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The Art of Failing Spectacularly
[/vc_column_text][vc_single_image image=”79611″ img_size=”full”][vc_column_text]Thomas Edison said ‘I have never failed. I just found 10,000 ways something won’t work’
Not to sound like a fortune cookie, but most of what success looks like, is based on the failures we endured to get there. It is a part of everyone’s story- founders, inventors, artists, athletes. Everyone’s journey to success was paved in some way by the hurdles they faced along the way. They either dared to keep moving forward, or they turned those failures into the best thing that could have happened to them.
In the UK, according to the latest figures from the Office for National Statistics, around 80% of SME’s fail within their first year alone. By 2018, only 42.4% of businesses started in 2013 were still in operation. These are some scary statistics, and show that there is a serious problem in the UK in the way that SME’s relate to their own business setbacks and failures. This lack of confidence is going to hit hard, to the economy and the UK as a whole. Federation of Small Businesses (FSB) states that 99.3% of the business population can be accounted for by SMEs. There is an average of 10.8% overall business closure rate, meaning that at least 632,889 SMEs could potentially be at risk of collapse this year alone.
Those are all just numbers and statistics, however. SME’s are run by people, not computers. There is every chance to turn this around, and show grit in the face of such overwhelming odds. Here are some stories about how these now, proud and successful founders, nearly lost it all.
1. Apple-Steve Jobs
Apple may now be an industry giant, and for some, a necessary commodity in life, but since their founding in 1976, they have experienced their fair share of failed products. They enjoyed a high functioning momentum, then over 12 years, their popularity and innovation took major hits. They had even, at one point during the downturn of 1985, kicked Steve Jobs to the curb. It was only when he returned in 1997, after the company was operating at a loss for years and facing bankruptcy, they launched the iMac and iPod that Apple was put to rights and became the industry icons they are today.
2. Jeff Bezos; Founder and CEO of Amazon
A history of success is no reason to get cocky either! With the success of Amazon in the late 90’s, Jeff Bezos seemed like the superstar of online retailing who was ready to challenge eBay itself. That’s exactly what he did when he launched zShops in 1999. Unfortunately it failed. It wasn’t enough to have the Bezos name attached to the product, and zShops wasn’t different enough to justify a change from eBay. Yet no experience is a wasted experience, and Jeff used what he learned to further develop Amazon’s marketplace. Coming back with a vengeance, Amazon’s better customer service and lower shipping fees have allowed it to safely dominate eBay. However, it wasn’t all smooth sailing from then on. Amazon once faced huge losses due to an overestimation of product sales. After buying 100 million toys in the run up to the Christmas holidays, they eventually had to give half away so they could save on space leading to big losses. Despite all the pitfalls, Jeff Bezos is the richest man in the world today with a net worth of $133 billion, and he understands intrinsically that his failures are what brought him to that point.
“I’ve made billions of dollars of failures at Amazon.com. Literally billions…Companies that don’t embrace failure and continue to experiment eventually get in the desperate position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence.”-Jeff Bezos
3. Arianna Huffington, Founder of The Huffington Post
Arianna Huffington is no stranger to failure and rejection. Her second book was faced with rejection from 36 different publishers. She didn’t avoid failure, or try to circumvent it, rather her understanding of it was, that it is an inevitable entity that should be faced head on and with the confidence and willingness to learn from it.
“My mother used to call failure a stepping-stone to success, as opposed to the opposite of success. When you frame failure that way, it changes dramatically what you’re willing to do, how you’re willing to invent, and the risks you’ll take. I don’t mean you have to try to fail. That will take care of itself. But in my own life, a key component of whatever successes I’ve had has been what I’ve learned from my failures.” -Arianna Huffington
4. LinkedIN– Reid Hoffman
LinkedIn cofounder Reid Hoffman’s first venture into establishing a networking platform in 1997 failed spectacularly. With perfect hindsight, historians may say it was too early to the market and at the time, the internet was not ready for its scale. He said “I discovered it’s most important to get your product above the noise so that people can encounter it. If you’re not embarrassed by your version one release, you released it too late”. In 2016, Reid and his fellow co-founders, sold LinkedIn to Microsoft for $26 billion. He learnt from his failure, and it helped him create his success.
5. AirBnb– Joe Gebbia and Brian Chesky
A true rags-to-riches tale. In 2008 they were struggling to find their niche, and were written off by many big names all across Silicon Valley.
Now this company is valued at $1 billion dollars. However, they were facing the end of the road at one point. Thinking to accelerate their growth and generate more leads, they invested huge in sales companies, hoping that this would put them on the path of building higher brand awareness and increase their revenue. This move saw them accruing thousands in credit card debt. While it worked to generate visits and increased their brand recognition, most of the leads never amounted to any great deals like they were hoping for. The breakthrough came when they entered Y combinator, generating a resurgence in sales while becoming its most valuable company.
6. Twitter- Evan Williams
Evan Williams response to failure and setbacks, is to keep your eye on your end goal. It’s very easy to become once-bitten-twice-shy, but it’s important for founders not to lose sight of their original focus. Evan Williams most successful achievements were actually side projects of two main projects that failed.
Blogger was a side project of Pyra Labs. The project failed when they tried to do both. The funds dried up and they had to let everyone go. Now Evan states that “If I had been more aware back then of the importance of focus, I would have killed the original project way sooner.”
Twitter was a side project of Odeo. Originally a podcasting platform, it later shutdown as it lost most of its business to the newly released Apple’s iTunes at the time. The plan was to make all kinds of software to create podcasts, a directory for discovering them, software to download them. The solutions generated had no unique selling point, and any value created was immediately dominated when Apple iTunes was released.
“When you’re obsessing about one thing, you can reach insights about how to solve hard problems. If you have too many things to think about, you’ll get to the superficial solution, not the brilliant one… So, there is something to be said for knowing when you’re locked in to the right problem. To me, that comes down to the gut. The things that keep nagging at you are the ones worth exploring.”-Evan Williams
7. Paypal– Peter Thiel –Co-founder of PayPal and Venture Capitalist
Prior to his success with Paypal, Peter Thiel lost 90% of the $7 biillion worth of assets he managed for a hedge fund (Clarium Capital), on the stock market, currencies and oil prices. Peter takes an alternative view to failure. Businesses who attempt to attribute failure to just one easy reason are just going to incur new ones in the future.
“I think failure is massively overrated. Most businesses fail for more than one reason. So when a business fails, you often don’t learn anything at all because the failure was overdetermined. You will think it failed for reason 1, but it failed for reasons 2 through 5. And so the next business you start will fail for reason 2, and then for 3 and so on.”-Peter Thiel
This does not mean that businesses should throw in the towel and not take any corrective measures. Rather, it means that we should account for these failures, and when they happen not to make a mountain out of a mole hill. Learn from them, but analyse them in the context of the whole situation. No matter how conscious you are of actively fighting against failure, it is an unknown variable that can hit when you least expect it. You can either roll with the punches and accept the inevitable hits coming your way, or live in denial that you can somehow circumvent any hits at all.
8. WhatsApp-Brian Acton Co-Founder
Brian Acton’s story is that of a Comeback Kid. After leaving his job as the VP of Engineering at Yahoo, he was turned down by both Facebook and Twitter when he went to them for a position. Now, Facebook has bought the app he created all those years later, for $19 billion.
There’s a lesson in Brian’s story. Fear of rejection should not stop you from moving forward. There may come a time when those who initially rejected you, look to you for guidance or help. There should be no shame in rejection, it is a natural part of living in both the real and corporate world. The saying ‘when opportunity knocks’ comes to mind, but in this day and age, if you don’t put yourself out there and knock a few doors on your own, opportunities could pass you by.
9. Nintendo– President Hiroshi Yamauchi and Minoru Arakawa,
The gaming industry would be nothing if not for Nintendo. Their first offering saw abject failure, however, and had to be recalled after only a few months. In 1985, the Nintendo NES launched during a chaotic crisis that saw the collapse of the American video game market. No one was interested in video games; it was all about the personal computers at the time. Yamauchi told his American executives that he believed in the quality of their product, and to launch it in the most difficult market to enter-New York City. This ended with Minoru Arakawa, Yamauchi’s son-in-law, having to take measures to persuade retailers to stock it at no risk to themselves. In the end, Nintendo only sold about 50,000 consoles, half of what they had originally manufactured. It was enough, however, to convince Arkawa that they should go national, and eventually NES and video games were back in business.
10. Reddit-Steve Huffman CEO & Co-Founder
Now, Reddit ranks as the 4th most popular site in America, according to data from Alexa, Amazon’s Web analytics arm. In the beginning, the founders were resorting to writing up fake discussions and, on the platform, just to get noticed by the internet community. Eventually, in a few months the sites core audience grew exponentially to include more than the three founders. In 2006, Reddit was sold to Conde Nast, and Reddit continued to grow, resulting in Huffman stating he regrets selling when he did, as he did not expect it to grow to that scale.
This growth would have drawbacks, however, as the site began to create animosity and unsustainable tension, that ended with the ousting of CEO Ellen Pao. Huffman returned, and with him the belief that reddit was not just a failing company, but a community that needed to be healed. The site generated all kinds of hate speech, and volunteer moderators had been without the necessary upgrades for years.
Huffman fought to bring back the idea of Reddit as a community free from prejudice, and took major action against banning and monitoring for any content that was overtly racist, harmful to a person or animal. In 2017, Huffman brought in $200 million in new venture capital funding, valuing the company at $1.8 billion and had added 300 new staffers that meant moving the company to a spacious new office.
Huffman did not flinch in the face of the company he had created seeing such failures, he simply choose to believe it was his moral authority to move forward and fix what had been broken.
Conclusion
Not everyone will fit perfectly for the roles they want to play in the world, and businesses shouldn’t be forced to fit a mold that does not fit them. Finding a way to create your own place in the world is crucial, and means more than just finding the thing that differentiates you from the crowd.
Scaling a business is a long, arduous process, that is just as much about the mental challenges as the physical. Just because we accept our failures, does not mean we can make it valuable or that we should try to fail. The most important thing is to learn from it, but keep the focus on your original goals.
Written by Waad Asker[/vc_column_text][/vc_column][/vc_row][/vc_section]
