Equations for Failure

by Nathaniel Whittemore

Published October 28, 2009 @ 02:17PM PT

[Editor's Note: This guest post was contributed by Shalyn Hockey, VP Operations at Assetmap. Shalyn had the chance to spend yesterday learning lessons about failure and success from some of Web 2.0's big names and has summarized what she learned below.]

Entrepreneurs throw around ideas, all over the place, all the time. It's necessary. Some ideas are brilliant, but most are not. Some come too soon, others too late. All entrepreneurs hope to find the idea that is the rose among the thorns, the one that will launch them to virality and an IP0.

But the key is discerning the difference between the truly disruptive ideas and the ideas that are simply bad. Disruptive ideas flip the status quo and write new industry rules. Facebook, Twitter, Google, PayPal, Amazon, all seeded with disruptive ideas. At the onset disruptive and bad ideas may look similar, so the value for entrepreneurs is recognizing fail prone ideas at their onset.

Yesterday 25 seasoned entrepreneurs gathered at FailCon in San Francisco, and bravely took the plunge into vulnerability and shared their experiences of failures. Sounds depressing? Not quite. In reality it was fairly inspiring because people can make failure work for them. They learn and adapt and do it better next time. But that's the wisdom that you can find in any inspirational self-help book. FailCon showed something different beyond how to turn failure into success - it evidenced patterns in all these stories of failure. And as mathematics teaches us, where there are patterns there are equations. And where there are equations, there may be some method to the madness. Knowing when things fail may make it easier to notice and avoid fail prone ideas. So here are my ten equations for failure:

1. 3 Business School Grads + 0 Technical Talent = Tech Company FAIL
2. Right Idea + Wrong Execution = FAIL Every Time
3. Compelling Start-up Story + Lack of Control of Storytelling = Brand FAIL
4. Experimentation with Product + Lack of Experimentation with Process = Organization FAIL = Company FAIL
5. Passion for Your Idea + Inflexible Mind = FAIL Every Time
6. Overly Aggressive Financial Forecast + Un-detailed Financial Model = VC Round FAIL
7. Preparation for Downsides + Lack of Preparation of Upsides = Scale FAIL
8. Craving of Media Attention and Respect + Lack of Strategic Agenda = Focus FAIL
9. Promising Initial Idea + Pushing Product with an ASAP timeline = Product FAIL
10. 5 Great Ideas + Trying to Do Them All at Once = Company FAIL

FailCon in its exploration of failure ended up pointing to success. Some of the entrepreneurs who shared their failure: Max Ventilla the co-founder of Aardvark, Mark Pincus the CEO and founder of Zynga and Max Rafael Levchin the co-founder and former CTO of PayPal, for example, are now wildly successful. But they all credited their success to their failures because they learned and adapted. And in their stories I saw patterns too. And again patters, lead me to think of equations....

1. Understandable + Useable + Useful Product = SUCCESS
2. Lots of Ideas + In the Right Places + At the Right Time = SUCCESS
3. Failure + Learning + Adaption + Failure + Learning + Adaption.....= SUCCESS
4. Good Style + Compelling Voice/Story + User Focused Product = SUCCESS
5. Compelling idea + Diverse and Dynamic Team + Mental Flexibility = SUCCESS

Now of course, the fact remains that most start-ups fail, so success is still surprising.. But it seems like failure does not need to be. There is clearly a huge amount of grey area - the wild card start-ups that vacillates between success and failure. But at least in part, failure can be more predictable than success. It's just a matter of knowing the variables.

Shalyn Hockey is a graduate of Northwestern University, where she majored in Learning eand Organizational Change and International Studies. At Northwestern, she directed the largest undergraduate-run conference on human rights in the country. She is now based in San Francisco as the Vice President of Operations at Assetmap Strategies.