Common pathway to success: Failure

(Clockwise from top left) Henry Ford, Thomas Edison, Steve Jobs, and Walt Disney
(Clockwise from top left) Henry Ford, Thomas Edison, Steve Jobs, and Walt Disney

Henry Ford, Thomas Edison, Walt Disney, and Steve Jobs are some of the first names that come up when you talk about paragon entrepreneurs of the past century or so. Ask a young founder about a role model for today’s “disruptors,” and she might come up with Travis Kalanick, the founder of the transportation company Uber.

But few people remember that before they succeeded, all five of them failed. Failure is an enormously powerful learning experience for entrepreneurs — yet most are happy to leave it behind them, undiscussed.

“Most people don’t want to have it out there, as part of the permanent record,” says Anand Sanwal, founder of the New York research firm CB Insights. But Sanwal says there’s more entrepreneurs — particularly first-timers — writing blog posts that offer post-game analysis of ventures that didn’t make it across the goal line. “There’s a little more willingness to discuss it these days,” he says. (Here’s a great video of Kalanick sharing his pre-Uber learnings.)

I’d underscore “a little” in that last sentence. Over the past few weeks, I’ve been talking to local entrepreneurs and venture capitalists about what they learned from failure. It wasn’t easy.

Dave McLaughlin says turning out the lights on his Boston video-messaging startup, Vsnap, last year taught him many important lessons. Among them: how tough it is to get the attention of prospective customers. “No one can tell you just how Darwinian the competition is,” he says. A great fourth quarter in 2014 was followed by a painfully slow start to 2015. “There was no pull in the market,” he says. “It was all push, shoulder to the wheel, us educating users.” (Vsnap laid off its dozen employees this past spring, but McLaughlin is still working to sell the company’s assets.)

“Failure,” says McLaughlin, “is an incredible crucible for learning and personal growth.”

Ric Fulop, now chief executive of a Cambridge 3D printing startup called Desktop Metal, was the founder in 2000 of Broadband2Wireless. The startup, which aimed to provide wireless Internet to customers around Boston, raised about $30 million, but was dead within two years.

All startups need four elements in place, Fulop says. First, the technology has to work. Then, he says, “it has to be the right time in history for that technology, you need to have the right team that can solve difficult challenges, and you need to be able to get access to financing.” For Broadband2Wireless, when the stock market crashed in 2000, financiers fled the startup world and the company wasn’t anywhere near profitability. “The biggest thing that is out of your control are the capital markets,” Fulop says.

In 2007, David Chang was co-founder of Mobicious, a Cambridge startup that created a guide to content and apps for mobile phones; the company later got into photo sharing. As the company considered different things it might do, the countries it would serve, and the demographics it would target, Chang says, “we were wide on every one of those dimensions. We decided to be worldwide. We’d look at competitors releasing a feature, and we’d build something to match that.”

Chang says his big learning was it’s difficult — but vital — to figure out where your company should dedicate resources. If you can’t do that, he says, “it makes room for a more narrowly-focused competitor to pick one thing and do it really well.” Mobicious was acquired in 2010 for some of its assets and employees, but Chang doesn’t view it as a success.

For Ben Kaplan, failure was a continuation of his college education, which he put on pause last year to work full-time on a mobile app called WiGo, which helped college students track who was going where on a particular evening. As the Boston startup tried to explore whether the post-collegiate set might use it to plan their social lives, Kaplan says the company just didn’t see “traction and retention” among that kind of user.

Kaplan says WiGo taught him a great deal about marketing an app and building excitement around it — at least on campuses. But ultimately, even before the company ran out of cash, Kaplan decided to pull WiGo from the app stores and merge with a San Francisco startup called Yeti, which also develops apps targeting college students.

“We felt that by combining resources, we’d have the best shot at one of our products doing well,” he says. “A lot of founders keep bashing their head against the wall, trying to shove a puzzle piece into a spot that won’t fit.”

Cambridge venture capitalist Eric Paley recalls that his firm, Founder Collective, backed two transportation startups in 2010 and 2011. One was called UberCab, the other Ridejoy.

Lots of entrepreneurs will tell you that things didn’t work out because they dove in too early — the world just wasn’t ready for their idea. The environment does matter, Paley says, “but we really believe that it’s the entrepreneur’s rate of learning that dictates the outcome. When somebody says they failed because they were too early for the market, they’re really saying they couldn’t adapt well enough to the situation.”

Ridejoy, a carpooling site focused on long distance trips, ran out of gas in late 2013. UberCab, now known as Uber, recently added carpooling as one of several transportation options. Investors value the privately held company at about $50 billion.

Incidentally, in writing this column, I failed.

In early September, I asked my Twitter followers to vote on a list of topics they were most interested in reading about. After receiving more than 800 votes, this topic came out on top. But when I tried to use Twitter to find entrepreneurs willing to talk about their failures, and what they learned — complete silence.

That participatory part of the experiment didn’t work. So I went back to my old techniques: e-mailing, cajoling, calling people’s mobile phones, twisting arms gently. Big learning: even in the age of social media and digital connectivity, some old-school skills are still useful.

Scott Kirsner writes the Innovation Economy column every Sunday in the Boston Globe, in which he tracks entrepreneurship, investment, and big company activities around New England.
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