The worst-case scenario from failure

The first startup I got involved with was a failure. There, I said it. So what?

I was 24, and my friend Gabriel and I thought 1999 was the year New Zealand should start moving its medical (and specifically, pharmaceutical records) online “to harness the power of the interweb” – that was our pitch.    

We were young, naive, inexperienced and two decades too early. We were so innovative, nimble and disruptive that we called our company Maverick Group, and our logo was a stylised chess knight. We never got remotely off the ground, but in time, our anchoring idea became a valid one, and our vision has almost been realised 24 years later.

Prior to this, the world was my oyster. I had great grades at university, incredible experience for a graduate (I was on the student executive for a few years and had a couple of companies on the side), and had been employee of the year in my first year of working in a consulting firm.  

But after the failure of Maverick, I thought it was all over. All my professional potential was dead in the water because I had failed miserably in my first startup.

I was wrong. So wrong.

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Startups as career acceleration

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I had to go out looking for a job, tail between my legs, eyes dead staring at my shoes, hoping someone might take me on. I was prepared to do any job to get started on my career ladder once more. I had visions of making beds in hotels.

As expected, at every job interview I was asked what I had been working on for the last year, and I told them the truth. To my surprise, every response was more or less the same – something like ‘wow! Good on you for taking the plunge. You must have learned a million things. I wish I had that bravery and conviction and anticipation of the future.’

Plenty of people wanted to hire me and pay me vastly more than I had been earning prior to my failure – and give me more responsibility. In other words, my startup failure had actually become an accelerant for my career.

Yes, of course there were opportunity costs. I had forgone a salary for a year or so, and for some people that is not feasible. My lifestyle had simplified materially while this was the case, which I had accepted. There were strains on my relationship as a result.

But in the end, it was a great investment. Like an MBA of sorts – an MSS (a Masters in Startup Screwups) – i paid off in its own right even if my story had ended there.

And if I had not given Maverick a go, like many people I might have died wondering one of the many ‘what ifs’. I had scratched one itch at least, and had a sense of what was involved in startup life.

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So many case studies

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Alas, over the last decade I have worked on a few companies that have failed outright or meandered slowly nowhere in particular. And universally for the people involved, the failure has accelerated their professional options.

As an example, let’s take Coachseek – a SaaS platform for sports coaches, which we folded in 2016 due to insufficient market traction. Its affected personnel:

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• Ian Bishop – its founding CEO – went from tennis coach to a successful CMO in various tech companies.
• Shaun Fitzmaurice – its growth leader – became a COO in a national marketplace, which subsequently exited.
• Olaf  Thielke was our tech lead and became a well-established coding coach.
• Hannah Faesenkloet – our UX lead – moved to the US to work on well-known international success stories and has had an incredible career so far.
• Denym Bird – a marketing grad – moved to set up marketing at Tradify (which is a great success story in its own right) and has founded several companies since.
• Alex Hamilton – a customer success grad – led customer success in other SaaS companies and founded Paintvine with Denym (above), which he still runs.
• Even our intern, Matt Williamson, finished off his degree and immediately founded his own successful SaaS company. He told me earlier this year that the principal inspiration for his trajectory was his time at Coachseek. In his words, he had caught the ‘startup buzz’.

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That’s it. Every person who failed in a failed startup ended up a winner. Yes, it was painful, but in hindsight, no one got hurt. It’s weird, counterintuitive and incredible, but it’s true. And the pattern repeats over and over.

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Again, what’s the worst that can happen?

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Success tastes sweeter of course – and it does happen, even if more rarely – but that’s the thrill of startup life, and I would not trade it for anything.

If I had a superpower – and I probably don’t – it’s that I have little fear of failure. I have failed at everything: business, sports, relationships and, according to my children and wife, my dress sense. It doesn’t matter to me.  

In fact, I embrace it. Every failure accelerates my learning, and the opportunities that come about from it. If that’s the worst that can happen, I’ll take it.

Serge van Dam is an early-stage startup investor, focused on going-global productivity software (SaaS) companies. He spends much of his time with a bayonet in hand yelling ‘now!’ in the startup trenches.