CreditEarl Wilson/The New York Times
It’s a truism in Silicon Valley and elsewhere in the startup world that the only way to learn is to fail. So you need to fail fast, learn from your failure, and maybe pivot.
So I wasn’t surprised to see Chamath Palihapitiya, chief executive of Social Capital, a venture capital firm, in an interview for Corner Office by Adam Bryant for The New York Times repeat these words of wisdom yet again.
What career and life advice do you give to new college grads?
You have to put yourself in a position to learn. And when you’re young, you only learn when things aren’t working.
But with 37+ years of startup experience, including about 10 years of mentoring many startups, I have a somewhat different point of view. There is no doubt you can learn from your failures, but there is no guarantee. Simply failing then starting up yet again is no guarantee of learning nor of success. You need to take time to reflect, to analyze and to discern where you went wrong. Did you target the wrong market segment? Get your pricing wrong? Have the wrong business model? There are so many moving parts in any startup that you when you decide you have failed – or your Board or investors tell you that you have – you need to understand why. Without that understanding you may repeat the same mistakes yet again – I certainly have. With both Mainspring and Throughline I targeted the wrong customers, for example. So before you pivot get your team together and do what we used to call a post mortem. Work your way through the business model canvas of your failed project, learn what has worked and what hasn’t, and then and only then should you start up again.
So yes, I agree that you can learn a lot by failing. But contrary to the received wisdom, you can also learn from success, both your own and others. In fact when I see a company or project succeed I ask myself, or if they are my mentees, I ask the founders, what went right? Was it their timing, as Bill Gross of IdeaLab maintains? Did they catch the big guys napping? (And what happens when the behemoths wake up?). There is more than one way to learn, as Samuel Johnson maintained about knowledge. Knowledge is of two kinds. We know a subject ourselves, or we know where we can find information upon it. So you can learn from your own experience, which may be the best way to learn, but you can also learn from the success or failures of others.
Facebook is a great example of learning from the failure of others. Friendster was the first social network. But as the saying goes, it died from indigestion, not starvation. The founder simply did not plan or architect his infrastructure for the kind of traffic the site generated. Frequent failures finally drove the users away. Mark Zuckerberg had a brilliant rollout strategy that enabled him to build up his infrastructure ahead of user demand. (Facebook started at Harvard, then went to the Ivy League schools, added some other top level schools, opened itself up to anyone with a .edu mailing address, then opened to high schoolers, and finally opened to the great unwashed.) Unlike Twitter, that became infamous for its fail whale, Facebook was extremely robust.
I advise any founder to carefully study Jeff Bezos, one of this centuries most successful entrepreneurs. One trick of his is something I’ve been suggesting to founders for years: write the press release for the product you intend to develop, before you write a line of code. That document is that beginning of your customer discovery process. To the best of my knowledge that process has been burned in as the standard practice at Amazon. And Jeff’s Bezos’ “two pizza rule” is” Never have a meeting where two pizzas couldn’t feed the entire group. In fact there are many best practices out there hiding in plain sight for founders to emulate. As Picasso said, Good artists copy, great artists steal. You can de-risk your startup by copying the best practices of successful companies in large elements of your business canvas, innovating only in a small, but highly focused and highly leveraged area.
Learning and successfully adapting to what you have learned is the secret sauce of startup success – it’s a Darwinian world out there. But don’t confine your learning to your own experience. You don’t get any leverage that way. Stand on the shoulders of others and your reach will be much higher. Yes, learning from trying and failing is powerful, but it’s necessary, but not sufficient. Learn from others, whether your colleagues, your competitors or stories of the failures and successes of others.