One of the companies that I admire for their entrepreneurial philosophy and their marketing prowess is 37signals, makers of Basecamp, the popular project management application (among others). I enjoy reading their stuff and listening to their interviews, talks at conferences, etc. However, like anyone paying attention, I frequently disagree with their conclusions. This is no accident: they put controversial stuff out there to get links, pageviews, etc. That’s working for them, and I don’t begrudge them that, because their points are good and they raise good questions that go against the grain. That’s something we need more of, not less. However, sometimes their points are damaging and should be called out as such.
37signals’ founder Jason Fried likes to say that it’s not worth thinking about failure, or trying to learn from failure. There’s a million ways to fail, so why waste time obsessing over them? Why not just focus on what has worked for you, and do more of that? For now, ignore the fact that there’s also a million ways to succeed. The point he’s trying to make has a grain of truth to it: it’s sometimes not worth obsessing over a particular failure so you can avoid that failure again. The problem comes when you have an inability to differentiate between external failures and internal failures. If you failed because the market shifted or a competitor thrashed you or you got hit by a proverbial bus, then it might not be worth dwelling on, because it probably won’t happen that way again. But if you failed because of some flaw in your execution as an entrepreneur, or some flaw in your personality, you’d be foolish to ignore that, because you’ll probably keep making that mistake over and over again. If you failed because you ignored market demand and just started building something that it turns out no one wants, that’s an internal failure, and one you should definitely correct.
Most startup failures are probably due to the small set of internal causes, not the huge set of external ones. As PG has stated, most startups fail because they run out of money before they make something people want. We spend too much money and not enough time trying to discover what people want, we don’t launch fast and get customer feedback (because they want it to be perfect), and we don’t pivot to new ideas when we should (because we’re attached to the one we have). All of these are patterns of failure that startups make over and over, and without being willing to learn from failure, we’ll just keep failing in these ways.
Finally, without any self-assessment, most companies will find it difficult to grow beyond their current position. When we talk about failure, we often think of the business collapsing, but a failure can be much smaller, much simpler, just a simple mistake. It’s incredibly arrogant to refuse to ever evaluate your decisions and whether they’ve been the best, and how you can learn from them and do better in the future.
You’ll find it very difficult to grow from $1m / yr to $100m / yr without any self-reflection or introspection on what’s working and what isn’t. But I suspect even the guys at 37signals know this.
Book recommendation: Failing Forward, by John C. Maxwell