The New Builders

CHAPTER NINEFailure, a Hallmark of Builders New and Old

In a long career as a writer and entrepreneur, Elizabeth was part of the early team at Wealthfront, a Silicon Valley company that was the first online financial advisor. Her role was running the company's personal finance and investing blog to develop trust with clients. Wealthfront is now a successful and fast‐growing company, managing more than $20 billion for hundreds of thousands of people in the United States.

But it took Wealthfront a while before it settled on a product that met the needs of its market. In Silicon Valley, course changes are known as pivots. At one point in the journey, CEO Andy Rachleff emphasized the necessity of pivots so often – “Everybody pivots,” he said – that one of the engineers created a faux cover of the book Everybody Poops with the word poops crossed out to read pivots. Well‐capitalized companies often change direction in pursuit of a new product or idea that they believe has greater potential. It's important that people don't see those course changes as failures, so Silicon Valley has come up with the pivot name for them.

Seth's business of venture capital is in many respects defined by failure. Even the best venture capitalists invest in more companies that fail than succeed. Across the venture landscape, over 65 percent of all investment rounds fail to return even the capital invested, let alone a profit.¹

Everybody poops, everybody pivots, and everybody fails. But, in Silicon Valley ...