It's true that mistakes can be a great learning experience, but let's be honest: Failure sucks. It feels terrible—even though in hindsight, we can usually recognize the importance of the lesson learned and the fact that we probably had to fail in order to learn it.
In this excerpt from the new book Startupland, Zendesk CEO Mikkel Svane talks about the failures he's experienced on the path to success and why he doesn't think failure should be celebrated, no matter how valuable the lesson learned.
Zendesk is the third startup I’ve built, making me what everyone is quick to call a “serial entrepreneur.” I’m not a big fan of that moniker. Call me old-fashioned, but nobody brags about how many broken marriages they have behind them.
For most of my working life, I never had a real corporate job. Although Copenhagen, a city of about a million people, in a country with the smallest private sector in Europe, isn’t exactly the epicenter of the startup world, it was what I knew. My foray into entrepreneurship began with a computer software program that made it easy for users to make complex 3-D images called stereograms. Later I built a portal—a website that brought information together from multiple diverse sources—which had community elements and chat rooms (one of the first chat rooms in Denmark), and which never made money. (To deal with the more pedestrian matters of making money I did a variety of unglamorous jobs, including waiting tables and cleaning houses… living the dream!)
That site was eventually purchased by a newspaper, which left us owning just the software we built it on. Soon, I discovered, there was a real market for this software that helped companies provide community services for their users and visitors online and this became my next company. The dot-com boom that had swept the U.S. had now hit Copenhagen. We benefited from the hyper-frothy interest in all things Internet-related. It was a lot of work, and it was also a lot of fun.
And then, quite suddenly, it wasn’t. The dot-com crash of 2001 came as fast as the crest had. Our software was primarily sold via value-added resellers, and these companies were hit hard by the change in the tides. Media companies, a big customer base, were also brutally affected. They couldn’t pay their bills, including our bills. We struggled and suffered for a year as customers fell by the wayside.
Relying on sales to grow our business and without a reserve, we had no way to cushion the impact. We had to let go of people. It was really tough to have to do that to people and to go on the next day as if things were normal. I had to let go of people I considered very good friends—people who I felt had built the company with me. Decisions on who to let go relied more on where we could save most, rather than on what made the most sense for the business. Ironically, one of the uber-talented guys I had to let go was David Heinemeier Hansson, who later became the father of Ruby on Rails, the language we built Zendesk in, and a co-founder of 37signals, which became an inspiration for a whole generation of software startups—including Zendesk.
At one point, we won a huge deal in Germany that we believed could turn everything around again. We felt hope. We were so far along. The transaction was complete, but before the reseller could pay us, he went into Chapter 11—another victim of the dot-com crash. We were out of money and out of luck.
And at this point, a year after the bubble burst, we found that the business could no longer go on. We first had to wind down our activities. Eventually, we had to shut down completely.
I was devastated. I had just turned 30, and for almost four years, this was the only thing that I had done. I was not depressed about losing my livelihood; I was depressed about losing the only thing I had.
In Silicon Valley there’s a lot of talk about failure—there’s almost a celebration of failure. People recite mantras about “failing fast,” and successful people are always ready to tell you what they learned from their failures, claiming they wouldn’t be where they are today without their previous spectacular mess-ups. To me, someone who has experienced the disappointment that comes with failure, the whole notion is a little odd.
The truth is that failure is a terrible thing. Not being able to pay your bills is a terrible thing. Letting people go and disappointing them and their families is a terrible thing. Not delivering on your promises to customers who believed in you is a terrible thing. Sure, you learn from these ordeals, but there is nothing positive about the failure that led you here.
But in this experience, I learned a critical lesson: There is an important distinction between promoting a culture that doesn’t make people afraid of making and admitting mistakes, and having a culture that says failure is great.
Failure is not what we have rewritten it to be. It is not something to be proud of; it is not something to flip about; it is not something to celebrate. No, failure is simply something we can learn and recover from. I wouldn’t have been in the position to create Zendesk had I not failed with my previous companies, so I’m grateful I was able to learn from those early mistakes.
The lesson here is not to take pride in your failure, but to take pride in the lessons learned from that failure. Understand that you can and will recover, and that failing is ultimately just another step on the road to success.
Adapted with permission of the publisher, Wiley, from Startupland: How Three Guys Risked Everything to Turn an Idea into a Global Business by Mikkel Svane with Carlye Adler. Copyright (c) 2015 by Zendesk Inc. All rights reserved. This book is available at all bookstores and online booksellers.
This excerpt from Startupland first ran in the article "Failure Sucks" on Re/code.