In the 2016 biopic The Founder, McDonald’s chairman and CEO Ray Kroc, played by Michael Keaton, stands before a bare parcel of land that is set to become the very first franchised restaurant. Kroc, who had launched a number of failed business and start-ups ventures, holds a handful of fresh earth before letting it slip through his fingers. He whispers: “Be right. Just one time. Be right.”
It’s a powerful moment. That uncertain but hopeful feeling is not lost on anyone who has waded into the start-up waters. A successful start-up requires any number of ingredients, such as vision, conviction, talent, and a little bit of luck. Even then sometimes start-ups poised to succeed flame out.
Yet, from the ashes of those flame-outs have risen some of the most disruptive, influential, and valuable companies in the tech industry vertical. Whether in e-commerce, social media, or app development, losing the short game to win the long game is perhaps the most common refrain when it comes to successful new businesses.
Let’s examine this conversation a bit before we take a look at some examples of failed start-ups that resulted in massively successful endeavors.
Quibi: A Success Story in Progress?
Quibi underwent a highly publicized downfall, despite how well-positioned it was for success. Its demise raises an interesting question in the start-up conversation: is there such a thing as a good failure? Can a start-up taking a nosedive actually be a loss-leader moment for the founders, investors, and talent within the enterprise?
Perhaps time will tell for Quibi’s founders and backers, but one thing we can safely bet on is that its ability to disrupt the content, entertainment, and app industry will be emulated or re-purposed by someone down the line. In other words, the failure provides a guiding light that prevents missteps.
Take Napster, for example. Yes, the file sharing software did eventually go belly-up after countless litigations and massive pressure from the music industry. But Napster did change the way music is consumed, shared, paid for, and litigated. Look no further than streaming services like Pandora and Spotify, which essentially emulated Napster’s model but added subscription service pricing.
This level of initial disruption, failure, emulation, and systemic change is not, as you’ll see, terribly uncommon.
Case Studies in Start-Up Failures
Several years before Twitter emerged as the social media and information distribution giant it has become, its founder Jack Dorsey was working in a San Francisco coffee shop while moonlighting as a basic coder for an online ticketing company. It just so happened that one morning Evan Williams, co-founder of a podcast platform Odeo, recognized Dorsey as a minor Silicon Valley player while getting his morning Joe.
After several conversations about how Dorsey’s coding experience could benefit Odeo’s mission of becoming a fixture in the podcast app movement, he joined the team. While Odeo failed to capture the podcast zeitgeist, Dorsey’s experience at Odeo through a series ‘hackathons’ where employees engaged in coding competitions stoked his ambition to create a digital platform where users could share messages and status updates in compact, concise ways.
Odeo’s collapse was cemented by late 2005, but the experience and skills Dorsey gained during those ‘hackathons’ helped him launch Twitter in April 2007, a little less than 2 years later.
As it turns out, Jack Dorsey went from barista to billionaire, eventually collecting $11 billion from that fateful encounter. But not from creating Odeo.
FunBag crawled so GoPro could walk. GoPro founder Nicholas Woodman conceived of GoPro initially as a wearable device to record his surfing runs. Created after seemingly endless 18-hour days, Woodman finally succeeded with a prototype wearable camera that has since reimagined how people view everything from sporting events to mundane, everyday tasks, as well as redefined how people think about perspective when it comes to filmmaking.
While Woodman’s first venture FunBag crashed and burned in spectacular fashion as the internet bubble burst in 2000, leaving Woodman jobless and on the brink of financial ruin, his vigor and self-confidence about his ability to successfully navigate a start-up never wavered. In a recent article in Inc., Woodman is quoted as saying:
“In your personal life and in business, you are your own worst enemy. Or you are your greatest supporter…nobody can help or hurt you as much you.”
This quote provided a guiding light for Woodman, who went from joblessness to a more-than-comfortable living. To get specific, GoPro garnered him a hefty sum of $300 million.
It’s safe to say Microsoft rolls off the tongue more readily and in snappier fashion than Traf-O-Data, but before Bill Gates found life-changing success with Windows, there was this flop. Gates conceived the company with his longtime friend Paul Allen, with a goal of reading traffic information to help engineers build more effective overall traffic flows. Initially, Traf-O-Data workflows consisted of employees reading paper tapes and then manually entering this information into a computer system where the data could be stored, sorted, and retrieved.
Traf-O-Data essentially ceased operation right around 1980; however, the coding and start-up navigation they experienced provided critical learning opportunities and lessons that Gates and Allen took forward as they worked to launch Microsoft. In a recent profile, Allen said:
“If it hadn’t been for our Traf-O-Data venture, and if it hadn’t been for all that time spent on [University of Washington] computers, you could argue that Microsoft might not have happened. In my experience, each failure contains the seeds of your next success — if you are willing to learn from it. Bill and I had to concede that our future wasn’t in hardware or traffic tapes.”
It seems almost redundant to highlight Bill Gates’ wealth, but when you think about how a failed company moved on to generate $118 billion, the profit factor is a paramount part of the story.
And Paul Allen? He didn’t do so bad himself. From the ashes of Traf-O-Data and the rise of Microsoft, he collected $25 billion.
Getting Ahead of Failing
The case studies we just discussed represent a much larger conversation surrounding the start-up industry: Failure, like in life, is often part of the start-up game. In fact, here are some pretty staggering statistics courtesy of Review42 on the perilous nature of jumping into the start-up world:
- 90 percent of these ventures go belly up.
- Only 40 percent of start-ups actually turn a profit.
- The greatest rate of failure occurs in the information industry (63 percent).
Now, these numbers could very well be enough to sour today’s coders and tech industry up-starts from heading down the entrepreneurial path, but look back to our case studies (and even our McDonald’s example) to find a corollary: Each failure provided invaluable experience with the technology, coding, and program building necessary for long-term, world-shifting success. In the case of Kroc, his failures with other restaurant industry ventures laid a foundation of understanding for how the industry worked to better understand how it could improve with some creative thinking.
What we’re really talking about here is education and insight, and this is where the right training and instruction for today’s coders and technology insiders can help modern entrepreneurs avoid some of the pitfalls of their predecessors, but also give today’s coding professionals a leg-up on the competition.
In short, the true value of coding training courses decreases the likelihood of failure, or at the very least, it allows today’s coders to fail faster and with more precision in order to accelerate their timeline for success.
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