Henry Ford dreamed of mass-producing cars. So he started the Detroit Automobile Company … and it flopped. Oprah Winfrey was fired from her first job at a TV station. Before she dominated the world of fashion, Vera Wang failed to realize her original dream — making it as an Olympic figure skater. And before he rallied the world to fight Adolf Hitler, Winston Churchill was fired in 1915 as head of Britain’s navy.
Examples like these are everywhere. Success is built from the blocks of failure. “Failure can be the greatest gift,” says Michelle Payne, a leadership coach and CEO of Sacramento-based SEE Strategies. “I see this with all my clients. Maybe someone gets laid off, or the job gets eliminated. It’s painful, but fast-forward six months or a year later, and they’ll look back and say it’s the best thing that ever happened to them.”
Yet most of us dread failure. We’re embarrassed by it, almost like a body odor. So what, exactly, makes failure useful? Clearly not every failure is a blessing in disguise. (Try saying “Look on the bright side!” to a resident of Chernobyl.) But failure can have power if we learn how to respond to it, and that involves a mix of psychology and grief — and lots of spaghetti and marshmallows.
Useful Failures
We toss around the word “failure” as a catchall, but not all failures are created equal. “When corporations say they want to ‘fail fast’ or ‘fail hard,’ they don’t really want … to lose $30 million,” says Payne, laughing a bit. “Failing fast” is a way of piloting — testing, tweaking, taking lots of smart risks.
Consider the spaghetti experiment. A decade ago, Peter Skillman, then an executive at Palm, arranged volunteers into four-person teams and gave them a goofy mix of items: 20 sticks of spaghetti, 1 meter of tape, a piece of string and a single marshmallow. The teams had 18 minutes to build the tallest structure they could, and it had to have the marshmallow on top. He gave this challenge to hundreds of people, including CEOs, lawyers, engineers and business students.
The winning group? Kindergartners.
“The engineers had years of schooling and work experience to teach them how to build sound structures,” explains Megan McArdle in the book “The Up Side of Down: Why Failing Well Is the Key to Success.” “But the kindergartners had something even more powerful: They were not afraid of failure. By trying and failing, they learned what didn’t work.” This is the bedrock of science — you create a series of experiments, and each time you “fail,” you apply that learning to your next attempt.
Yet, if we’re not careful, these small, useful failures can snowball into a catastrophe. “Failure can be like boiling a frog in hot water,” says Payne. “You get used to the temperature so much you don’t notice that you’re being boiled alive until it’s too late.” For this we can blame our mind’s penchant for confirmation bias — we welcome data that supports our views, and we put less stock in contradictory evidence. For an example, let’s consider the case of an entrepreneur named Jontae James.
Our Stubborn Brain
James had what he thought was a killer idea: a startup called YOOO, short for Your Out of Office, a platform to promote work-life balance. James had connections. He was a popular guy and had been since he played basketball for Saint Francis University (he was good enough to make NBA training camps, but didn’t crack a roster).
So, in 2013, in Silicon Valley, he launched YOOO, leveraging his connections to arrange deals for employers, offering them out-of-office perks they could give their employees as an HR engagement and retention tool — a free happy hour on a Tuesday night, or maybe VIP access at a club. He wooed corporate clients and envisioned a $100 million valuation, but he needed more users, so he kept giving away freebies to grow the base. This cost money. He dug in deeper.
“I ignored the hard truths,” he says now. Looking back, years later, James acknowledges a confirmation bias — he had focused on every nibble of interest and glossed over the many rejections. “The truth is that I had the wrong business model,” he says. “It just didn’t add enough value for the employers. It was a nice-to-have; it wasn’t a need.” In a desperate Hail Mary, he decided to throw an epic 10,000-person party to salvage the business — converting partygoers to users and convincing corporations that YOOO was legitimate.
James put every nickel into that party. “I borrowed money from people I shouldn’t have,” he says. The night of the party came. Fewer than 2,000 attendees showed up. YOOO was dead. “It was rock bottom,” he says with pain in his voice. “Just total despair. The biggest failure ever. I literally felt like I wanted to kill myself.”
Those negative thoughts shadowed James for years, and for this, we can thank neuroscience. Alison Ledgerwood, a psychology professor at UC Davis, studies how information is framed — whether in a “loss frame” (glass half empty) or “gain frame” (glass half full) — and then how the brain responds to changes in that framework. In a TED Talk that went viral (4.2 million views), she shared this example: One group of people is told a new surgical procedure has a 70 percent success rate (a gain frame), and another group is told that a new surgical procedure has a 30 percent failure rate (a loss frame). Same procedure, same data, but people liked the procedure more when it was described positively.
That part isn’t so surprising. Here’s the twist: She then went back to the first group (the positive frame) and told them, “You know, you could think of this as a 30 percent failure rate.” Suddenly, they didn’t like the procedure. They changed their minds. She also went back to the second group (the negative frame) and told them, “You know, you could think of this as a 70 percent success rate.” Unlike the first group, they didn’t change their minds. They were stuck in the negative frame. The brain can be stubborn, and it has a hard time going from negative to positive. This research helps explain why, say, star athletes obsess more about the rare loss than the many wins.
Back to failure. For it to be truly useful, Payne, the leadership coach, says we need to learn from the failure to avoid repeating the same mistakes. We need to reframe the experience from a negative (failure) into a positive (learning opportunity).
As trite as it sounds, maybe there really is power in positive thinking. Research from Robert Emmons, also a professor of psychology at UC Davis, suggests that keeping a daily journal of positive things we’re thankful for — a spouse, an umbrella, a funny joke from the Lyft driver — can demonstrably boost our outlook and lower stress. “Our minds have this sort of fundamental, natural tendency to focus on negative information,” Ledgerwood says. “We can train our mind to do it better. But it really takes some attention and care. Our minds aren’t going to do it on their own without us intervening.”
This doesn’t happen instantaneously. Failure can be emotional, it can be painful, and Ledgerwood and Payne stress the importance of acknowledging the loss, as opposed to immediately flipping it into a positive.
Take the case of Brenda Horton. She had a million-dollar idea, or maybe even a billion-dollar idea. She launched a Sacramento-based startup, ProPlanner, a productivity tool that allowed for easy collaboration across teams. It felt big. After all, every organization on the planet has teams, and they could all use a better collaboration tool. “We were setting it up to be a global company,” she says now, and envisioned a valuation north of $1 billion. For three years, Horton and her chief technology officer (her husband) busted their tails to launch a demo, find beta testers and raise capital.
And then life got in the way. Horton suffered a loss in the family, a second loss, and also had an accident that broke her upper jaw and sent her to the emergency room, which required surgery and rehab. They lost momentum and struggled to raise capital. The pressure took a toll on the marriage. She looked at the burn rate, the dwindling funds and did what sometimes must be done: She dissolved the company and killed the dream.
Losing ProPlanner was crushing. “It was a loss,” Horton says, her voice full of emotion. This is something that the cheery embrace-failure speeches tend to elide. Failure is hard. Failure can make us question our competence, self-worth, even identity. So we need to grieve. “Grieving is an important part of learning and understanding yourself,” says Payne. “Sometimes we want to skip the process and not admit that we’re grieving, but the emotion is going to come out one way or another.” Horton sensed this. “I wanted to make sure that I grieved in a healthy way, to get some healthy closure,” she says. She took yoga classes, meditated, read books on coping with loss and saw a therapist. “I recognized that I needed to sit with the loss. I was birthing a baby, and the baby died. That’s a horrible analogy, but it’s something to that effect. The baby didn’t make it. And I gave myself time to grieve that.”
The Reframe
James did the same thing. He took the time to (grudgingly) acknowledge the loss of his dream, and then he eventually reframed the experience as a learning opportunity. “It’s OK to fail if you learn from it. It’s not OK to fail if you don’t learn from it,” James says. And now he’s back. He moved to Sacramento and launched NatureTrak, a cannabis auditing and tracking platform that caters to state-chartered banks where it is legal. James thinks about what went wrong with YOOO, and he brings those lessons to his new startup.
His first lesson: Be skeptical. Before committing to NatureTrak, James spent a year on due diligence and tried to poke holes in the model. “I wanted every reason to say, ‘No, this is not going to work,’” he says. Another thing he learned: Use a modest valuation. He learned that “the biggest mistake young entrepreneurs make is to overvalue their company,” because a puffed-up valuation is harder to justify. Now he walks into pitch meetings with more confidence, feeling his numbers are rock solid. The new mindset is working. James says NatureTrak has raised more than $1.6 million and has 15 employees (five in Sacramento, others in San Francisco, Los Angeles and Prague). Money20/20 named NatureTrak one of the top 100 startups in fin-tech, and James hopes to close another $2 million to $4 million as this issue of Comstock’s goes to press. And all without a huge party.
Brenda Horton is back too. She found a new way to channel her passion — influencing workplace culture through technology — by working on business development and marketing with Humaxa, software for improving communication in organizations. She brings what she learned from ProPlanner (leveraging social media, digital marketing, running workshops) to her current role. The loss meant growth. “Every experience I’ve had in my career is just something I build on,” she says, and she keeps a healthy perspective. “I don’t see it as failure. I really don’t. … My life is much bigger and complex than to be defined by one aspect or category such as work. I am a sister, daughter, wife, friend, aunt who has many facets and interests.”
In the end, failure is one thing — perhaps the only thing — that unites all of us. Just ask failed writer J.K. Rowling. After losing a job and her marriage, she was broke, depressed and collecting unemployment, then she sent the first three chapters of “Harry Potter” to a publisher, which rejected it. So did another 11. As Rowling once told a graduating class at Harvard University, “It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all, in which case you have failed by default.”