Lots of entrepreneurs and startups — most, in fact — deal with failure. But what separates the good from great is, more often than not, how quickly and effectively one responds to the failure.
That was the message from some of the finalists at EY’s annual Entrepreneur of the Year awards gala for the Pacific Northwest in downtown Seattle last week.
We spoke with several CEOs and founders, who talked about their own failures and what they’ve learned for the experiences, which you can read below. You can also see a round-up of the award winners here.
Scott McFarlane, CEO of Avalara: “The first startup I did was in the fitness industry. One of the products that my roommate and I actually were the founders of was Lifecycle, the computerized bikes in machines. It was really hard to change people from their meat and potatoes thing to get on the bike. The ROI was, get on the bike and ride for 30 minutes and you live longer. You ought to be able to sell that, but we could only sell nine machines. Today they sell nine a minute, but back then it was really too hard.
“I had other options and I left after a couple years. My roommate went on to turn it into what it is today and sold the company. He wrote me a letter one time after that, and it wasn’t a mean letter, but it was, ‘see what happens when you have commitment?’ He had more commitment to that idea than I did. I never forgot that message. It turned out to be a really great opportunity and deal, but I wasn’t there to see it. I learned two things: you don’t want to leave too early on a startup thing like that, and no matter what you do, you have to have commitment. I have never forgotten that lesson.”
Ryan Carson, CEO of Treehouse: “I’ve had a lot of failures. My first business was probably my biggest one. It was a company called Flightdeck that made a web app that allowed you to send large files. I learned how not to price a product. We priced it way too high, which meant I had to build a sales team. It was literally just me in the top bedroom, and I suck at sales. We launched another business that was a resurrection of Flightdeck that had a freemium model. That worked out.
“Entrepreneurs should go look in the market and figure out who their customers are and what they are prepared to pay in general. Then, understand that if it’s over a certain price point, you have to have a sales team because people often don’t throw a credit card down to pay hundreds of dollars.”
Karen Clark Cole, CEO of Blink UX: “In order to build resilience to be strong, you have to fail. If you imagine that you fall off your bike, skin your knee, get back up and get on the horse and ride again — all of a sudden that balance issue you had is figured out. I like to look at the Seahawks as my favorite example. They lost a Super Bowl That’s a bummer. But let me tell you, next year they will be stronger than they were last year and if they didn’t have that failure, I don’t think it would happen. So it’s really important to fail in order to build resilience. Every time you do that, you get up stronger and you’re harder to defeat and you’re more bulletproof — that’s the important part. You don’t get that unless you fail. You almost have to look forward to it and embrace it.
“Entrepreneurs have crazy ideas and have no idea if they will work. But if you’re not willing to put yourself out there and try it, and not be afraid of failing, and realize that failing is what you makes you better, then you wouldn’t try it. … Someone asked me if I had any bad ideas. I said ‘No, I’ve never had a bad idea. I’ve had plenty of ideas fail, but they’ve all been great ideas.’ You have to really believe in yourself and be willing to land on the ground face-first into mud and know you can get up. Every time you do that, you get better at getting up and that’s the important part.”
Chris Barrow, CEO of EagleView Technologies: “We’ve had a lot of failures. In fact, I think you have to embrace failure and you have to expect it. It’s like skiing or anything else — if you go ski all day long and never fall down, you weren’t pushing yourself hard enough. We certainly believe that.
We’ve had a number of failures and like any company, we’ve made bad decisions. We’ve been burned by not ramping up certain areas of the business fast enough. That’s probably the biggest thing we’ve failed on: anticipating the quick acceleration of our growth and not building out infrastructure fast enough to be able to handle the growth that was coming. Then we got completely burned and we almost lost customers. That was a big deal.
You have to move so fast in this marketplace and you can’t wait. I have a philosophy: You get 80 percent sure you know what you’re doing, then you floor it. Better done than perfect. Just get to the point where you know what you’re doing, then go as aggressively as you can. More often than not, speed will win over quality, so be the first into the market, capture that early lead, and then don’t let it go. Don’t think you have to wait and get something perfect in order to jump into a marketplace. The benefit and value of being first and being out there quicker than anyone else will most often outweigh the extra features or extra qualities of a product that you could get by waiting longer and being second or third. ”
Stephen Purpura, CEO of Context Relevant: “As an entrepreneur, you fail all the time. In the early days with failure, you can recover from it in a few weeks. But as a company grows and you go through more cycles and become more successful, the stakes matter more and failures cost more. They can take months or years to fix. As an entrepreneur grows, you have to be not afraid to fail in the beginning. Then, be a little more wary of it — but not completely terrified of it — as you get bigger. i=I think that’s best advice. Don’t be afraid of failure. Don’t let it debilitate you.
In the beginning, there has to be failure. There has to be a lot of it and you just have to embrace it. The difference between really great salespeople and everyone else is not that they don’t feel failure, it’s that they bounce back faster. As an entrepreneur, you have to feel it and want it, but you have to bounce back almost immediately. Resilience is the No. 1 attribute of a great CEO or founder.
Sabina Teshler, CEO of SetCreative: “I always say failure is how you become an entrepreneur. I don’t even know if it’s called failure — it’s more about learning from your mistakes. You have to change yourself. That is what it is.
Along the way, when you own a business or have a business, there are so many things you have to deal with: people, clients, product, it goes on and on. But you learn and change yourself around that. Then you can get it to the next level. It’s a good thing. My company has a saying: ‘No fear.’ To get to the next level you have to try new things, do the impossible.
It’s really an emotional thing. A lot of people consider failure a bad thing. When you’re an entrepreneur, and I can’t speak for all of them, but I can say that failure is a good thing. It makes you learn from your mistakes and do things differently and better moving forward. That’s the perspective you have to have. A lot of times I think people fail and never want to try again. That’s not good. You have to face those fears.”
Jonathan Sposato, CEO of Picmonkey: “I’ve failed a lot and started failing quite early in life in number of ways. But what I’ve learned the most is, failures are an opportunity to move forward. They are not as bad as they seem. People don’t actually care as much about your failures as you think that they do. Really the only person you have to please is yourself so you just have to move on. Failure is a part of life.
In entrepreneurism or whatever it is you do, and whatever business segment you’re in, it will always feel like you’re failing. Even when you are actually succeeding along objective metrics like traffic and revenue, you will be failing at something. There’s always something that’s not optimal. That’s just life. It’s really important to not get bogged down by that and maintain a really positive attitude for employees and for yourself.”
Jesse Rothstein (CEO) and Raja Mukerji (President), co-founders of ExtraHop. Mukerji: “If you’re not failing, you’re not trying hard enough. If you want to push the limits, you have to fail and hopefully you can recognize it quickly enough to where it doesn’t actually become a real problem. With that said, the biggest thing I’ve learned is that the rulebook that gets you from A to B might slow you down from B to C, and might kill you from C to D. There’s no formula. You just have to keep reinventing and figuring out what’s working and what’s not and not take anything for granted. It’s one of those things you have to take a step back and understand what’s happening and be dispassionate about it.”
Rothstein: “I don’t think I know anyone who hasn’t failed in one way or another. Raja and I are in the age group that was part of the dot-com bust. We got to take part in some truly spectacular failures.
“As far as what you learn from failures, it depends on the individual. There is certainly the opportunity to learn more from failure than success. It depends on your approach and what you take away from it. Some of the biggest lessons in failure I’ve had to deal with is how to build a team the right way. I try not to make the same mistake twice.”
Jeff McInnis, CEO of SmartRG: “You can’t be afraid of failure and you need to be take some risks. The important thing about failure is learning from your mistakes and not being afraid to admit failure and seek feedback from other people. What could you have done better to help you for the next time?
“For me, it’s because it makes success so much sweeter. You really don’t know what success feels like until you’ve been at the bottom. It’s all about having tried and failed and when you finally get success, you know what it looks like.
“Oftentimes in our company — we’re having a very successful run right now — it’s almost like climbing a huge mountain. There are lots of little stumbles along way, lots of pressures as you grow a company. Every once in a while, you can stop and take a moment and look down mountain to see how far you’ve come. You can celebrate with each other for a couple minutes, and you turn around and charge back up again.
The important thing is to learn — constantly learning from your mistakes and trying new things. Every time, you just get better and better at the little things it takes to execute and be successful.”
[Editor’s Note: EY is a GeekWire sponsor, and GeekWire co-founder Todd Bishop was a member of the panel of judges for the EOY Pacific Northwest awards this year. Jonathan Sposato is GeekWire’s chairman]
