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Summary:

Most of us learn more from our mistakes than from our successes. In fact, it is the process of making mistakes, and discovering the many things we do not already know, that leads us to our ultimate success. This is why experiencing and embracing failure is […]

Most of us learn more from our mistakes than from our successes. In fact, it is the process of making mistakes, and discovering the many things we do not already know, that leads us to our ultimate success. This is why experiencing and embracing failure is such an important part of being a founder. “As Robert Young wrote on GigaOM in January”:http://gigaom.com/?s=Opportunity+to+Fail,
it is critical for founders to understand that *failure, in this case, bankruptcy, is a great opportunity to learn.*

A former mentor, and a very smart man, once told me that the greatest invention in this democracy and capitalist system we live in and know as the United States is, of all things, bankruptcy. Yep, bankruptcy… the opportunity to fail.

I mention this because I believe Jeremy Liew, venture capitalist at Lightspveed and subsequently, James Hong of Hotornot.com, posted some “must-read” thoughts and observations on this topic. In fact, I would encourage every entrepreneur to read what “Jeremy”:http://lsvp.wordpress.com/2007/01/24/failure-is-an-option/ and “James”:http://james.hotornot.com/2007/01/do-you-have-balls-to-try-part-i.html just blogged.

Simply put, we live in a country that encourages dreamers to take risks, and the laws protect those “entrepreneurs” from the potentially excessive consequences of failure. Bankruptcy laws enable risk-takers to protect themselves and start over. There is no other nation on this planet that by its very by-laws fosters such an economic environment. This spirit, the acceptance of failure, while counter-intuitive, is crucial to this country’s enormous success within the world economy.

Consequently, it’s not a coincidence that in the world of technology, having some failures under your belt is actually a badge of honor. It means you’ve been around the block — you’ve made mistakes, ones to learn from — experiences that will make you stronger the next time around. In fact, the incredible and rapid rate of technology innovation almost requires that any entrepreneur worth his or her salt fully embrace failures as a very normal and acceptable part of the journey.

And as Jeremy and James implicitly advise all those dis/interested observers, who are unwisely kicking those who recently failed when they’re down: be warned, if your goal is to succeed, chances are 99 percent that you’ll experience failure along the way. And when the inevitable happens, let’s hope your peers are not as naïve and self-unaware as you’ve been.

It seems weird, I know. The ability for a U.S. entrepreneur to go bankrupt is actually the most important element of this country’s economic success and wealth. It’s a great example of why I love counterintuitive thinking.
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_For more on how failure benefited some (now) big names in tech, see this April 2007 feature from our colleagues at_ “Business2.0″:http://money.cnn.com/magazines/business2/business2_archive/2007/03/01/8401031/index.htm

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  1. Excellent post!

    Reminds me of an article I read sometime back about the fabled “inability to admit failure” in Silicon Valley. The writer presented it as some sort of syndrome. I think that it was really just an acceptance that dwelling on failure is essentially useless.

    We all have battle-scars. The question is, do we move on or do we debate the wheres and whys?}

  2. It was great post that i had used as the basis for my posting at http://mobchina.blogspot.com/2007/05/going-from-many-failures-to-great.html .

    Its never easy to fail and then rise again. It takes more than just courage and positive will power. How many will rediscover themselves again?

    But the most important thing is not to lose the dream and passion. You can lose everything but not your dream and passion.}

  3. johnbradford Monday, May 14, 2007

    Lots of great points. The current bankruptcy laws, and certainly perception, in the UK (and the rest of Europe I believe) is rather different.

    Fear of Failure is much higher for many here, though there are obvious exceptions that prove the rule.

    I guess if your dreams and passions *are* the business then business failure becomes a pretty fundamentally personal failure. I think this is a critical difference between a ‘professional’ business and a ‘lifestyle’ business; the ability to separate the personal from the professional, not to be a cold hearted capitalist but to give yourself the protection against failure.}

  4. Fear of failure
    Fear of Bankruptcy
    Its all boils down to ones ability to deal and not dwell on the fear.

    I had the pleasure to sit and watch a few minutes of a cheesy movie over the weekend where one character said to the other as they sipped a brew on the balcony of a plush pad:
    “Life is a series of decisions you make and should never look back on”.

    Cheesy movie but that statement stood out to me.}

  5. seanomalone Tuesday, May 15, 2007

    Great quote.}

  6. You may remember the legislation that passed in recent years that made it more difficult for people to declare personal bankruptcy. I think it is a fairly natural and kneejerk reaction (if you have never been bankrupt before) to think that stricter rules on declaration can be nothing but a good thing.

    But you bring to light the other side of the argument very eloquently above. The US is not only the land of opportunity, but the land of second opportunities.

    Another, similar quality of our economy is the ease with which we can fire people. Just goes to show that making something unpleasant easier to do sometimes works out better for everyone.}

  7. John Bradford: Since 2002 I don’t think it’s fair to suggest the UK bankruptcy laws are too scary :) In most cases bankruptcy is over in 12 months, whereas it used to be years. Brown might have done some bad, but when it comes to startups, he did a lot of good that not many people are recognizing (taper relief on selling assets is a biggie.. sell your company after 2 years and pay 75% less tax!)}

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