Startup CEO, 2nd Edition

Chapter 32Failure

Up until this point, I've focused on setting goals and doing everything you can to achieve them. It's time to acknowledge a timeless truth of startup life: there will be failures. Lots of failures. At a startup, failures aren't avoidable aberrations. They're part of the process. As I always tell employees, no one has made more mistakes in the history of the company than I have. And mine are usually the biggest ones.

Failure and the Startup Model

Perhaps major organizations with long‐tested, repeatable business models can afford to work on the assumption that all failure – or nearly all of it – is avoidable. Follow the rulebook; generate revenue; repeat. If something goes wrong, it's simply because you failed to follow directions.

Nothing could be further from the reality of startup life. Steven Gary Blank puts it in third place in his Customer Development Manifesto for Startups: “Failure is an Integral Part of the Search for the Business Model.” This is exactly true: you're creating a new product in a new market (not following an establishment rulebook) and the creation process will involve a number of false starts. That's certainly been the case at Return Path.

One of the most exciting moments in Return Path's history was when we acquired NetCreations, Inc. in the summer of 2004. In a single shot, we acquired the capability to solve one of the biggest problems marketers and publishers talked to us about: building a customer database. The NetCreations acquisition ...