Lose More, Win Big: The Power of High-Failure Strategies
Early in my career, I was struggling to find my way into a great role at a startup.
How do I figure out which companies to approach? How do I get the right intro? How do I figure out if the timing is right and if a suitable role is available?
I was wrestling with these questions when I got the best piece of advice I ever got about looking for a job:
Make a list of every single company you think is interesting, then cold call every single one.
Up until this point, most of my professional and academic life was punctuated with high-probability strategic decisions. Not that I didn’t take risk, but I would usually weigh the risks, and then make a decision that involved a reasonable chance of success at each step of the way.
This strategy was different. Yes, if I embarked on the path of cold calling 30 companies, I would likely find something interesting. But along the way, it was going to involve a lot of failure and futility.
Every individual call was likely to be a failure, even if the strategy as a whole was likely to succeed.
The strategy worked. I got the job. Fast-forward to today, and I’m still a big believer in the value of a “high-failure strategy”—especially in the context of building startups.
The Success Matrix
With any problem, there are likely multiple solutions with varying degrees of success. I find it helpful to think of them in terms of a 2×2 matrix. On the vertical axis is that chance that the strategy succeeds at any one time. On the horizontal axis is the chance that the strategy succeeds if repeated over time. This yields four quadrants.
The bottom left strategy is an easy one to rule out. Chances of success are low no matter what. You shouldn’t attempt this strategy because you are bound to fail.
The top left strategy is very dangerous. These are situations where a strategy may work out well if employed once or twice. But if repeated over time, the odds are not in your favor.
Some examples here are pretty obvious. Doing something illegal. Taking drugs. Drinking and driving.
But some are less obvious, like being disingenuous to win a deal, secure a financing, or close a candidate. In a multi-turn game, you have to look beyond the outcome of a single turn. You should rule out this strategy, too.
The top right strategy is where most people tend to gravitate. We tend to like strategies that have a pretty high probability of success at each turn, and also have a pretty high probability of success if repeated consistently.
It’s what we are trained to hone in on. In school, we are trained to show steady and consistent progress towards a goal. Training for a sport or a musical instrument leads to improved skill over time. It’s usually not an exercise in complete futility along the way.
The problem with the top right strategy is that everyone will gravitate towards it.
For example, most companies would love to hire the smartest young technical talent out of MIT and Stanford. The problem is, so would Facebook, Google, and Uber. If you play the same game as these companies, you may be in for a world of hurt. You need to find some other sort of angle, or some other profile of talent that most other companies miss.
Put another way, if you are going to take the same strategy as everyone else, you have to be that much better — or luckier — to win.
The bottom right strategy is fascinating because it leads to great outcomes — but it’s much less competitive.
Most people are not trained to find these strategies and are not trained to have the stomach to execute on these strategies for a long enough period of time. But the ones that do reap the rewards — especially over time.
Using High-Failure Strategies
I saw this first-hand with my startup job search. One of my cold emails that led to me getting the job was to the CEO of a company backed by top-tier VCs. That job later led to this CEO being an investor in my fund and a co-investor in multiple companies. My manager at that first startup job later became a founder who we backed at NextView.
While my high-failure strategy failed often in the process of finding that first startup job, it set me up for many great things to come.
I also find that many of the most valuable but least followed pieces of startup advice also fall into this category. For example:
- Talk to your customers. It’s amazing how founders all set out to be customer-focused, but very quickly stop taking the time for in-depth conversations with their customers. They reason that it’s more time efficient to do other things or to gather feedback quantitatively. But talking in-depth with customers all the time is insanely valuable, especially for early-stage companies. The challenge is that any one customer interaction might not yield very much. In fact, after two or three, it seems like you are hearing the same thing over and over again. So it’s easy to move on. But there is a huge correlation between founders who persist with 1:1 customer conversations and ultimate success of their companies.
- Do things that don’t scale. Often, high-failure strategies are not terribly scalable. Also, people who have only worked at large-scale businesses have a very hard time imagining non-scalable solutions. This is the advantage that early-stage companies have over large businesses. They can cold call companies to try to get their first customer. They can use manual intervention to make up for product deficiencies. They can change a user-flow over and over again because it doesn’t really matter if a tiny set of users have a sub-optimal experience and complain or leave. You can also blow a lot of money on marketing experiments that might seem dumb today, but will only seem dumber down the road when the dollars and stakes are bigger.
- Ship imperfect product. By now, most people have heard Reid Hoffman’s advice that “If you aren’t embarrassed by the first version of your product, you’ve launched too late.” Even founders who are aware of this find it hard to follow. It’s painful to see one’s hard work get obliterated upon first contact with actual customers. But often, there is no faster way to learn, and there is no faster way to figure out the essence of your product than trying to ship it fast. Brian Long, the founder of TapCommerce, is an example of a founder who is outstanding at launching the bare minimum product required to test customer demand. It allowed their team to iterate incredibly quickly during the early days of TapCommerce and hone in on their core product. Eventually, the fast-growing company was snatched up by Twitter in a phenomenal exit for everyone involved.
So, if you’re trying to decide what kind of approach to use when you’re hiring or fundraising or building a go-to-market strategy, stop to consider a high-failure strategy. While it likely will be painful, you will be thanking yourself down the road.
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