Saturday, September 6, 2014

Failing Better

I recently kicked off a research project on entrepreneurial failure that I hope will result — in a year or so — in a book to be titled False Start. In tandem, with my colleague Shikhar Ghosh, who has been studying the causes and consequence of startup failure for years, I plan to develop a new, case-based MBA elective on the topic.

I've written before about how entrepreneurs' egos can contribute to their ventures' demise. As I kick off my new project, however, I feel motivated to share a personal reflection on failure. Last summer, I gave the commencement address at my high school alma mater, Padua Franciscan High School. I spoke about failure and what we can learn from it. Here's what I said:

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Hello, Class of 2013. Thank you for inviting me to your graduation. And congratulations: you’ve got a lot to be proud of! But I’m not here to celebrate your achievements. I want to talk about your failures — and about how you can fail better.

You can fail better if you follow the example of entrepreneurs. As Father Ted mentioned, I’m a professor at Harvard’s Business School, where I teach entrepreneurship. The most important thing we teach is that three out of four startups fail. Dreams are destroyed; it’s often heartbreaking. But great entrepreneurs persevere, against the odds. For them, setbacks are valuable. Figuring out what won’t work puts an entrepreneur one step closer to a solution that will work. And when an entrepreneur finds a solution that works, magic happens. They create something out of nothing. The best entrepreneurs create something that makes a big difference in the world. Think of Thomas Edison. Henry Ford. Steve Jobs. Oprah Winfrey. You can make a difference in the world too, but only if you accept the risk of failure. And only if you learn from failure. Only if you fail better.

It took me years to figure this out. I hope this talk tonight gives you a head start down the same path of discovery.

My education about failure started at Padua, when I had a reptile brain like yours. Insulted? Don’t be. It’s a scientific fact: compared to adults, teenagers rely more on their amygdala when responding to stimuli. The amygdala is the primitive part of the brain that we share with reptiles. It controls the fight-or-flight response. Adults, by contrast, are more likely to use their frontal cortex, which controls reasoning and allows rational planning.

So, graduates: until you turn 20, if you do something really dumb, you can just blame it on your amygdala — on your reptile brain. Try this on your parents if you dent the family car; I’m sure your father’s frontal cortex will tell him that you’ve offered a perfectly reasonable excuse.

My reptile brain was hard at work when I was at Padua. During my senior year, it masterminded an epic fail. I was the starting catcher on the varsity baseball team. Don’t be impressed. I may still have the lowest batting average in Padua history. So, not surprisingly, about two-thirds of the way through the season, with our team out of contention for league leadership, my coach benched me and put our 2nd string catcher — a junior — into the starting lineup.

Now, our coach was the strong, silent type. He wasn’t big on explanations or reassurance. He didn’t tell me why I was benched. You can probably guess that he was thinking ahead to next year, and he wanted my teammate to get more practice. But through the blind rage and deep shame that surged through my reptile brain, I couldn’t see that. Fight, or flight? My amygdala picked flight. I sulked through the game, and when we got back to the locker room, I announced that I was quitting. My coach just shrugged, and my teammates didn’t try to talk me out of it. They were probably dumbfounded by my shocking immaturity and my self-centered behavior. No one on the team spoke to me for months afterward, and I can’t blame them.

It was a true failure of character. But it took me a while to see it that way, and even longer to understand my mistake and learn from it.  Lance Armstrong, before his own colossal failure of character was exposed, summed up the lesson well. He said, “Pain is temporary. Quitting lasts forever.”

Failure came into sharper focus for me years later when I started studying entrepreneurs. I learned that running from failure, like I did at Padua, is a common response. Our egos are easily bruised, so we often avoid situations where we might fail. But the best entrepreneurs are different. They seek out new challenges and view failure as a necessary part of the learning process. If you can’t fail, you can’t learn. And if you can’t learn, you can’t improve.

Entrepreneurs fail, over and over. Steve Jobs, the founder of Apple, is a great example. He was fired from Apple in 1985, just one year after launching the original Macintosh computer. He said, “The focus of my entire adult life was gone; it was devastating. I thought about running away from Silicon Valley. But I still loved what I did. So I decided to start over.” Over the next eleven years, in exodus from Apple, Jobs led Pixar to greatness. He also launched another computer company that Apple eventually acquired. That set the stage for Job’s triumphant return to Apple in 1996, and for the dazzling iPhone that’s in your pocket.

In 2001, I got a chance to put these lessons into practice — and to atone for quitting Padua’s baseball team. I was up for promotion at Harvard Business School. Like most universities, we have a “publish or perish” promotion process. If you don’t publish compelling research, and plenty of it, you perish. Promotion odds at my school are low: three out of four new professors eventually get fired. So, I was facing the same odds of failure as a typical entrepreneur.

I thought I was in good shape. I was studying internet companies, and a publisher had paid me a big advance for a book about this hot new phenomenon. But the senior professors who reviewed a draft of my book and my other work saw things differently. They said my research seemed like it was done in a hurry; it had a lot of intellectual loose ends. That was ironic, because my book was titled Speed Trap. The book analyzed mistakes that many internet companies made by growing too fast.

My boss told me that I wasn’t being fired — at least not immediately. Instead, the School would put me on probation and give me two more years to try to improve my research. But he added, “There are no guarantees that this will work. You should think about whether you are cut out for this job, and you should seriously consider leaving academia now. You’ve got plenty of good opportunities in the real world.”

I was shell-shocked. You may be familiar with the five stages of grief: denial, anger, bargaining, depression, and gradual, grudging acceptance. We experience these stages when we confront impending death or some other extreme, awful fate. The risk of getting fired after spending seven years trying to reach my goal seemed truly terrible. So, I passed through the five stages of grief. I lingered at anger.  

But I also recalled my regrets after quitting the Padua baseball team. And like Steve Jobs, I knew that I still loved my work. I resolved to not run from my failure this time. I would try to learn from my setback, even though that would expose me to the risk of future failure. My book was finished but not yet printed. I told my publisher to cancel my contract. I gave them their money back, and I kissed goodbye to a year’s worth of work. I put my head down and cranked out better research. I lived on edge for two years, but I got promoted. The pain was temporary, but worth it.

If you want to fail better, accepting risk is just half the battle. The other half is learning from our mistakes. As Henry Ford said, “The only real mistake is the one from which we learn nothing.”

Learning from failure isn’t easy. Our brains are wired up to see what we want to see. As a result, we often ignore signs of failure. And when we acknowledge the signs, we often misdiagnose causes. We are prone to blaming others or events outside of our control, rather than attributing failure to our own shortcomings.

Because our brains conspire against us, learning from failure requires discipline. The Army knows something about discipline, so it shouldn’t surprise us that they do a great job with learning from failure. After every engagement, an army unit runs what’s called an “After-Action Review.” The team asks four simple questions: What was our objective? What happened? Why did it happen? What do we do next?

Great entrepreneurs are likewise disciplined about learning from failure. They rely on the scientific method, formulating hypotheses about their new business and structuring experiments to test those hypotheses. They expect that many of these tests will fail. Thomas Edison knew this when he invented the light bulb. He famously said, “I have not failed. I’ve just found 10,000 ways that won’t work.”

You don’t have to join the Army or launch a business to learn from failure. You are about to enter the world’s best learning laboratory: college. College is a safe place to fail — one that offers tremendous freedom to experiment. This freedom will feel amazing after high school. At college, you will be a blank slate. No one will have preconceptions about who you are or what you can and cannot do. You can reinvent yourself.

Try new things at college. Experiment with different courses. Different causes and clubs. Different kinds of friends. Different jobs. But be disciplined about what you are learning. Approach these experiments with hypotheses, and end them with an After-Action Review. Most importantly, accept the fact that if you try new things, some of them won’t fit. But some will, and if you try, you may find lifelong soulmates. You may find your true calling, your way to make a difference in the world. As Steve Jobs would say, a way to “put a dent in the universe.”

So, Class of 2013, I hope you find great happiness and success. But I hope you embrace failure, too, as a path to improvement. And I hope you’ll live by the words of the playwright Samuel Beckett: “Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.”