Most startups will fail. Everyone in the startup community knows that failure is a more common occurrence than success. Silicon Valley has become so enamored by the “value of failure” that rumors suggest they are considering handing out merit badges for failed entrepreneurs. Just how common is startup failure? Harvard researcher Shikhar Ghosh cites that 75% of VC funded startups fail to return a single dime to their investors. So why do we hear so little about failed startups in Minnesota? Are we too “Minnesota nice” to brag about our failures?
SimonDelivers had launched as a online grocery delivery business in 1999 at the height of the Dot.com boom. By 2001 many of their competitors had imploded in the Dot.com bust. Miraculously SimonDelivers had managed to be one of the few that weathered the storm only to be later caught up in the real estate bust of 2008. Often times we can learn more from failures of others than from their successes. This story is a glimpse into the lessons learned from the failure of SimonDelivers.
Last week I gave a presentation to a class of undergraduate students from the University of Minnesota’s Carlson School of Management. The discussion was centered on the topic of failure and how the fear of business failure is relative based on where we live in the world. The students have spent the better part of the last year working on their startup business ideas and I was impressed with what the teams were able to accomplish and where they had admitted their failures. During the discussion one brave student admitted that he had felt a fear of failing during the course of launching their student business. When asked why he had explained that all of the students knew which projects from the previous year had done well and which had failed. He didn’t want his project to be on this year’s list of failed projects. He was interviewing with potential future employers and he wanted to be able to talk about his success.
Over the last year I have done several posts on the importance of mentorship and I am continually surprised by the feedback of how few organizations are investing in a formal mentorship program. In my work driving innovation and new business development I have always found mentorship to be a critical element for success. Today, I published a piece in the entrepreneur and small business publication Under30CEO on the importance of mentorship in driving innovation work. The article focuses on how mentorship can help drive better innovation results, build stronger innovation leaders, and retain the institutional knowledge gained while driving innovation. I conclude the article with 6 elements that I have found to be vital for a successful innovation mentorship program.
Last month Inc. magazine ran an article titled “Why Silicon Valley Loves Failure” about how failure has moved beyond a buzzword in the land of Internet startups. The author (Eric Markowitz – @EricMarkowitz) shared the story of mid-’90s entrepreneur Kamran Elahian. Elahian had custom plates for his Ferrari F355 made with the word “Momenta.” Momenta was the name of a company that he founded in back 1989. Great, so what you say? There are thousands of Silicon Valley entrepreneurs who drive around with their company’s name on the vanity plates. The interesting point was that Elahian chose the name of his previous company that had already gone bankrupt back in 1992. When ask why he chose his failed company, Elahian responded with “It’s to remind me not to be too proud. Unlike other entrepreneurs who put the names of successful companies on license plates, I decided to put my biggest failure. That way, I have to be reminded of it every time I get in the car.” He had moved beyond accepting his failure to being proud of his failures (see my post on the idea of a having a Failure Resume).
Back in 2009 Silicon Valley entrepreneur Eric Ries (@ericries) had coined the term “pivot” for the technique used by tech startups to change the strategic direction of their companies based on what they had learned (see his original post here). The theory goes that by doing you are actually learning something along the way (see my previous post on learning from feedback loops in systems thinking) and that you might find the “something” that you had learned has a better chance of success than your original strategy. The alternative is that at least it will enable you to extend your organization’s runway further out into the future in search of success.
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