For the Best Entrepreneurs Failure is an Option

Buried among all of the articles surrounding Steve Job’s resignation, I found this interesting post in the National Review.  Basically, the post notes that Steve Job’s was a successful entrepreneur because he failed so often.

Actually, as I think about all of the entrepreneurial characteristics that are most salient to success, an entrepreneur’s ability to “fail upward” seems to be the best predictor of subsequent success.  This is something that I see many investors and hiring managers use as a primary criteria.  Has a person overcome a failure?  But, what it is about managing failure that is predictive?

It strikes me that failure provides a number of challenges to a person, and it is in the overcoming of these challenges that personalities are formed and strategies for success are created.  It is not the failure in itself that matters – it is what the person learns from the failure.  But, what does an entrepreneur learn from failure other than “gee, I won’t do that again?”

Failure, or the threat of failure, seems to address a number of aspects of an entrepreneur’s personality.  His self-image is challenged.  His strategy is questioned.  His path to success seems longer.  Overall, it is a dark time.  Yet, when entrepreneurs are faced with failure they rise to success.

The question is why.  My experience is that entrepreneurs fail when others succeed for a number of reasons:

  • They tend of have optimistic outlooks and a positive self image.
  • They have stability in their lives, which may be internally generated, or can come from nurturing or a supportive environment.
  • They are self aware and coachable, so they are willing to take advice and make changes.
  • They are” lucky” in some way.

I think that the role of luck is under estimated, in particular when it comes to a failure becoming an immediate success.  Usually, success in the short term requires something to just break right for the entrepreneur, when dealing with a reversal.  If you ask entrepreneurs in their most honest moments, they will all admit that they were lucky in some ways.  And, then they will quickly add “that they made their own luck.”

The bottom line here, is that good entrepreneurs are adaptable and put themselves in the position to be lucky. And, if luck doesn’t find them immediately, they careen off in a new optimistic direction to find luck another day.

When Steve Jobs left Apple and founded Pixar and NeXt computer he was a great entrepreneur.  When he created a great operating system at NeXt that would become the basis of Apple’s next generation operating system, he was lucky. Lucky that John Scully, the Pepsi CEO who was running Apple, didn’t know how to compete with Microsoft.

I hope that Steve Jobs lives a long time and continues to exercise his entrepreneurial spirit at Apple.  But, however, long he lives, he is a great case study on what makes entrepreneurs successful, and why all of us who are entrepreneurs should be humble.