Turning Failure into Success – A Virgin Entrepreneur Series
Entrepreneurs are famed for flirting with failure and taking risks, but how do you stop yourself from falling into the abyss? Ross Shelleman believes it’s all about trusting what comes naturally to you…
Learning from failure is an important skill that all entrepreneurs and CEOs must master. The key is to learn enough from failure to not repeat your mistakes. Failure is not something to be proud of if you are not learning. Balancing failure with success is also crucial. Fail too much and you might not get the change to fail again.
When we first raised venture capital for Target Data we had many ideas and enough runway to make one large bet outside of our core business. We designed and built an affiliate marketing site. We hired an amazing team and began spending heavily on advertising.
The site was a complete disaster. It was very difficult to drive traffic and we began hemorrhaging cash. We spent more money on advertising with no effect. We were in trouble and it was very clear that the business was not working. It was one of the toughest decisions I ever had to make but after four months we shut the whole site down and laid-off the entire team.
The key learning is that when things are not working you need swift and decisive action. I have watched many companies get into real trouble because they cannot quickly admit failure and correct their course. As painful as it was, shutting down the site saved the rest of the business. We learned the how to quickly change direction and accept that not everything is going to work.
In today’s entrepreneurial culture the idea of failing fast and often is widely evangelized. I believe this is dangerous and would encourage balance. When we shut down the affiliate marketing site it forced us to focus on our core business. We did not have the luxury of failing again; we simply did not have the money.
As markets change companies are going to face tougher scrutiny from their investors and boards. Failure must be balanced by success. Pay close attention to the changing landscape of capital. Valuations are falling and additional capital is coming at a much higher price.
We read a lot about failure in terms of product, technology or market fit. Often overlooked is a discussion around failure in terms of people. One of the most costly failures an entrepreneur can make is hiring the wrong people and waiting too long to change direction.
Asking a key member of your team to leave is one of the toughest parts of the job. Anybody that says they enjoy it or that they feel no emotion is crazy. Unfortunately most of us will fail at this over and over again. What I have learned to do is trust my instincts and those of my senior team, rarely are we wrong. When you start to question if somebody is a good fit it is time to admit failure and make a change.
The balance between failure and success is metaphorically measured in inches. We must constantly ride the edge in order to be successful. The speed at which we operate forces us to make measured bets everyday. There has to be a constant balance between success and failure to be successful. I tell my team all the time a simple saying that my first boss used to tell me about business. One day I went into his office asked for approval on a project I had created. It was a risky and certainly not guaranteed to be successful.
He looked up at me and said, “If we are not tilting the machine, we are not playing hard enough.” This metaphor might be lost on some readers but I love it anyway. Tilt the machine, just not too much.