succeed is by analyzing and understanding why startups fail. This is a common practice in the tech world. You should study their mistakes, analyze their decisions, pick apart their products. More specifically, study the psychology of the founders which in itself can lead to failure. Often founders will write a postmortem of their own company in order to help themselves and others.
Silicon Valley Failure
In Silicon Valley, studying failure is actually a pretty popular and useful pastime; they’re not afraid to stare failure in the face and accept it as part of the journey. Many other places mouth the words that failure is good, but no place understands it and nurtures it like Silicon Valley.
There are several places on the web where failure stories are now published and …
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More in the book Hacking The Core on iTunes.
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