Scaling up a business in an emerging industry, during a global pandemic is, to put it mildly, challenging! Thus, some level of small failures is to be expected, and, I have come to appreciate, welcomed. I know it may sound a bit odd: courting failure!
However, I have been reflecting on the value of failure, when integrated into the business in a controlled fashion. Indeed, it is estimated by business database Crunchbase that 70% of tech start-ups fail, more often than not within the first two years – I would suspect due to multiple failures across numerous functions, so managing the small fires, before they turn into raging infernos, is key. In a crowded marketplace such as crypto, it is quite literally adapt or die.
I have found Matthew Syed’s book “Black Box Thinking” inspirational stuff as the leader of a tech business. In it he argues that a continual feedback loop is crucial for never ending improvement. I like the idea of marginal gains, where the secret to success is not one thing, rather it is finding 20 things you can do 1% better, and the total improvement is vast. In my opinion, businesses do not succeed because of one factor, rather a subtle blend across numerous elements of the business, which of course can be easily destroyed if one function lags substantially behind.
In my opinion failure needs to be allowed to happen. I have seen some tech leaders extend this idea to the proud mantra: “fail fast and often”. Certainly, a smaller agile business should be able to fix bad decisions, poor products, or under-performing teams faster and with less damage than a larger business. The crypto industry is evolving at warp speed, so it is to be expected that sometimes the process of evolution is painful. There is even a school of thought that the faster the rate of progress, the greater the amount of firefighting you expect to see. In any event, any tech proposition should be constantly evolving, and it is the iterative process which creates successful business. One of my favourite examples of a healthy attitude to failure, from a physical engineering perspective, is James Dyson’s 5127 failed prototypes in his mission to build a cyclonic hoover. These many intentional small controlled failures, created his eponymous hoover, and an entry onto the list of the richest individuals in the UK.
Culturally, many workplaces have a culture of denial and blame; if something does go wrong much time is spent on analysis, finger pointing, and buttock covering. This is, somewhat counter-intuitively is often found in businesses that think they have a culture of excellence! Feedback is sometimes painful, but needs to be encourage and embraced, and team members of all levels should have equal input into analysing processes and decisions. A recent platform upgrade that Dacxi introduced involved almost every team within the business, and is currently receiving high levels of feedback (both positive and constructive criticism!) both internally and from our users. I am confident any tweaks will make it even better than the original version.
I also want to mention the gift for personal growth that failure offers. Inspirational memes are quick to point out all the successful people that have failed hard and gone on to achieve great success. Steve Jobs getting fired from Apple or Peter Thiel of Paypal losing 90% of the assets at his early hedge fund.
It would appear that set-backs have a way of spurring you on to future success. Certainly they are a great way of getting out of the comfort zone, developing resilience and encouraging growth. I am grateful to my school history teacher at 13 years of age for telling me I was unlikely to succeed in her subject, for my later Cambridge University degree in the same field, and to the odd person who told me I didn’t look like a natural runner for inspiring me to conquer the hardest last few miles of the London Marathon!
Finally, I feel strongly that failure is the lesser evil of regret. When I am recruiting I always look for a healthy mix of success, and hard-earned lessons from failure. From a business perspective if you can manage a healthy amount of trial and error, by focusing on key metrics, and keeping costs minimal, you can experiment with projects, products, and processes and find the best possible outcomes.
In my opinion, in our current extremely uncertain world, a comfort with frequent change, an appetite and appreciation for failure, will be a strong asset to managers and businesses in the coming months and years.
Adventures of a unicorn is a business blog documenting the daily life of tech startup in hypergrowth. Dacxi is a unique crypto business in the crowd lending space.
All views expressed in this blog are my own and do not represent the opinions of any entity with which I have been, am now or will be affiliated.