FailCon 2014: Why Failure Matters

It's fine to celebrate success but it is more important to heed the lessons of failure.

  • By Stephen M. Zorio

    It's fine to celebrate success but it is more important to heed the lessons of failure. -- Bill Gates

    According to Bloomberg, a whopping eight out of 10 businesses fail in their first 18 months. However, that failure provides real lessons for entrepreneurs and can ultimately benefit consumers. In the first installment in a series, I discuss the ethos of failure with FailCon's Cass Phillipps.

    Cass Phillipps says while Silicon Valley may have gone a bit too far in how it embraces failure, there are many places in the world in which the taboo of failure hampers the ability to do business.
    by stephen.zorio

    Back in 2009, Phillipps was attending a startup conference that she had put together. In the midst of listening to speakers and founders elaborate on what had made them successful in the tech sphere, she had what might seem like a depressing revelation: She was bored and frustrated. On top of that, she realized that what was being discussed was largely irrelevant to her own experience and not all that useful. 

    Then she had a rather unusual epiphany. 

    "Speakers kept talking about all these cool things they were doing or had done and why it had worked and I realized, 'I don't understand how you got there,' but you can never say that at a conference," Phillipps said. "So in the middle of my own event, I started asking  other attendees, 'What if we required speakers to only talk about their failures and the things they had done wrong in building their startups?' Everyone seemed really receptive to it."

    Thus, six months after that, the phenomenon now known as FailCon was brought into the world. We caught up with Phillipps to ask her about the things she's learned and what she hopes to see as FailCon evolves.

    Q: What are your hopes for the future of FailCon?

    A: It's changing in Silicon Valley, we're going through a weird state where failure is becoming cool and failure is so cool we don't think about its implications. Founders are racing to shut down and write an article about it right away and we have to ask, 'Why are you celebrating? You just laid off 400 people who you promised a livelihood, that is awful.' So in Silicon Valley, this year I am shrinking it. Conversations need to be more intimate and honest and real, just accepting failure has been done here. In Paris, on the other hand, if you declare bankruptcy, you can never start a business again, you're done, so a cornerstone of culture has to change. It's similar in Japan, failure is difficult, so how do you respect their culture but encourage change? So in those places we need to navigate the realities of failure and just to get conversations started.

    Q: What is the value in embracing failure?

    A: If you have a reliable job with a task that's been done multiple times, don't embrace failure, it doesn't work there. But if you're trying to do something new or you're at a startup and innovating on a new UI or interaction, failure is inevitable. I heard in a podcast that the 'Frozen' script was trashed twice, but it wasn't seen as a failure because it's within the creative process. Our new term, 'pivot' is another failure, all I am trying to do is show that a bigger failure is just another kind of pivot. If you're not failing, you're not taking big enough risks or you're not making the best product you can or your risk is really low. We're not very good at communicating with founders who are struggling, we're afraid of them, we say 'I don't want to associate with a failing founder.' We have to give them a way to comfortably fail.

    Q: Do you see a divide between the way men and women approach failure? Is it more useful for one sex than the other?

    A: At its core, I don't think so, the emotional response is the same. Statistically, startups founded by women do better, but those started by men do better when they do better. It actually is really good to invest in women, they're lower risk takers, they move a little slower, but they really do their research. Women don't get flyaway hits, but usually get a return on your investment. I wonder if women are open to smaller failures, where as if a male startup fails, it fails really hard. I do find it a lot harder to get women speakers, I wonder if they're worried about sharing their failures. There's this feeling we still need to build women up, we are not represented equally to male founders, in success especially. There is the fear to share failures because there is not real equality yet.

    Q: What's the most useful failure you're aware of?

    A: I find that a lot of times first-time founders will start a company with a friend or the first person who comes along that's able to do what they need. There was a talk at this year's FailCon, you can find it online, [ed note: see below] by the founders of Parsecco and they came with five questions you can ask your co-founder. While they were on stage they revealed they had gone from a founding team of two to a team of six. Then the actual founders sat across from each other and asked each other these five questions and they made it made it so obvious they shouldn't have founded a company together.


    From 2 Founders to 6, Then Back Again #failcon
    by EZebis via YouTube

    Q: Have you discovered any common themes in the failures you have featured?

    A: Yes, for sure, there are two that are the most common. The one is not understanding your market fit, or building a solution that doesn't have a problem. Building something you think is really cool and realizing after nobody needs it. That was what we suffered from too, we thought our product was cool and we went to the user base and they said 'yeah, yours is better but I am really OK with what I have already.' That's definitely a very common theme. The second is team communication and it's both, are you communicating with your co-founder and, more importantly, are you communicating openly with your team? A founder has to be a leader and not all founders are good leaders. You have to be someone people are inspired to follow and want to follow and not someone who says, 'Just do what I want and get it done.' Instead you have to ask, 'What do you think?' and empower employees. One founder we featured fired his entire team twice, and said he realized the second time it isn't them, it's me. Understanding exactly what you're looking for is important.

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