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Stories of Personal Business Failure

by Guest on March 2, 2013

Pat Larsen is a former Navy helicopter pilot and investment banker.  Now a freelancer (www.getintoivy.com) and writer (www.patricklarsen.com) that travels with his growing family.

2009.  I wanted to build a service for VC/Angel investors and Startups.  I wanted it to be about video content delivery (“Please Give me Money”) and about a semantic search algorithm (“Who Should I Give Money To?”).  I found that I was able to convince 9 people to work with me for free and we produced very nice interviews of entrepreneurs explaining their businesses.  However, the model was wrong.  Our customer couldn’t pay (pre-funding).  Our other customer wouldn’t pay (“I already see too many pitches”).  Our costs would be large (video production, hosting, programming).  So, it’s a necessary service – just look at how fragmented the market still is – but I wasn’t able to solve it.  We operated for about 3 months, then stopped making videos.  Failed.

2011.  I worked with a medical startup.  We raised money, filed patents, talked to doctors, made prototypes, made videos, conducted small trials.  We were going after a large indication that would be a billion dollar market very easily if we got the product to market.  However, we didn’t have a treatment or indication that could be approved quickly.  That requires lots of time and capital and expertise.  We didn’t build the right team.  We didn’t realize what had to be done until too late.  So, in the end, we weren’t able to continue raising money.  I didn’t realize that we weren’t in the “heal people” game- but that we were in the “raise money” game.  The company unraveled.  Failed.

So, I learned a great deal from both those experiences.  I learned that I have charisma and can lead.  I learned that I’m capable of making complex ideas simple.  I learned that I’m able to stay organized and execute.  I learned that the team makeup matters so much.  I learned that money burns so quickly in a startup. I learned that you can sell yourself on an idea to, become blind to what’s going on.  I learned that fear and uncertainty are your daily companions in entrepreneurship.  I learned that I am woefully ignorant in many, many areas of business.

I’ve also had a very, very nasty car accident.  That experience probably kept me from killing myself as I went on to ride motorcycles, fly planes and helicopters.  It taught me life saving caution without sacrificing too much adrenaline.

So, how do we learn from failure?

Success: What Not To Use as a Guide

7 Habits: if you take all the failed entrepreneurs, did they also not exhibit these traits? “Oh, if I just think win-win while being proactive, beginning with the end in mind and putting first things first- I can’t fail!” Keeping these factors in mind can be helpful, but they can also add nothing.  Is the NEGATIVE true?  ”No one who failed had this trait”  ”No one who succeeded had this trait”  Traits are a bad guide.  Habits and processes are a bit better.

Do you know why you can improve in sports so fast?  Because sports lend themselves to immediate feedback loops and precise coaching is available.

Do you know why you can’t learn business, relationships or life that fast?  Because of a lack of immediate feedback loops and precise coaching.  Still, mentors and good education can help – but they guarantee nothing.

Let Us Celebrate Failure

Failure can be a reliable guide in a way success cannot.  Failure will be true across geography and across time.  If you want to heal a person, one thing you should absolutely not do is obstruct their airway for 10 minutes.  This was true 10,000 years ago in the Indus river valley, it is true today, it will be true tomorrow (until we become cyborgs).

That is the power of failure.  Every documented, disseminated failure adds positive knowledge to the world and improves the chances of success for all of us the next time around.  I do concede that chasing success is useful because it motivates people towards action, and lots of random activity will generally produce a net positive.

Entrepreneurs that fail should be celebrated – but instead we only celebrate the lucky.  Those whose success we can learn so little from.  Go ahead and try to start the next Exxon, Apple, Google, GE, J&J, Toyota.  You can’t.  But, if you watch how the 90% of startups fail, you will dramatically increase your chances of success.  Share your failures – you’ll learn faster and you’ll help others.

Learning from Mistakes – Your Own or Another’s

Head in Hands

You need to start doing things, trying things out, and testing out assumptions. You need experiment, observe, and document in such a way that you capture, dissect and understand the inevitable failures that come along the way.  It’s really effortful, but really useful.  Read case studies and biographies and consume as much life and business experience as possible.

This is what airlines do after accidents. As a result, each crash actually makes the rest of us safer (black box, complete reconstruction, complete audit, 3rd party investigation, dissemination of lessons and drafting of new rules).

I keep 3×5 cards of daily to-do lists.  I keep 3×5 of daily gratitude reflections.  In this documentation, I can also capture my failures in a very granular way.  Digital has less impact- we are physical beings.

Let Go of Your Fear of Failure, Go Do

“I honestly think it is better to be a failure at something you love than a success at something you hate.” George Burns- actor, comedian, and writer

Our broken education system teaches us to regurgitate book learning.  Everyone knows that the answers to life are not in books and yet it is all we study and all we are evaluated on.  Fear of “F’s” and fear of Failure drive us from age 10 to 22 (at a minimum).

A failure in school didn’t ruin your life and a failure in life won’t ruin your life either.

If you are not doing things that cause failures, you are not learning. If you are not learning, you are not growing – you are not living.

Best of luck with all your failures.  They will lead to your greatest successes.

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Great “Failure” Quotes here at Brainy Quote: http://www.brainyquote.com/quotes/keywords/failure.html

Photo by Tinou Bao

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