As an avid football fan, I am constantly befuddled by how losing coaches actually get hired by other teams. And, I am not talking about the exceptional coach that just had a few bad seasons. I am talking about the habitual losers. You know the ones - that guy you pray gets hired by your arch-nemesis. Take, for example, Dick Jauron. During his head coaching tenure with the Bears, he put up an “impressive” 35 wins against 45 losses (.438 win percentage). He had one winning season during the entire 5 years he was with the Bears. A year later, he gets hired as the Buffalo Bills head coach. What did Buffalo get for this omnipotent choice? An “outstanding” 24-33 record (.421 win percentage) for the next four years and not one winning season. To be fair, the four years prior, the team went 28-36 (.438 win percentage). Buffalo may just be a glutton for punishment.
What does this have to do with entrepreneurship? It is the surprising willingness (or, even requirement) by VCs to generally only fund a previous entrepreneur. Given most entrepreneurial ventures fail in this country and truly successful entrepreneurs can now fund themselves, the likelihood that a VC will find a previously successful entrepreneur is not particularly high. And, anecdotally, it seems that multiple failures don’t seem to hurt you and actually may help in the fund-raising process. So, similar to the coaching comparison, why do VCs (or football organizations) fund (or hire) a former loser?
The answer is simple – experience drives learning, which breeds understanding. Teddy Roosevelt captured it well in his “Man in the Arena” excerpt from his “Citizenship in a Republic” speech in 1910: “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” Perceptive VCs identify those “bruised and bloodied” entrepreneurs that have this trait and can capture its essence to build a successful business.
Simply failing certainly does NOT indicate future success. Learning and improving is a powerful first step. And, therefore, unlike quintessential failed football coaches, “fail-on” is a powerful imperative for entrepreneurs to live by.
Chris Myers is the co-founder & CEO of BodeTree, the leading support tool for small businesses. Learn more at www.BodeTree.com.