Master Failure

Welcome back to the episode of the Startup Therapy Podcast. This is Ryan Rutan, joined as always by Will Schroeder, my friend, the founder, and CEO of startups.com. Will, failure is one of those things that's omnipresent in the founder space. We talk about it a lot. We talk about failing fast. We talk about all this stuff around failure, and it's funny if we think about it, this podcast is an exercise in exactly that, like a founder's willingness to fail and then to just.

Keep going anyways, because our first couple episodes of this podcast, which we'll never see the light of day, were abject failures, right? They were failed, so pieces of content, but we kept going. And so as you think about failure across your 30 plus year career doing this stuff, how good have you gotten it failing? I'm so good at failing. I'm the heman master of the universe at failing. And, and I'm proud to say that, and I don't say that to be like controversial, right?

Like, oh, he's proud to fail, right? Or like, I'm shielding this. Like, you know, otherwise regret. In fact, you know, we'll talk about that. It's the actually the opposite. Like I say that because you have to have a lot of balls to fail and then fail again. And then fail again and just keep on coming back. But if you do. Keep pretending that you're sure it's gonna work the next time, rightly. Absolutely, man. Yep. And actually let me modify that a bit. I'm never sure it's gonna work.

No, that's, that's why I said pretend. That's why I said pretend. Yeah, yeah, yeah, yeah. You're telling everybody else, you're like, okay team, we're gonna do it this way this time. And we're like, is it gonna work this time? Like, yes, we, it's going to right. You have to hope it will. Yes. Ly you have somewhat believe that it might. Yeah, I agree. Well, and the truth is you just don't know. Right?

And I think that's what we're gonna talk about is what's it like for a founder to get really, really good at failing? I think I, I would argue it's maybe one of the greatest superpowers you can possibly have. Yep. I wanna talk about where it comes from. I wanna talk about like how we've developed it, how we use it in our everyDay@startups.com and at some degree in our lives as well.

And. Why I think most founders, especially new founders, are just looking at it the wrong way. I actually, I'll go zoom out. I think most people in life have have a misappropriated version of failure. They, they logically say, I have to avoid failure at the expense of doing anything. Right? Yeah. And I think that's the real problem, right? When you spend your time trying to avoid. Failure.

You're, you're missing out on a lot, but you're trying to optimize for something that you can't possibly optimize for. Right. Which is success, which is like, if you knew what to go and do, then Sure. But we don't, most of the time, especially in our space, to me, it's like hearing a founder say like, they, they just, they wanna make sure that they're right. Like that's not a lecture that we get. Right. Saying that you wanna be right, which is essentially saying.

I want to avoid failure it be tantamount to a boxer saying, I'm just going to avoid all the punches. Right. Yeah. Right, right. Yeah. Your job is not to never get hit. Your job is to take the hit. Right. Keep your guard up and finish the damn round. Right. That's what you gotta do. That's what being a founder is.

Yeah. Let's set the tone. We always say this, you're going into a market that's never existed. Yes. With a product that's never existed, with a team that's never existed. Right. Yeah. And you also probably don't know shit. Correct. So. Combine all of those things. Where is the basis for certainty in this business? It does not exist. We're not in the success business, man. We are in the error, rapid error correction business. That's what we're in.

And I think like if we, if we pull somebody into our world, we talk about this a lot. Like we transplant someone from the real world, right? Yeah. Into our weird matrix world, right? And they look at what we do for a living. They're like, this makes no sense. Because it doesn't, okay. But they will logically say, they'll logically say. I don't wanna do something like that because I don't know the right decision. Yeah. I wanna go to my job.

In fact, I was talking to a buddy of mine. This is actually just is so timely over this weekend. I was talking to a buddy of mine that I've known him since middle school, right. Uhhuh. So a very long time. He started out in the startup world. He was one of the guys that, uh, helped start price line, if you remember Price line back in. Yeah, yeah, yeah. You know, wait, you went to middle school with William Shatner? Me and Billy. Me and Billy. And so he's clearly, you know, had that, that side.

Yep. But he works for McKeson now. He's a corporate attorney for McKesson. He has the safest job in the world. Yeah. Yeah. It's, and he was talking to me about how proud he was of his safety. He knows better. Right? He's like, I've been on the other side of things where like I have no idea where my next meal's coming from. And he's like, I'm in my fifties now, dude. I'm not even trying to do that. Right. That is a very logical way Sure. Of looking at the world, right.

Our version of looking at the world is we run the other direction. Yeah. Right, and, and I think when people start to do that, and a lot of the folks that are listening to this podcast, you know, for folks listening, if this is one of your first. Time's listening to the podcast, we have two segments of our audience.

One segment of our audience just decided they wanna build a startup five seconds ago, and that might be you and the other segment of our audience are very, very, very senior and seasoned, and they just listen to these episodes, just nodding their head the entire time, and it's a bit of a trip down memory lane. Yeah, so I, I think, Ryan, let's speak to both of those folks for a second. Sure. For the folks that are the grizzled veterans, you know exactly what we're talking about.

There's no way you could have become a grizzled veteran on the, I only get a right move. Right. That doesn't happen on a whiteboard. It does not. And for the folks just getting into this, I think this is an important episode for you because I think it's important for you to understand how important. Learning failure is okay.

Yeah. And so, Ryan, when you think about like, the problem of avoiding failure as a concept, right? For, again, these younger folks, how would you describe that problem? What, what is the problem when you start avoiding failure? You're steering a parked car, right? Like nothing's gonna happen. I will spit my drink out. Sorry about that. I've never heard that term. I didn't intentionally time that, I promise. Yeah, that was well done. So, but that's what it is, right?

Like you're just sitting around, nothing's gonna happen. Right. I hate seeing and I watch it happen a lot, right in my getting customer session on Mondays and Fridays, it's a constant refrain because nothing stalls a startup like founders who need like perfect information before they make the decision, right? They want to know before I decide that this will be the right decision. It's not how it works, right?

I've realized lately that so much of my feedback that I'm giving people has this undercurrent of, and you're probably gonna fail, and that's okay. And that's okay. Right, right. And like things like people trying, like belaboring the point of we just, we figured out like these five ICPs, we don't know which one to go after first. I'm like, put 'em in a hat. Draw one doesn't matter. Right? Pick somewhere, rule 'em in, rule 'em out. You gotta start somewhere.

The minute you're wrong about one means you can move on to the next one. Means you can move on to the next one, means you can move on to the next one. If you just sit around in your boardroom talking about which one you think is maybe gonna be the best choice, nothing's happening, right? Nothing is happening. It's amazing because again, we come from worlds where you don't have that luxury.

Okay. Yeah. No barista at Starbucks can just start making all the drinks and see which one works and just hand them to customers. Correct. And be like, oh, well, uh, didn't work. Didn't work. You'd be fired in a day. People don't like scalded milk latte. Got it. You like, you just don't get that luxury. Now in our world, it goes the polar opposite direction of what people are used to and what their logical comfort zone would be.

We look at a problem and we say, okay, there's 10 different ways we can go with this. We actually don't know which one is the right answer. Yep, we're smart. We can kind of say, yeah, this is probably more likely to be right than the others. So we often don't know and, and we're talking about. Everything. Just so like, it's not amorphous in what we're saying.

We're talking about hiring decisions, co-founder decisions, investor decisions, product decisions, marketing decisions, HR decisions, like you name it, there is a tremendous amount of uncertainty. And if in every case you're like, well, we can't get it wrong, you will lose. You will lose, and you'll, you'll lose too. You and I because we are willing to make bad decisions. Exactly. And we know how to come back from 'em, which is interesting. Yeah. I think that's, that's an important part of it.

To me, again, it's so painful to watch because indecision in a startup earns interest and it compounds daily. Like the longer you go without making those decisions, that the worse it gets. And I think that one of the things that, that I've always found. Is for me, like the thing that can make me more comfortable. If I'm really looking at a decision, I'm like, I really just don't know. Ask yourself what the consequences are gonna be. We've talked about this a lot on the podcast.

It's like sometimes that monster you think that you're gonna face just ends up not being that big of a deal, and most decisions aren't irrevocable. Right. It's like we're not asking you to put a tattoo on your forehead. Right. And even that is replicable, right? You can, you can change that. So I think that one of the things that you can become a little bit more comfortable in terms of failure is knowing that you don't have to continue a long way down this path.

And so for me, it's breaking that down and saying, okay, I don't know. But here's how I can go find out in the shortest period of time with the least amount of resource and all that stuff, right? And then it's just iteration is the, is the tuition we pay for learning, man. This is how we get to understand what is actually gonna work. We, we pay in small failures so that we can earn really, really useful truths. And if we don't do that, we're dead, man. We're just dead in the water.

You said something interesting. You said, you know, this concept of slaying the monster. Yeah. I think early on, if you haven't been put in that position where you've been required to fail on a regular basis, or more specifically, like most of the world does not come up in a society that rewards failure. Correct. There's no version where the teacher gave you the test that you got an F on. Trust me, I tried and was like, congrats. You've nailed failure, right?

Yeah. You, you now know how to not algebra. Awesome. Yeah, exactly. Exactly right. Like there's, there's no version of that barista making all the, the coffees wrong in being like, you know what? You've learned so much today. Let's, you know, let's, let's promote you. Right? That's right. You a manager. There's no version of our lives. And even in, and I would, I take this further in our relationships.

When people are dating or trying to find their, their mate or your parent of their children, whatever. Yep. Now, those are big decisions, don't get me wrong a hundred percent, but they're so, so fearful of making the wrong decision. Yep. They never make the right decision. And again, I think this permeates all aspects of our lives. I say this as a prelude. I think that as humans, we are conditioned to not fail to fear failure in that monster that comes with failure.

It's fascinating when you start to conquer that monster. Right the first time, you know, you get knocked down and you get back up. You're like, wait a minute, I can get back up. And it's this really fascinating mentality. You know, people call it resilience, eh, that's part of it. Right? Resilience. You could be really resilient in an environment where you didn't necessarily always fail or that everything was on the line. Not a lot of consequence.

I think about my kids being resilient and they're not. But I think about they would be resilient and I think like, well, they're in a consequence re environment, like no matter what failure they had. They'll always be taken care of. Yeah. Yeah. Yep. There's a safety net there. So it's, yeah, it's not real failure. They haven't learned real, real failure yet.

But when you have all the consequence, like you tend to have in a startup for the first time, you're really looking failure, like you're looking down the barrel of that gun being. Holy crap. Like if I get this wrong, the consequences is all over me. Right. And I think that prevents a lot of people from starting from challenging failure or like from, you know, like Dede defeating that beast, so to speak. The monster that as you described it. Yep. Which I think is really AP prop.

Yeah. So go back in time a little, I'm trying to do this right now. Go back in time a little bit and, and. See what you recall. Like this is a muscle, but I think there's also, there does seem to be a little bit of founder, DNA attached to this. Mm-hmm. But I've definitely seen people turn the corner on this too. Like even if they weren't comfortable with it, I wasn't to the point we were making before, like I've realized that this is baked into my feedback. I'm unintentionally doing it.

It's just such a part of how I think in startup mode. Yeah. That it just comes through. And so clearly, like it's a well-developed muscle at this point. It's just muscle memory. I'm just, it just, it just happens, but. If you go back far enough in time, like do you recall when this was? When this was still like something you had to force yourself into or It felt really uncomfortable because at this point I don't even notice that there's a discomfort around it.

Yeah. It was Jason Barker. Remember the Jason Barker story where he used to beat me up every single day. It's really strange 'cause we had a kid, did we talk about this? Yeah. There was like the tough kid in the school. I wasn't there yet. I was still outside of the school system at that point. But the tough guy in the middle school was Jason Barker. What, what is going on here? I swear it was, it was just a pseudonym, right? And so badass name.

So Jason Parker used to beat me up every single day. I was probably first or second grade, right? Yeah. I was like very young. And every single day I would come home crying mind, like, this is like back in the eighties where like parenting worked a lot differently. Yeah. And, and I would come home crying and my dad would be like, you know what, you're a wimp, right? Like, come back to me like when you won a fight. Like that, kind of like tough love. Right?

And so obviously I was, there's no helicopter parenting that hadn't been invented yet. So every day, like it was his job, Jason Barker would just. Beat my ass. Right. Every frigging day for a very long time. I'm, I'm guessing it was at least a year, and every day I would go home and every day I'd be like, well, I can't beat him, so I'm just gonna take the L. Right. Yeah. Every single time. One day, not any specific day or for any specific reason.

I remember I was getting my daily ass beating, like adrenaline pumped through my little body for the first time. And I remember flipping Jason over and just getting on top of him. Just wailing him, right? Yeah. And I was like, oh. Lemme try that again. Right? And, and I say that because I remember like the level of adversity. I mean, when you're that young, it's like your whole world is right. Your whole world is being pummeled. And I remember the visceral reaction Yeah.

Of finally getting on top of my failure. I mean, quite literally in this case. And, and beating that monster. And I remember I got plain as day man. I remember that feeling. Like, if I can do this Yeah. Then what else can I do? Yeah. Yeah. Right. And at the time it meant up beating up other kids in the playground. But, but I remember it, it's still the sense of, it was the first time that I felt like, man.

Like all that failure, which was really me learning to defend myself turned into a strength. And it did. It did. And I've never lost a fight again. That's good. I, I don't imagine that happens very much anymore. I mean, thank God. No. 'cause I, you talked to Jason.

I did not get very big that not offended Well, for me, but, but I guess what I'm saying is when I think about that, again, you know, when, when you're asking the question, the first thing that jumps in my mind, that was exactly, you know, what that personal kinda like failure felt like. Yeah. And again, overcoming that failure. Now kind of a weird and a very eighties way to do it.

Still, yeah, it taught me like it was getting beat all those times that taught me how to win, and once I did and I had conquered that failure, it was like a superpower in something that I would reach back into, not the fighting part. Time and time. In time. Again, there's a confidence that comes with beating failure.

There is, and I think it's very interesting because in, in that case, you were sort of forced into that failure, right? You didn't choose, you weren't like, I think I'm gonna go try this fight every day of the week. That fight came to you was not, but here's what's cool about it. Here's what's interesting. I've seen this with a lot of founders, myself included. At some point you turn the corner on that and all of a sudden you go like, you can be proactive. You can choose to go and do something.

Yep. That you will probably fail at. Right. But without that fear, without the hesitation. Right. That's, I think that's the really amazing thing that starts to happen, and I've heard you say this before, but it's that failure breeds success. It does. And let me build on that. So as I'm going through those, you know, formative parts of childhood, yeah. I had a tremendous amount of failures and hardships.

Sure. But because I was able to kind of fight through and overcome them, and a lot of times when people kinda like talk through that journey, when you hear like overcome, you think of like rocky at the top of the stairs. Right. Do an eye of the tiger. Overcome is sometimes far less glorious. Yeah. Most overcome is sometimes fro across the beach. Right. You know, to get the other side right. It's not as glorious as it sounds, but when you've put yourself in a position where you are in a position.

Where you've gotten through that, you actually do know what the downside is. Yeah. You actually do know what that monster actually is versus what you put it together in your mind. And I think when that's the case, you're like, man, I've started with nothing. I've started with less than nothing. Yeah. So I know exactly what it means to go back to that. And I don't want to, don't want to. I can't. Yep. How did it work for you?

When, when, when you look back, uh, please don't tell me that Jason Barker also beat you up. No. When you look back, when you think about, uh, where you were in life and, and like where the first time you had a failure meaningful enough that at the time you didn't think you'd come back, but you did, and all of a sudden it clicked, you know, something that's really. Funny about everything we talk about here is that none of it is new.

Everything you're dealing with right now has been done a thousand times before you, which means the answer already exists. You may just not know it, but that's okay. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all dayLong@groups.startups.com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it.

It's funny, I'm gonna go back to probably very similar age. I would've been 10, and this was a, this was a very personal failure. I failed to do some of the things I was supposed to. I failed, was trying to. Expand my little growing cattle business at the time. Right. And I loved your farm stories, by the way. They're great stories. They're super, like for me, I mean, of course it's super visceral, but like, I think it's something that just like, they just feel easy to me.

They just feel easy to understand. Right. There's just something so basic about what happens there. And this is one of those like life and death stories, right? So I had tried to expand and I, I wanted to grow the, the operation a bit bigger because I started making fairly. Good money at that point, right? Yeah. At 11 or 12.

And like the, the cash had gotten real to the point where I had to file a C corp the, the year after because I needed a tax shelter. Wow. So, which is great, right? That's fun. But what happens is I start to try to expand this thing, right? And it came with all kinds of challenges, right? I got myself cash strapped in the beginning 'cause I, I overbought and then there was a, a longer winter. All these things happen, right? So everything's going. I love that you're leveraged on inventory at 11.

Right, like classic founder story.

I did, I leveraged myself, and then we had a longer winter than usual, so I had to feed longer than expected and it, it got ugly. I was literally shoveling driveways and plowing people's driveways to make cash to pay for feed for cows, right? That's where I was at, so I had to have a side hustle for my side hustle. What ends up happening is that because I, I was. Over my toes and all these things. I wasn't paying as much attention. I probably wasn't caring for things as much as I should.

One of them got sick and then spread some sickness, the others and two of them ended up dying. Right? And that was one of those moments where like, I failed and I failed hard, and it felt really bad, right? These things weren't. Pets, but they all still had names. At that point. You're 12, right? Like you don't, you don't know how to completely disassociate from that. And so that was one of those things where then I was like, I really questioned whether I ever wanted to do that again. Right?

Because I'd put myself through all this hardship. Everything just felt like it sucked. Then, you know? The spring eventually came and things got a little bit easier and I, I made peace with the mistake I had made and I told myself I would never compromise like that again. I would make sure that I planned all that stuff, but it was one of those learnings. Right. I understood now about like cashflow management. I understand now about inventory management. I understand now about Yeah. Right.

Planning for contingencies and business stuff, right? Yeah. So lots of little, little lessons came there from that failure and it sucked, but like I never would've. Come to that same conclusion just by sitting around and like planning. Right. You, you can't ab test a thought experiment, right? It doesn't work. Right. The, the deltas that we create and start a plan don't come from brainstorms, man. They, they come from bruises in most cases in your case, quite, quite literally.

Uh, in my case, it was an emotional bruise in your case. Uh, it was one straight in the eye.

But yeah. And it's funny 'cause they so many of these lessons and I think when we talk to lots and lots of founders, a lot of these lessons. Came at early ages, and a lot of them weren't necessarily, mine happened to actually be related to a business I was running at a very young age, but a lot of times they were just, it was just some other version of getting comfortable with some version of ass whooping and failure and overcoming it and then saying, Hmm, if I can do that.

I can probably just do whatever else I want to. Let me just keep trying. I agree. I also, Ryan, I don't wanna overlook the fact that you have to do this. Yes. Like it, this isn't like a luxury, like you can't run a startup and just always get it right. You can't even run a startup and get it half right. Correct. And I love when people look at successes of companies, you know, successful founders, and they're like, oh, they must have made all the right decisions.

Show me any successful founder and I will show you a trail of tears a mile wide. Right of all of the things that that went wrong in order for them to get there. And you get this later on in a cute documentary or how I built this podcast or something like that. And you get the real story when you actually meet that founder over a couple drinks Uhhuh and you get the unfiltered, you know, not safe for work, not safe for television story.

Yeah. And it is way more graphic and it is way more awful and you see it very personally. I think that for the founders that are out there that, that are in our category of kind of doing this for the first time. When they hear something like embrace failure, it sounds like a trope. Yeah. Yeah, right. It does. Yeah. But I don't wanna do that. Uh uh Like I just wanna do all the successful stuff. Right. And like you don't have a choice.

Yeah. Like the reason we're saying embrace isn't 'cause we love getting punched in the face. It's because getting punched in the face is the job. Yeah. Right. That's literally what we do for a living. And if you can't learn to get good at it, I think your boxing analogy was phenomenal. If you can't. Like take the hits, you won't win any fights. It's that simple.

That's right. Now if, if we get out of, you know, metaphors and analogies and things like that, if we get into really specific things, if you're gonna do marketing as an example, yeah. There are 20 different things that you need to do. Yeah. Only one of them is correct. There's no goddamn way You are gonna know which one of those is correct. When I used to run an ad agency, one of the things I used to say to my clients is, you pay me to be less wrong. Right. I never said, you pay me to be right.

Right. Like, you know, if you gimme money, we're always gonna be right. You pay me because I know how to be less wrong than you would be on your own. But both of us are gonna be wrong. Yeah. You'll just pay to be, to be hopefully less wrong. I'm gonna be wrong for less time than you would've been. Exactly. I mean, every breakout we've ever had started as some version of like an embarrassing version one that we shipped anyways. Right? Yep. That's the key. We shipped it anyways.

You just going back to the whole, you know, trying to steer the, the parked car until we're in motion, nothing is actually gonna happen. Right. I have bet To ship a page that converts it 0.3% rightly, and then, then two weeks later it needs to be converting at three. Right. I'm never gonna figure that out. Just by sitting there and extrapolating or simulating or guessing, right. You just have to put rubber to road before anything's gonna happen.

It's the same response I give people when they're talking about bringing on a co-founder. You know? Yeah. The, the most tired one now is I'm trying to bring on the technical co-founder, and I'm gonna say, I'm, I'm worried about hiring the wrong person. And I was like, you probably are hiring the wrong person. Yeah. And that is part of the process, which is why I always talk about vesting and cliffs and how to unwind this thing in the divorce papers before you get married. Yep. Because.

Like, there's no way you could possibly know this is the right co-founder. You can run all the checks and be totally wrong. In the same way, if investors really knew how to make good investments, why do they make bad ones? Yeah. If they're so good at making good investments, why do they ever make a bad one? Yep. Right.

And why is it the, the portfolio strategy suggests that you need to make 20 investments to maybe have two uhhuh, why don't you just make 20 good investments if you're so good at this? Right. It's not the way this works, not how it works, not the way this works. And because of that, we're not in the business where we get to say, oh, I'll just, I'll just hire the right people. I'll find the right co-founder, I'll get the right investors, et cetera. So I think that brings us to the next thing.

Which is okay, we get it. You've pounded us over the head that like you can't make the right decisions. So then what? So I just go around making a bunch of bad decisions. Doesn't that like totally lead to failure?

It does sort of, and what I would say is building this skill of failure is maybe one of the greatest skills I know personally that I've ever built. And I said that, you know, at the top of the, the show is like, I'm really good at failing. And what I really mean by that is I'm really good at recovering from failure. Yeah. Yeah. Yep. Very few people have both the ability and more specifically the confidence to go into something saying, yeah, I'm gonna take a bunch of hits. Doesn't matter.

It does not matter. I gotta say, and, and I referenced this, you know, because, uh, we write, we write like a newsletter paper about this before, you know, we do these episodes and I said, it's the, uh, the closest thing to a, uh, a potion of vulnerability. Which brings me back to my Dungeons and Dragons years. Uhhuh and being able to be good at failure means not that I have like this displaced confidence that's is like, I just somehow for, for no reason believe that I like will always be right.

Right. That I already know I'm gonna be wrong. That's the big difference. Yep. I already know I'm gonna be wrong. So I focus on the fact that when I am, which is likely going to happen, here's how I'll recover. Yeah. And I think that's the mastery of the skill. That's how it's tooled. And I think over time, you know, uh, it becomes a reflex, right? Recovery becomes a reflex because again, it's anticipated, it's expected, and then, you know, we just get used to that bounce back, right?

Yep. We, we know we're probably gonna be wrong. We wanna find out. How we were wrong, why we were wrong, which direction we were wrong in, and then we adjust, right? Like I think back to, just like to, to go back to childhood again. One of the, the, the comments that I would get over and over again, one of the reasons I was a desirable player on, on a soccer team wasn't because I was faster than most of the other guys.

It wasn't because I was, uh, more skilled than the guys I recovered faster than my competition. Yeah. One of the comments that we get all the time is like, my output was nearly the same regardless of how well I was playing or poorly, like didn't matter if I was having a bad day, didn't mean I would continue to have a bad day, right? Coaches would constantly comment on this like, you know, you can make a mistake and you get right. Your head gets right back in the game.

You can burn yourself out in the first half, but you'll get back in in the second half. You'll keep coming back in. It's because maybe I was just too dumb not to. I don't know. There's a point at which we just go like, and I heard you say it a minute ago. This doesn't just mean I'm have misplaced confidence, right? But we decide where to apply our effort and then we recover as quickly as we can. And we get back in, we see like, okay, that wasn't working. Let me, let me, let me try this again.

And I think that's again, to, I think it has to become a muscle, it has to become a reflex really, that we just recover. Resilience is one of those things. I've, I've heard that before. You know, I'll take resilience over brilliance and, and particularly like when the clock runs long. I think that does matter.

Uh, but I, I think that to your point, that's what starts to decide the difference between a, a founder who's really going to lament and failure, and one that's just gonna be like, this is part of the process. Think about from this, uh, perspective, think of how dangerous a competitor is that isn't worried about failing. Yeah. That's terrifying. Yeah. A competitor with lots to lose. Look, it's for as smart as they are, they have a weakness built in.

Yep. But a competitor that's willing to lose and keep coming back, that person is dangerous as hell. Yeah. That person is dangerous as hell. It's funny, I had this conversation with somebody a few weeks ago, was that that classic thing of one of my competitors, uh, just got funded. Now I'm scared of what's gonna happen with them. I was like, well, maybe. I was like, but you've been around for, for five years. They've been around for two. Yes. They just got But they just got funded.

Yeah, probably. 'cause they needed it. Right. You've established a business, you have recurring revenue, you're, you have a more stable position than they do now. They have something to lose. But so does this company. Right? They have a, they have a run rate. I said actually, of the competitors in your space, there's another one that I'd be more concerned about because they're more like you, right? Yeah. They've been around, they've proven that they can recover.

They're not moving as fast as this funded company, but that's one of those signals that like everybody gets really worried about. They get scared, oh, they're gonna come. They're gonna, they're gonna take us out. All that means is they've got a budget to fail against. So, yeah, there's some truth to that. And you know, we've done whole episodes on this. It's like, at which point you think you've seen exactly how the story's gonna play out. It never plays out that way.

No. Again, I'll go back to investors 20 investments, two successes. Yeah. If the people who put the money in all the companies are always the ones that are successful, then why are most of them unsuccessful? And let's take that a step further 'cause I can, I never wanna overlook this one. Most investors. Most investors, I'm talking venture capital investors. Are unsuccessful. Right. Most investors are unsuccessful at what they do. They suck at what they do. Yeah. Right.

Now, this isn't me like, you know, bone to pick with investors. Just math numerically. Exactly. Yeah, exactly. You can't fake it. There is a quadrant that they all pay attention to, and in the top quartile, the Sequoias, A 16 Zs of the world. Right. Are there year after year, all the time. Right. And then there's frigging everybody else. Everyone else, right. Yeah. In that bottom quartile of investors. Are the worst investors. Yeah. Now I say that to say they're probably pretty smart people.

Yeah. Like generally if you put them, you know, uh, compared to other humans out there doing their job, they're probably pretty smart people. However, the nature of this business does not breed certainty. In look, these investors do diligence. They try to do everything possible to hedge for success. Yet they consistently fail over and over and over. They even have the benefit of only picking the best players. Right. Right.

It's not like they get stuck with like a a 12th round draft pick kind of thing. Yeah, right. You gotta take one of these two. Like, I don't want either of those two. Like the top 10% of companies that are out there raising are the ones that are gonna get a check from anybody. Yeah. And then a percentage of those are like the top ones that'll wind up getting a check from Sequoia, et cetera. But Sequoia has a, a list of failures, a mile long. Right. And that's Sequoia, right?

They're by far the best at what they do. There is a great VC that invested in us years ago, uh, called Bessemer and you know, very storied fund, one of the oldest funds. And I invested in one of my companies. And I remember when I went to pitch them initially, they had this great thing and it was basically their wall of mistakes. And it was all of the companies they passed on and it was on their website if I, if I recall too. Right. And I thought, how smart, like, how, like humbling.

Yeah. Um, which you don't see a lot in the VC world. Um, how humbling to say we make lots of mistakes. Yeah. But guess what? The successes we make, the ones where we, you know, find that, that success they make up for, for the other ones. Isn't that kind of what we do though? That's exactly it.

You have to measure the failures, right? If you quit after your first failure, the measure's not gonna land in in your favor, right? But if you continue to fail small, and then eventually you win big, it bears out, right? And I think this is super important. I'm, I'm always thinking in terms of like, how can we create the smallest blast radius within failure, but at a really high blast frequency, right? Like, I want lots of little explosions and I wanna limit the damage. Why?

Because this is how we get there. Right. Right. I do love to break these things up and I think this is part of how you get more comfortable with it. Right. I'd rather push ten one percent risks than one 10% risk. Right? Right. Like, how can we test really small and, and again, default to reversible decisions? My thinking has always been, if I can roll it back, let's roll it out. Like what are we waiting for at this point?

If, if we build on that though, we've also taken this same skillset and holy shit, is it portable to the rest of your life? You know, as I've been building a house, a house, I should not be able to build that. I have no, like, prior capability to build, but I designed the house, I architected the house to an extent. I gcd the house. I was the master carpenter for the house. I've never been a master carpenter for a house. The master carpenter builds every single thing in a house, right?

That's what I did. And it's a good sized house. So like when we're talking about the scale of it, like if, if you're gonna pick up like your first starter project, it ain't a cabin. And so just the scale of, it's also kind of overwhelming. And I say this to say, the reason I was willing to do that in a trade that I've never been in, I mean, I did all of this for the very first time. The reason I was willing to do it is 'cause I knew I was good at failing and I've made plenty of mistakes.

Yeah. No lack of mistakes. Right? And some of those, those are fairly expensive, but I'm kind of like, so. I'll figure it out and go for it. And all the people in that world, uh, the other contractors and all the folks that are involved in it are blown away by this. Like they are blown away that someone's willing to just roll the dice on all these things and figure it out later. Like, but that's not what we do. I'm like, that's what I do. That's what I do. I'm really good at it. Right?

Yep. And what I tell them, I'm not good at being successful. I'm good at being, making failures and then figuring it out. These guys are not good at failing. Right. Like, they get one thing wrong and they're done for the day. Yeah. Like, well, don't know what to do here. It's time to go in for the day. I'm like, okay. And the one other thing I, I wanna apply this to, because I still think it, it, it's important, it's really led to me having no regrets in life. And when I say that.

There are situations in life that turned out regrettably. Yeah. But when I say no regrets, I mean there's never a time where I should have said yes and didn't say yes. Yeah, right. There's never a time when I can look back and say, ah, man, coulda, woulda, should have. I said yes to everything. To everything and lived a wonderfully colorful experiential life. I see you doing it with your family all the time. Yeah. You guys just explore like it's nobody's business.

It's the coolest thing, and it comes from this sense of why not? Yeah, yeah. Right. Why not? Why not? Yeah. I have. Endless tales that started off with why not? And that's the tapestry of my life and I'm, I'm very proud of it. I think one of the other ways that I've become more comfortable with this over time, but before I make the decision, like before I dive into something, right? Like whether that's adventuring around the world or building business, whatever it is, right?

I do try to think through, I may not know what the outcome of the decision's gonna be, but there are a few things that I can control, right? I can cap my losses in time. I can cap my losses, losses in cash before I begin. Right. And I can set some kill switches and I can sort of decide the stop rules. Yeah. Before emotion shows up. Before anything could, could kind of take me off of my game as it were. Right. And make me worse at failing. Right.

So part of being good at failing is, is sort of having a plan for how failure happens. Right? Right. You see the same. I do. And, and it's funny 'cause I apply that whenever I'm gambling, I don't gamble a ton. Uhhuh. I always go by the famous Alex Trebek quote, which says, uh, winning doesn't bring me a lot of pleasure, but I fucking hate to fail. Yeah, right. I hate to lose. Right. I, I was like, I just picture Alex Trebek saying that it cracks me up every time.

But like when my wife and I, uh, go to the casino and we go to the tables, we play blackjack every time. 'cause we can play forever. And, uh, we always be a small amount. Like we, we never go high stakes or anything else like that. Yeah. And. I always say the same thing as we're playing, wanting to stop taking my chips, and my wife never wins. She just takes all my chips. The, the second is I said, let's bet small and win big. Let's, let's make lots and lots of small bets.

And over time those compound and that's how we win. And it, and it somehow works. It somehow works. Maybe we're just lucky. But I'll say this, the reason it works for me. And I think for founders in life is because if you're willing, like you said, I love you said the kill switch. If you're willing to make those small bets over and over and over, you know your limits. You know your, your kill switch is you become invincible.

Yes. You become the person that's willing to go and go and go, and no one can knock you down. They can knock you back, Mario, with the invincibility star. Exactly man. They can never knock you down. And if you're willing and able to keep coming back over and over and over again, no matter what happens, you are as close to invincibility as you can possibly get in the startup space. When you show up as a founder with as Mr. And Mrs. Invincibility, no one can stop you ever.

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