A Time to Lose

Posted on Posted in Essays
Definition: Bad Rap
Definition: Bad Rap

I feel sorry for people who say they hate losing more than they like winning. Apparently, these people have not yet learned how to get their money’s worth out of losing.

Don’t get me wrong, I’m not saying I prefer losing over winning — obviously winning is more desirable — but if you have to lose, you may as well get something from it, right?

I feel like failure has been given a bad rap. Sure, it can be pretty bad, but never so bad that we cannot benefit from it in some way if we are determined to.

In fact, in my view, if you lose and fail to learn from it, then you’ve pretty much lost twice.

Then again, there are right ways to fail and wrong ways to fail.

This brings to mind the story of Ron Wayne.

Ron Wayne was an engineer at Atari (a video game company) in the 1970s. Ron also started a slot machine business that failed. By all accounts, Ron Wayne handled this failure with unimpeachable integrity. In fact, not only did he work to pay back all his company’s debts, but he also paid back all his investors as well so that no one was out a penny from the failed venture.

In his words, “It was my fault it failed, not theirs, and I didn’t want anyone to be out any money because of me.”

Ron had a friend at Atari named Steve who was very impressed with Ron — so impressed in fact that one day Steve came to Ron looking for his wisdom in helping him solve what Steve considered to be a big problem. Ron agreed to help. Steve introduced Ron to another young man named Steve, and together the three them solved the problem brilliantly.

In fact, the three were so impressed with themselves that they decided to form a company together. Ron brought out his typewriter and typed up the contracts and the 3 of them signed them. Each Steve owned 45% of the of the company, and Ron, the “philosophical tiebreaker” owned 10%.

And with those three signatures, Apple Computer was born.

Ron Wayne Signature

So why isn’t Ron Wayne as famous as Steve Jobs and Steve Wozniak? Because Ron Wayne learned the wrong things from his previous failure.

Despite the evidence Ron had that the three of them work very well together to overcome tough obstacles, Ron began to focus instead on what a terrible ordeal his recent business failure had been. Ron Wayne let his doubts get the better of him and he dropped out of Apple 11 days after he helped form it.

Doubt is not a lack of confidence, doubt is confidence — confidence in the outcome opposite of what you are striving for.

Ron Wayne allowed himself to grow more confident in the possibility that he just might be creating another serious financial obligation to work off. In other words, Ron learned the wrong thing from his failure: not to risk again.

Ron should have realized that his newly acquired business experience made him smarter now. Ron should have concluded that his fresh education, coupled with the drive and expertise of Steve Jobs and Steve Wozniak, gave this new venture a much better chance of succeeding than his previous solo endeavor ever had. But no.

Much to the disappointment of Steve Jobs and Steve Wozniak, Ron Wayne sold his 10% stake in Apple back to them for $800. Today those shares would be worth $22 billion.

“What separates the winners from the losers is how a person reacts to each new twist of fate.” – Donald Trump

To be clear, I do NOT see Ron Wayne as a loser. Although today Ron lives in a humble “manufactured” home, and lives off of his very modest social security checks, he seems to have succeeded in building a rich character which sadly some people of great wealth seem to lack.

But at the same time, wouldn’t Ron Wayne have made a wonderfully benevolent billionaire had he learned from his failure as well as Steve Blank did? Who is Steve Blank?

[pullquote3 align=”right”]”Winning is great, sure, but if you are really going to do something in life, the secret is learning how to lose. Nobody goes undefeated all the time. If you can pick up after a crushing defeat, and go on to win again, you are going to be a champion someday.” –Wilma Rudolph [/pullquote3]

On February 23, 2013, one of my favorite business writers and speakers, (and a professor at Stanford, Berkley and Columbia), Steve Blank, published an article on Forbes.com called “Failure and Redemption.”

Professor Blank writes that there are 6 stages of failure to live through:

  • Stage 1: Shock and Surprise
  • Stage 2: Denial
  • Stage 3: Anger and Blame
  • Stage 4: Depression
  • Stage 5: Acceptance
  • Stage 6: Insight and Change

In the article Steve walks us through these 6 stages as he tells about his experience as CEO of a new startup company called “Rocket Science.” Failure did not seem possible as he raised $35 million and started building their product: video games. In fact, in 18 months Rocket Science was the cover story for Wired Magazine, hailed as “one of the hottest companies in Silicon Valley.”

Stage 1: Shock and Surprise

90 days after the Wired cover, it was apparent that no one was buying Rocket Science video games. With 120 employees, Rocket Science was burning cash like a rocket burns fuel. Their top engineers started leaving the company.

[pullquote3 align=”right”]”It is impossible to live without failing at something, unless you live so cautiously that you might has well not have lived at all, in which case you have failed by default.” — J. K. Rowling[/pullquote3]
Stage 2: Deny any of it was your fault

“In my mind,” Steve wrote, “I had done everything the investors asked me to do. I raised a ton of money and got a ton of press. We hired everyone according to our plan. It was everyone else who screwed up. I did everything right.”

Stage 3: Get angry and blame everyone else

Steve’s blaming seemed right to him. It was the cofounder’s fault: he was in charge of product development. It was the engineers’ fault for bailing. It was the venture capitalists’ vault for not giving more money. It was Sega’s fault for building a bad gaming platform….

Stage 4: Get depressed

Steve wrote that as the inevitability of the failure sunk in, he stayed in bed and lost interest in things he used to love — to that point that to this day he still cannot play a video game.

Stage 5: Gradually accept your role in the failure

Over time and with the help of his wife, Steve began to think of the things he could have done and did not. “I often reverted to Stages 2 and 3, but over time I took ownership of my primary role in the debacle.”

Stage 6: Gain insight and change your behavior

“This was the hardest part,” he wrote. “While I stopped blaming others, understanding what I could change in my behavior took long months.”

In a world of people so full of how they “deserve to be happy,” I’m glad to see there are still people who realize that others deserve to be happy too, and that our choices affect the happiness of others.

If you decide to accept responsibility for employing 120 people and taking $35 million in venture capital, then you need to accept responsibility when those 120 people go unemployed and that $35 million is gone. It’s not good enough to shrug your shoulders, blame Sega, blame the economy or lay it at the feet of business partners then wash your hands of the incident and move on. You need to feel badly when your mistakes affect others. Sidestepping guilt, or shortcutting shame because you don’t like being unhappy is not the right way to get happy again. In fact, it is another way we fail to learn from failure.

[pullquote2 align=”right”]Sometimes, if you don’t let the pain of a failure sink deep into your DNA, then the lessons you might have learned from failure can be too easily overwritten by your standard operating system, thus leaving you programmed to repeat failure again. Don’t be that guy or girl. [/pullquote2]
Sometimes, if you don’t let the pain of a failure sink deep into your DNA, then the lessons you might have learned from failure can be too easily overwritten by your standard operating system, thus leaving you programmed to repeat failure again.

Don’t be that guy or girl. When you fail to change after a failure, you are pretty much saying, “I’m going to gamble that next time conditions will be perfect so I can succeed — or at least perfect enough to absorb the flaws I choose to cling to.”

Steve Blank continues with his story: “… I looked at the patterns of behavior, not just at my last company but also across my entire career. I learned how to dial back the hubris, get other smart people to work with me ā€“ rather than just for me, listen better, and act and do what was right ā€“ regardless of what others thought I should do.”

[pullquote3 align=”left”]”Far better is it to dare mighty things, to win glorious triumphs, even though checkered by failure… than to rank with those poor spirits who neither enjoy nor suffer much, because they live in a gray twilight that knows not victory nor defeat.” — Theodore Roosevelt [/pullquote3]Steve Blank changed, then took Steve Blank 2.0 to work with him on his next endeavor. He worked collaboratively. He kept the company small until they had a product that was repeatable and scalable, then he hired a CEO to move the company from the Discovery Phase to the Growth Phase.

The result?

This new company returned over $1 billion to each of its two lead investors.

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I know some people who are not afraid in the least of failure, but also never seem to learn from it either.

And I know some people who get the wrong things from failure.

Better not to try. Some people are so undone by falling short of expectations that they avoid putting themselves in a position where they may fail again. Next to not learning from failure at all, this is the worst lesson a person can take from failure.

[pullquote3 align=”right”]”Failure should be our teacher, not our undertaker. Failure is delay, not defeat. It is a temporary detour, not a dead end. Failure is something we can avoid only by saying nothing, doing nothing, and being nothing.” — Denis Waitley [/pullquote3]Always looking for the shortcut. Another mistake people make when they are unsuccessful is to not move themselves through all 6 stages.

I know some people who don’t even get to Stage 1: Shock and Surprise. “I had a feeling it wouldn’t work,” they say — which begs the question: then why didn’t you do something about it before it tanked? Or at least move on to something you thought would succeed?

Then there are those who stop at stage 3 or stage 4, thus never quite getting their money’s worth from a failure. I see people blame the economy, blame the refs, blame their spouses, blame a political party… never moving past blame and on to acceptance, insight and change. And because they’ve stopped at the blaming stage, their growth has stopped as well.

Blaming others is not only natural, but often it is quite accurate. Failure is rarely a one man show. It’s stopping at blaming that is the real problem.

You’ve got to touch all the bases to score. If you don’t, that’s not failure’s fault, it’s yours.

The 3rd chapter of Ecclesiastes was the inspiration for the Byrds 1965 hit song: Turn Turn Turn.

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Then the next generation got to know Ecclesiastes again when Kevin Bacon as Wren McCormick quoted Ecclesiastes to make a case for his “time to dance.”

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Then the next generation was reminded of the wisdom in Ecclesiastes as Footloose was remade.

“To every thing there is a season, and a time to every purpose under the heaven:”

“A time to get, and a time to lose; a time to keep, and a time to cast away;”

— Ecclesiastes 3:1,6

There is a time to lose, so don’t avoid failure. Don’t seek it, but when failure does happen, see to it that you succeed at failing well, for failure done right leaves us better people, more able to succeed in the future.

If there is anything better than learning well from our mistakes, it is learning well from the mistakes of others.

Whenever the kids and I are watching a movie and there is a scene where someone makes a decision motivated by fear, I tend to pause the movie and remind the kids, “Never let fear shut down your brain. Be thinkers, not stinkers.”

It’s not that profound, I know, but I do hope that these repeated examples in movies help make the lesson stick. Life is about making good decisions, even under less than ideal conditions.

Life is NOT about BEING right, it’s about doing right. So don’t let discovering you were wrong about something be a big deal. Don’t overreact to failure. No great three point shooter ever got great without missing a lot of shots getting there, and without accepting the fact that there are plenty more missed shots to come.

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