Task Failed Successfully
"You get many chances so long as you keep trying."
There are a lot of different ways to categorize founders. One such way is through number of tries and their outcomes.1 I surmise that there are roughly three distinct groups here.
Obviously, there are the Alexandr Wangs, Brian Cheskys, and Mark Zuckerburgs of the world: visionaries whose first companies—within 5-10 years of founding—are among the most valuable in the world. Then, there are those who parlay a first company into a second, and sometimes, a second into a third and so on and so forth. Take Elon Musk, Peter Thiel, the Collison brothers, and Jack Dorsey for instance.
Often, some of these individuals are secretly a member of the third camp: those who failed first. Known canonical members of it include Sam Altman, Delian Asparouhov, and even Travis Kalanick (if you take him at his word). By failure, I mean everything between an exit well below the last markup (e.g. Loopt) and an outright cessation of operations (e.g. Scour). This is a slight derivation of the dichotomy pointed out by X user Luke Metro, who proposed:
“There are many blog posts written on how to have a successful tech career or how to start a successful company. But there’s almost nothing on how to leverage your clout into a big payday at the next thing, while still ostensibly remaining employed. Big gap in the market here.”
I aim, naturally, to begin to fill a version of that gap herein. We can address this through the three aforementioned examples and a few more:
Altman “walked away from Loopt shaken and sad” after an “acquihire” well below their last markup.
Asparouhov’s Nightingale reached ramen profitability but failed to achieve breakout success and sold for “a small amount to one of our clients.”
Kalanick’s Scour, which he claimed to be a co-founder of, was sued into oblivion and sold for parts.
Justin Kan’s first project, YC funded Kiko Calendar, sold the rights to its software on eBay after shutting down.
Apoorva Mehta famously launched twenty failed startups before founding Instacart.
Of course, the single most important thing is the generic advice to never give up and keep trying. Stay in the arena, continue learning, and you’ll eventually win. David Senra of Founders Podcast captured this well in an anecdote about Rafael Nadal and Larry Ellison excerpted from Guthrie’s The Billionaire and the Mechanic:
Then Larry abruptly stopped himself. “Forget everything I just said. The answer is simple. I never give up.” Earlier, Nadal had said something that made a deep impression on Larry. When asked if he loved winning, Nadal shook his head and replied, “No, I love the fight. If you fight hard the winning will come.” Larry loved the fight.
The obvious can often be the most insightful. How do you win? You keep trying.
Yet there’s a second—perhaps more sagacious and actionable—insight to be drawn: network building during and after their failure enables a subsequent rise. Altman came out of Loopt firmly enmeshed in the YC network; so did Kan. Similarly, Mehta caught his first break there as well. Asparouhov found a penchant for early stage investing, gaining prominence at Khosla and Founders Fund. While Kalanick tried again and scraped along for several years, after a modest exit from Red Swoosh, he too moved to San Francisco and started angel investing before founding Uber. Similarly, though not a failure per se, following Jason Calacanis’ own modest exit, he went to work for Sequoia, laying the groundwork for much of what he is known for today.2
One should, as always, avoid conflating correlation with causation in ascribing success to these choices. Yet the aforementioned path wherein failed founders take the time to build networks during or following a failure affirmatively set them up for future success. In the process, many also found a mentor; Altman found Graham and Asparouhov found Rabois.
In other words, if you’re intent on building but not yet ready, make sure you’re laying the groundwork. Find a VC to work for or a mentor learn from, or better yet, both. Sometimes, à la Jcal, you might just stumble into being the first check into Uber.
Any time I structure, categorize, or classify things I can’t help think of a beautiful quote from Foucault’s The Order of Things: “To classify... ...will mean, in a movement that makes analysis pivot on its axis, to relate the visible, to the invisible, to its deeper cause, as it were, then to rise upwards once more from that hidden architecture towards the more obvious signs displayed on the surfaces of bodies.”
Thank you, Luke Metro, for pointing out that one.