Failure Modes

This was a rich month for the deadpool. Prim shut down. So did CarWoo. And much-hyped Outbox. And even moot’s Canvas/DrawQuest, which had 1.4 million app downloads and 400,000 monthly users. All part of the game, right? The circle of startup life, or something.

It’s a truism that most startups fail. But in fact most startups don’t even get to fail, in the way the word is most commonly used in Silicon Valley. The “failures” listed above were, by any reasonable standard, astonishing successes; like athletes who almost-but-not-quite qualified for the Olympics. Most startups never get anywhere near as far as that. Most startups disappear without a trace.

I saw Inside Llewyn Davis last week, and it has haunted me since, mostly, I think, because it’s a brilliantly told tale of abject, anonymous failure, and you don’t encounter that much nowadays, especially in the Valley. Not that we ignore failure. No, the relationship is much more awkward than that. Instead we make a point of celebrating it…as long as it’s part of narrative of struggle which ultimately ends in success.

But the cold hard truth is that most people who fail don’t succeed in the end.

Every creative field â€" music, movies, books, art â€" follows a power law, and startups are no exception. (Of course startups are a creative field. They bring into the world richly valued things which did not exist before. That’s why they’ve become so culturally compelling; they’re perceived as combining the coolness of the arts with the filthy lucre of business.) And like every creative field, the startup ecosystem is hit-driven; a few massive successes balance out the vast teeming majority that nobody but a handful of people, or maybe, a few thousand, ever heard of.

For almost every artist/entrepreneur who succeeds â€" within or beyond their wildest dreams â€" there are 10 more who were just as smart and talented and worked just as hard but who got hit by bad luck, or were the victims of bad timing, or simply dug where there was no gold. What’s more, the super successes almost invariably got very lucky several times over. (Page and Brin would have sold Google for $750,000 back in the day. Drew Houston had higher ambitions; he would have taken $1 million after tax for Dropbox. They were lucky nobody took them up on that.)

The Valley says, “It’s OK to fail, you learn from it.” But what they really mean is, “it’s OK to fail once or twice, maybe thrice, after you’ve had your big break. But don’t push your luck much further than that.” (There are exceptions, of course, but by definition, they’re exceptional.) Again, just like any other hit-driven industry. Your big break is your first movie, your first book deal, your notice that you’ve been accepted to Y Combinator. After that you’re an insider, you’re part of the industry, looking out from within the walled garden, and you’re afforded two or three more kicks at the can before people start forgetting to return your emails.

The thing is, this is all totally fair.

Because the walled garden is too small for everyone; and if you fail repeatedly, while you learn from those failures, others are learning from their success. How to handle growth, how to cut deals, how to use media attention, how to hire good employees, how to acquire and be acquired, how to ride the fabled hockey stick, how to use each success as a springboard for the next. All lessons that you are not learning while doing your best to overcome the collapse of your latest dream.

Failure teaches you a whole lot of important stuff once, yes â€" never trust someone who’s never failed at anything, you don’t know if they’ll collapse or explode â€" but the second time? The third? You just keep falling further behind, while those who were lucky enough (and smart enough, and dogged enough) to succeed are avidly learning how to run faster.

Personally, I’ve always been horribly fascinated by failure; at the same time, I’ve had a weird knack of avoiding it. In the midst of the dot-com boom I quit a software consultancy heading for an IPO to go write novels, and it was universally understood that I was choosing failure over success â€" until that consultancy went from 110 employees on three continents to four evicted co-founders in the space of eight months, while I sold the book I wrote and spent six years as a full-time novelist. Now I write software for another (far more secure) development shop, effectively selling picks and shovels to would-be miners of this new gold rush.

Some of them have been quite successful. Some have not. Sometimes our clients drive me crazy, but I understand why. I always wanted to be a writer, to the extent that it used to be almost physically painful to walk into a bookstore. In the same way, today’s founders hunger for success. They’re starving for it. And they’re terrified of the prospect of failure.

But just like all other creative fields, most of the hungry hangers-on on the fringes of the tech-entrepreneur industry will never, ever have a real hit. The difference is that this industry is so big, so lucrative, and so fast-growing that they can stay semi-gainfully employed in it indefinitely. Is it better to always be hungry, and always be frustrated, or accept that failure was your lot, and move on? I’d say the former, but then I would, wouldn’t I?

I do believe, though, that those who have tried and failed to build their own dream make for the finest startup employees, the best sergeants and lieutenants, as long as you can make them feel that the enterprise they are joining can in some small way become their own. I would always choose someone who has failed repeatedly over someone who has never really tried to achieve anything. If nothing else, failing again and again teaches you how to keep fighting; and while helping to build someone else’s dream isn’t anywhere near as rewarding as bringing life to your own, it’s miles better than not dreaming at all.