Failure

October 23, 2014

Reflections

TOUCHOFMODERN

I believe you can learn more from failure than you can from success. And when I say failure, there’s a difference between simply failing in something you do and learning from that failure. I think it’s this subtle distinction that separates whether or not you will continue to learn and grow as an entrepreneur or always have the same perspective.

Today, I want to share three stories of my failures: in building a team, in creating a business and in leading a company.

Building a Team

When you start your first company, you naturally build a founding team of your friends, people that want to take the leap of faith with you. You build a team of people that you can trust, with skills that you think you need. When I brought my team together, I made sure we had design and engineering talent, because I couldn’t program, and I couldn’t design, but I thought I could do everything else. It seemed like a well-rounded team with a solid mix of technical, design, business and finance talent.

In our first company Skyara, the p2p marketplace for experiences, we watched our competitor Skillshare pass us by. We got advice from the founders of existing marketplaces like Yelp and Airbnb on how to build a local marketplace and we knew what needed to be done: get out on the streets, build a community and inch your way forward. But no one had the passion to be a great community manager, and while we tried to build the community, you could tell it wasn’t something anyone on the team really wanted to do.

With our second company RAVN, the activities booking engine, we spent a year building the most robust local activity search and booking engine. We had one of the most comprehensive activities databases in the country. The next step was simple, pick up the phone and sign up businesses. So we started calling, but as the no’s began to grow, the team lost interest in calling and faith that the business was achievable.

They say a start-up dies not when it runs out of money, but when the founding team loses faith. These experiences taught me that it’s not about having passion in your idea, it’s having passion in what you are actually doing day to day, because starting a company is not about what it will become, but rather it’s about the journey that it takes to build it.

Building a founding team isn’t about having a well rounded skill set, it’s not even about having strength in the skills needed to build the business, it’s simpler than that. It’s about having a passion to develop those skills and having the desire to learn them. What I’ve found is that we are all capable of learning and mastering many things in life, but every skill takes time to master, and some simply won’t match with your personality and what you want to do in life. And if you don’t want to do it, you won’t give it that 110% it needs.

A friend from Zulily once told me that it’s not necessarily about being passionate about the idea, it’s about being passionate about what you are doing. For him, what got him excited every day was simply building a great e-commerce company that his customers loved.

Creating a Business

When I took my first step from the corporate world, I did what any former management consultant would do: find a technical co-founder, come up with an idea, create a business plan, build the MVP, launch it and iterate. Sound familiar?

With Skyara, we launched to a great PR success. We had buzz in the community, and well-known Silicon Valley personalities offering unique experiences on the site. We closed a round of financing with well-respected investors and were off to the races. But when all was said and done, we never learned to separate the hype of the start-up world with the realities of truly creating a business.

It took me two years and burning $800,000 before learning that building an Internet company in Silicon Valley doesn’t mean that you’re a tech start-up. If you think of my past companies, they had very little to do with tech, tech just enabled them.

Creating a business, a real business, means being methodical, understanding how you will execute each step at a very detailed level. It doesn’t mean simply writing a pitch deck with your market sizing, the competitive landscape and your value prop. It doesn’t mean building a product, launching it to the world, and hoping things will happen.

It means taking control of your own destiny – breaking down each problem to success in its simplest form and figuring out how to prove to yourself that you understand how to solve it. Your first company, when you may not know what you’re doing every step of the way, is all about maximizing your chance of success.

James Currier of Ooga Labs once told me there is rarely such a thing as a unique idea. Almost everything has tried before, and it is your responsibility to learn the history of your idea and your industry. The leading tech companies that you think of were not unique ideas; almost all were simply clones that were executed better than those who came before them. Learn to respect your competitors, both past and future. Understand how they got to where they are today, what metrics they had when they started, how luck shaped their thinking and what mistakes they made as they grew. Don’t re-invent the wheel.

Leading a Company

Pitching a high growth startup as a former management consultant is almost like a culmination of what you’ve learned in your early career. You build the perfect story coupled with confidence and charisma, and present to some of the smartest investors in the community.

With TouchOfModern, I went into fundraising for our Series A supremely confident. We had great traction, knew exactly how we were going to scale and our metrics were some of the best in the industry. And yet, meeting after meeting, I couldn’t close the round. I blamed it on the frivolous lawsuit from Fab, the conflict of interest that wiped out access to 90% of the capital in the valley, the idea that the industry we were in had lost favor in the community. But in reality – excuses are simply excuses – results speak for themselves.

There’s never an experience quite like being asked to step down as CEO from your own company, but it is certainly the most humbling experience I have ever had in my life. Being a great CEO of a company means putting the interest of the company first, ahead of your own interests and certainly ahead of your own ego. You need to play to your strengths and above all, admit your weaknesses. Be open and honest with your team and trust that they will do the same with you.

Bobby Lent of Ariba once told me “hire to replace yourself.” In order to build a company that succeeds beyond your own capabilities, you must first admit that there is always someone better than you at your job. It is only when you can admit your own weaknesses that you let your shortcomings be filled in by others, and learn from others how to build them as strengths for yourself.

I hope these three stories of failure were insightful. Starting a company is about having the right mentality, about accepting risk, and about being open to challenges. So here are my three lessons for you.

1) Build a team that is passionate about learning the skills needed for the idea that you want to pursue. Stop worrying about finding the perfect team or coming up with a unique idea.

2) Be methodical and always think about what you can accomplish with the resources that you have. Stop thinking about what you might accomplish with the resources you think you need.

3) Check your ego at the door and admit your weaknesses. Stop believing that you think you can do everything yourself and learn to trust your team to complement your strengths.

You will get much advice if you decide to pursue a career as an entrepreneur. As always, take everything you hear with a grain of salt because the lessons you learn are always unique to person who is sharing them. These are the three lessons I have learned and carry with me. While I usually believe that the only lessons that stick with you are the ones that you learn for yourself, I hope that perhaps hearing some candid stories might help them stick with you as you continue to grow.

 

One Response to “Failure”

  1. Paula Campbell Says:

    Great read. I am a big fan of Clifton Strengthsfinders as a great exercise for honing on strengths and filling in gaps. It’s a fantastic and amazingly effective way to draw on team strengths and truly understand what drives others based on what they view as important.

    Reply

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