Unless you’ve lived your life in some hermetically sealed cocoon, you’ve made mistakes. We all have. It’s what you choose to do with the knowledge you’ve gained in the process that’s important.
I don’t celebrate my mistakes, but I think it helps to bring them out, dust them off, examine them and learn. We don’t do that enough. Especially in Silicon Valley, where no one has any flops, fails or faults, right? As the saying goes, success has 1,000 fathers, but failure is an orphan.
Confessing our mistakes can be cathartic. What’s more, our failures can serve as the benchmarks that help us get better. “Failure is simply the opportunity to begin again,” said Henry Ford, “this time more intelligently.”
For proof, look no farther than Thomas Edison, Oprah Winfrey, Walt Disney, Colonel Sanders and R.H. Macy. They all flopped one way or another before they got it right.
In the startup game, what we learn along the way is how we ultimately win. I’ve had three stages to my career: The first was my introduction to business working in largely established companies. Stage two was my sabbatical running the nonprofit, Big City Mountaineers, which taught me the importance of marrying my value system to my work.
Stage three comprises my startup experience. I’ve worked directly for four and consulted with a dozen or so more along the way. I expect my startup phase will end up representing the last 20 years of my career before shuffleboard and vacationing on cruise lines.
If Startups Were Easy…
As most start-up veterans know, the odds are stacked pretty high against the entrepreneur. Only about 50% of startups survive five years, even when you’re pretty liberal with your definition of ‘survive’. You want a sobering statistic? According to a Harvard B-school study, three out of four venture-backed startups eventually fail.
Even so, I’m a self-confessed Startup Junkie, and I’m glad there’s no 12-step program to help me recover. Like most serial entrepreneurs, I thrive on the intellectual challenge, the adrenalin rush of innovation and being David up against some corporate Goliath. Entrepreneurs willingly take on some big hairy tasks, even knowing that we could be swept over the cliff at any moment.
Crazy? Maybe. What’s not okay is the insanity of repeating the same mistakes over and over and expecting a different outcome.
To avoid insanity, this post is my contribution to our collective learning process. I was inspired by an exercise at LeadGenius on the occasion of my one-year anniversary. I saw a virgin whiteboard in a hallway and, on a whim, jotted down ‘What mistakes has Mark made in his first year?”. There were some excellent points mixed in with good fun and a healthy dose of snark.
Having others poke fun at my foibles and rookie errors of my first year at LeadGenius, got me thinking about holding a similar mirror up to my last decade working at startups.
This post is that mirror and my attempt to both confess and guide others to help avoid some of my worst blunders.
Loving the People or Product Is Not Enough
Love tends to blind us to reality. When this happens in business, when we find ourselves falling in love with the people or the product and overlooking realities of the job, the market or even the industry, it might be time for a divorce.
I fell in love with healthcare IT. I was captivated by a product that could revolutionize healthcare delivery by allowing computing to move fluidly at the point-of-care. The people in the company were passionate and smart; what I overlooked was the fact that healthcare and medical professionals are laggards as far as adopting technology.
We were trying to move hospital systems straight from client-server computing to cloud-based delivery of virtual desktops, and that was a bridge too far. The result: our sales cycles were 18+ months. While our prospects all waited on the shore for someone else to stick a toe in the water and modernize their bedside computing, we were burning money.
Lesson: Markets have to make sense, and it’s your job to understand all the moving parts to the best of your ability. You have to analyze the industry, people, product and role – and all four need to line up for you to have a shot at startup success. If you find yourself falling in love with one or two of these factors and becoming blinded by the faults of the others, file for divorce!
Leave Evangelism to the Missionaries…
I’m not sure the words evangelical and selling ever belong in the same sentence. But if they do, it’s in the purview of corporate deep pockets. Leave it to them to create new markets. Most startups should stay off the evangelical soapbox and, instead, sell into existing markets.
And yet, you’d be surprised how often I have tried to do so. Three of the four major startups at which I’ve been employed were in the market-making business. It’s because the evangelical sell is intellectually challenging and the dream of success so invigorating that I’m drawn to these pre-revenue, radical ventures like a moth to a flame. Unfortunately, of those three market-making startups that I toiled a collective 11 years, only one has been successful by any measure.
The evangelical sales model is far beyond the Challenger sales model. When you’re asking prospective customers to change everything they believe, you might as well be telling them the sky is green. It’s that damn hard.
Lesson: The enormous inertia in trying to create new markets is a challenge I didn’t understand until I came to LeadGenius. While LeadGenius is bucking the status quo in terms of technology and approach, we’re selling into a large existing market with committed budgets to solve a common problem. Innovative, yes, but we’re focused on solving problems people know they have, are generally unhappy with incumbents and willing to spend money to fix. I’ll take those odds.
Startup Time Is Fast-Forward
When you are an early-stage startup burning cash to try to gain traction, time is on overdrive. And not in your favor. A day is like a week…a week is equivalent to a month…a month is a quarter…and a quarter is a year. You’re in a race against time, and the outcome is stacked mostly against you.
I’ve learned to take time compression very seriously. So much so that when I accepted the job at LeadGenius, I asked to see all kinds of financial reports and documentation—even though I wasn’t slated to start work for a month. I wanted to hit the ground running. What started out as a goal to get up to speed quickly, morphed after reviewing financials and recommending some significant realignments to the business…within hours of seeing the numbers. I hadn’t spent more than twenty hours collectively talking to staff and wasn’t even officially on the payroll yet. Given my past startup experience, my bias toward action and knowing how time can bury a company by not reacting quickly enough to a changing environment or bad decisions, I was compelled to act decisively.
Lesson: Time compression is massively important. If you’re thinking you should speak up about something, it’s probably time for you to escalate and start acting. That’s true for opportunities as well as problems.
Are You the Last One on the Titanic?
I pose this as a question because I’m not entirely certain how to answer personally. Here’s my hypothetical: Your company is in trouble, and you think you know why. What do you do?
- Bail? Lots of Silicon Valley folks have made their careers by jumping ship at the first whiff of a problem with no guilt as to if their departure helps contribute to an organization’s demise.
- Keep re-arranging the deck chairs? I have tended to stay onboard longer and even hung on as an army-of-one trying to prevent the inevitable. In one case when I had friends that had millions invested in the company, I did my best, knowing full well that a single person can’t prop up a failing venture. In fact, I was having a beer with a friend who’d invested when he said, “Give it up, man!”
- Speak out and lay it on the line? Risk your own position or status by skipping rank and letting investors or board members know the reality of what’s happening at their company. I’ve done this too. Between my understanding of time compression and East Coast candor, I don’t hold back. I won’t deny that it’s gotten me in trouble, and even lost a job or two over it, but at least I can sleep at night knowing I did what I could.
Lesson: I suppose there is no clear-cut answer here. We all have to decide for ourselves what decisions to make when a company starts to falter. Integrity, responsibility and accountability are part of the cloth from which I’m cut and guide my decisions when I realize things aren’t going well and could get worse. I have no regrets about speaking up boldly or trying against the odds to right the sinking ship. I can’t help you figure out what you should do if you find yourself in a similar circumstance except to suggest you are true to your values in whatever you do.
Woulda, coulda, shoulda. Even though I’ve made some mistakes and 20/20 hindsight has pointed out some silly decisions, I actually have no regrets in my startup career path so far. Let me end with a quote from Teddy Roosevelt that, despite being quoted by Nixon in his resignation from the Presidency, remains one of my most cherished inspirations:
…The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.
May you find worthy causes, dare greatly and not be timid.