Failure is sexy. In fact, the normalization of failure has become so commonplace, that there are conferences dedicated to failure and a few companies have gone so far as to create the position of Chief Failure Officer. But make no mistake, nobody enjoys failing. I know this all too well. Because I buried one of my greatest failures deep beneath the cover of time for nearly 15 years.
In my 2nd year of business school at New York University (NYU), I decided to become a start-up entrepreneur. It was 2004 and the dot.com boom had suddenly become the dot.com hangover. Nevertheless, many of my MBA classmates would linger after class and trade stories about start-up sensations the way grade schoolboys traded baseball cards. They still wanted to chase the start-up dream. And I was no different.
I was a market researcher by day and an entrepreneur by night. Over three months, my co-founder and I spent countless late nights brainstorming, deliberating and designing. Our concept was simple, yet elegant. A technology platform that enabled local merchants to connect with local people. A kind of Yelp before Yelp. With a 30-page business plan in-hand, an expensive wireframe and a rehearsed pitch deck, we ventured out into the New York merchant community to pitch it to customers. Only it didn’t go the way we planned.
Merchants were reluctant to take meetings with us. When they did, the killer feature, which we thought would woo them, was received with ambivalence. So, we redrafted the concept, rewired the frames and improved our prototype. And after several months of retooling, we were still unsuccessful at convincing merchants to join. With funds dwindling and confidence shaken, I reluctantly abandoned the start-up dream in exchange for my MBA diploma and a familiar, corporate job.
Failure was not easy. I would spend years in professional hibernation before I was ready to examine what went wrong. But after exploring what went wrong, four pieces of practical wisdom emerged that have become useful guiding principles. It’s what I share with corporate entrepreneurs, budding start-ups and what I follow myself today.
Don’t Fall in Love with Your Idea
Love the process more than the idea. Otherwise, you will end up heartbroken. Most people believe that start-up success is premised on a single, flash of genius. The truth is that innovation requires iteration. And that means your initial concept is merely a creative muse and should be viewed as a starting point, not an ending point. Where I went astray, is that I fervently protected my concept. So much so that I perceived every critique from a peer or customers as an insult. I took it personally. Thus, I shielded the idea from judgment and dismissed criticism by reciting Henry Ford’s famous quote:
“If I asked my customers what they wanted, they would have told me it was a faster horse.”
By falling in love with my idea, I stunted its growth. Today, I treat each idea as a raw material that will eventually become a finished good. I put more emphasis on testing, learning and iterating. My own personal rule of thumb for an idea is that you should aim for a minimum of five iterations before you take your idea out on its first date. Learn to love the journey and not the idea.
Listening versus Pitching
Impetuousness is a byproduct of immaturity. When my partner and I set out to test our concept with customers, we rushed our customer interactions and treated this experience as just another step in the process to get to market. And when we met with customers, we tended to speak at them rather than with them. We were busy pitching our concept and overlooked what our customer really cared about. Inevitably, we missed out on the insights that could have reshaped the DNA of our start-up business. If there is one thing that I would urge every upstart entrepreneur to do, it’s the importance of listening, not just hearing, your customer. To do that, start thinking of yourself as a part-time ethnographer. Commit to studying the habits, tendencies and needs of your customers. The moment your customer becomes an abstraction is the moment you lose touch with your business.
The Importance of Cognitive Diversity
Finding a business partner is like finding a spouse. Only harder. When I began my search for a business partner, I looked for someone just like me. But what I discovered was that having two people with very similar thinking styles can create tension and, in our case, introduced blind spots that contributed to our undoing. It’s important to share the same goals when you are leading a new venture, but you also need cognitive diversity. “Cognitive diversity is defined as differences in perspective or information processing styles. It is not predicted by factors such as gender, ethnicity, or age.” Now more than ever, the eclecticism of your team will be the strength of your team. Corporate innovators and entrepreneurs must explore and recognise one another’s thinking styles and find creative ways of expanding the diversity of your team so that your differences become your strengths. Cognitively diverse teams will solve problems faster and overcome adversity quicker.
The Power of Small
We started out too big. From the outset, our plan was to build a full concept and a high-resolution prototype in order to test it with customers. When I presented our concept to customers, I ended up testing the whole idea rather than the riskiest parts of the idea, or the killer assumptions. When customers rejected the idea, it was difficult to pinpoint the precise weaknesses. As a result, when we redrafted our concept, we were speculating on what needed to change. We should have tested individual assumptions and adapted as we went along, rather than building out a full concept. With this experience, I have changed my own personal approach to innovating: small, fast behavioral experiments that anchor to learning and push constant iteration. Small behavioral tests provide rich insight and enable innovators to launch start-up concepts in fast and disciplined ways.
Regardless of what people say, it is painful to fail. But failure isn’t all bad if it goes beyond a buzz word. Break downs are a prerequisite to breakthroughs. And if we don’t shy away from an earnest examination of our mistakes, we increase the chances that we will move faster up the learning curve and the success curve. While I share these principles with innovators embarking on the entrepreneurial journey, I also live by them myself. After 15 years, I am yet again chasing my own start-up dream. By applying these principles, I plan to make my next story about a start-up success.