The Very Failed Blog

Why Focus on Failure?

Entrepreneurs like to stay positive. It’s what keeps us going. If we think about failure at all, it’s to dismiss it with canned phrases like “fail fast, learn faster.”

We give lip service to the value of failure, without examining the mechanics of how failure drives value. We prefer to focus on success. But for personal growth and improving your effectiveness in the world, there are few practices more useful than analyzing your failures. Learning the right lessons from failure is a rare skill. It will unlock the wisdom that leads to success.

I write about failure for two reasons.

The first is that I’m analyzing my own failures. I want to better clarify what went wrong in my decision-making process. I want to rectify that so that I make better decisions in the future. I will become wiser by learning how to take the correct lessons from each misstep. Writing is a powerful way to get to the bottom of things, because it forces clarity.

The second reason is that stories of failure are more valuable than stories of success. This is controversial. Most entrepreneurs like to mainline positivity content to hype themselves up to face the daily challenges of business. I’m no different. Success stories are fun and sexy and uplifting. Failure stories are grim and unsexy, and often boring. So why choose to analyze failure rather than success?

Simple. The lessons from failure are more specific and actionable than the lessons from success.

Contra Gurus

We’ve all read the business gurus. To be successful, you have to get in the trenches, do the work, build the skills. Get a lot of iterations under your belt. This allows you to find something that works for you that you can replicate. But finding that thing that’s going to work for you is an individual journey, not a generalized formula. Your best bet is to find a way to get the most iterations in while taking the least damage. The least damage part is important, because time and resources aren’t infinite. So the less damage you take, the more chances you have to win.

Charlie Munger believed that avoiding big errors was more important for success than scoring big wins. Avoid big errors to stay in the game longer. This increases your chances and exposes you to opportunities for a big win. This is why Munger would look at problems using his inversion model. Think “What would I do if I wanted to fuck this up?” If you can figure out what are the most likely routes to failure, and avoid those, your chances of success skyrocket.

If you can identify the blind spots that most often cause entrepreneurs to fail, you stand a much better chance. The good news is, you don’t have to learn all those lessons from personal experience. You will likely have to learn some lessons the hard way. This is especially true for those specific to your circumstances. But those aren’t the ones most likely to cause catastrophe. The big offenders are common blind spots or cognitive errors that others have committed before you. You can identify these in yourself ahead of time, if you take the time to look.

But this isn’t easy. It requires a lot of self awareness and discipline. It’s easy to say and hard to do. I had read Nassim Taleb’s books on risk, and how our cognitive biases warp our perception of it. I had read the wonderful book “What I Learned Losing $1M” by Jim Paul. And had I internalized the core lessons from those works, I would have avoided my worst mistakes. The core lessons from that book (and from Taleb) are about hubris, overconfidence, and over reliance on recent historical data. And those were precisely the flaws that led to my mistakes in the acquisitions of ‘22-‘23.

The primacy of failure

Ok, fair enough you might say. Failure is useful to study, that makes sense. And sure, it’s underemphasized. So shouldn’t we bring the balance to 50/50?

No. You should ingest as much success content as needed to remind you that success is attainable. That it happens all the time. But what will make you successful is acquiring the wisdom to make better decisions. This comes from studying failure. It is improbable that we will learn good decision making from success. Here’s why.

Success stories, accurately told and interpreted, can give us useful principles and heuristics for life. They can motivate us to keep going. But rarely anything concrete and actionable. The specifics are non-replicable. It’s interesting to learn how Bezos thinks, but you’re not going to build Amazon, because it already exists. So it doesn’t help much in arriving at what is going to work for you.

But success stories are not accurately told and interpreted. They’re riddled with cognitive errors.

Selection bias by the author will neglect critical details that he didn’t even think about.

Survival bias gives the survivors a god complex. The ones who beat the odds indulge in the delusion that they’ve discovered the secret sauce. Most of them haven’t, or can’t articulate it. So we end up with a lot of vague advice and opinions.

Confirmation bias is also in play. The protagonist of the success story is often the narrator. Success inflates his hubris, and gives validation to that suspicion he’s always had that he is a genius. As a result, he will amplify the elements of the story that are consistent with that narrative.

Failure, though, often has a clear cause, and reveals a specific flaw in thinking or character. Failures teach specific, actionable information. For example, if you want to get into e-commerce and are thinking about buying an online business, you can rush in and learn on the fly. Or you can also read about my mistakes and apply those costly lessons at the outset.

Reading a success story about e-commerce will not teach you those same lessons. It’ll be fun though!

Where’s the Failure Content?

I’m not the first genius to figure this out. The business gurus and influencers all acknowledge the power of failure. But they don’t give us a lot of details. Sometimes there are dramatic and histrionic tales of their tough life and bitter struggle. Mysteriously, All the “failure” stories are told after the protagonist has achieved success. They not so subtly glorify him, rather than serving as a cautionary tale.

Such stories yield the old pat phrases you see on motivational posters. But they don’t give us anything actionable to work with. What about details of specific failed deals? What caused the failure? What can we learn from them to improve our decision making? Those stories are few and far between.

So why don’t the gurus provide the ugly and unflattering stories? I think there are three reasons.

The most obvious is that people don’t want to hear about it. Most of their audiences read “business” content as entertainment. They have no intention of ever doing anything. So if you’re a business influencer trying to grow your audience, focusing on the unsexy specifics of your failures isn’t likely to help. Better to give the old “I soldiered through, and so can you!” line and make everybody feel good.

The second reason is that they may not realize how valuable those specific lessons would be. Because the audience-growing content is what’s profitable, they have interpreted that to mean it is what’s important. So we have a crop of influencers going on about “grit” and “perseverance” and talking about how they were homeless or slept on a friend’s floor (in Silicon valley!) before striking it rich. This is the kind of stuff that delights their voyeuristic audience of lifelong spectators. It also provides a brief warm and fuzzy for the struggling entrepreneur. But it gives them no actionable value.

The action-taking audience has a strong enough grasp on the English language and basic logic to understand that quitting means the game is up. So if they want to succeed, they need to “never quit.”” It’s nice encouragement. But it’s not instructive.

The third reason is that, (in my hostile opinion), despite their feigned humility, the gurus’ underlying vanity craves credibility and praise. There is a mysterious phenomenon whereby when someone makes a little money in tech or ecommerce, they suddenly have the irrepressible urge to build a personal brand and chase validation as an internet guru.  And of course, they’re also selling newsletters, courses, raising funds etc. That is to say, they’re salespeople. Nothing wrong with it per se. But their incentive is to inflate their image and credibility, not to show the ugliness of their shortcomings.

The Opportunity

There’s a gap here. I believe some aspiring or early-stage entrepreneurs want to hear real stories. These stories shouldn’t glorify the storyteller. Stories that point out the flaws that caused mistakes, even when those flaws are humiliating and current. Not mentioned in passing after the struggle is over.

I also believe there’s a lot of value in writing about failure as it’s happening or shortly after, rather than once you’ve climbed the mountain. It’s easy to trivialize past suffering once you’re out of it. It’s what we do to get past things. But it’s a disservice to the others we could help by telling the unvarnished truth.

And the unvarnished truth is that a lot of entrepreneurs don’t make it. The ones who talk about soldiering through and perseverance are the few who made it. And I’m certain that grit was a big part of it. But grit wasn’t enough. Because many people keep trying until they die and never get anything going. And that’s not because they didn’t have grit or integrity or perseverance or any of the bullshit poster words. It’s because they didn’t learn the right lessons, so they had to keep losing over and over again.

If I don’t learn the right lessons from my failures, I’ll never get to the top of the mountain either.

So what’s my incentive to pull back the kimono on my own failures? Same as the gurus. Avarice, vanity, a hero complex.

Avarice, because I want to use these analyses and the feedback from them to accelerate my path toward massive success. Also maybe monetize it if I can.

Vanity, because I want the adulation of strangers for my “honesty” and “candor.”

A hero complex because I want to feel like I’m helping others in the process.

None of this is bad, of course, but if I’m going to give the gurus a hard time, it’s only fair to point out my own base nature.

Also it’s a kind of purgation. A public confession to the business gods of my unworthy actions. May they absolve me of my sins and bless me with wonderful ROI in the future!

Whatever dark motivations lie hidden in my twisted psyche, I hope you find these reflections useful.

Good luck out there. Stay safe, and stay solvent!