Editor Profile - Denny K Miu was the founder and former CEO of two startup companies, Integrated Micromachines (now Touchdown Technologies) and Gigamon Systems. Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.
Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.
In earlier posts, I have written about my experience as a startup entrepreneur, both from the standpoint of how to make your company successful and how to maintain a good relationship with your investors.
Here I focus on an unfortunate part of the journey which is how to recover from a spectacular failure. Please note that I am writing from the perspective of a Founder/CEO which is a very unique breed. If you are a Founder but not the CEO, you can blame the CEO and move on. If you are the CEO but not the Founder, you already know what to do. Being a Founder/CEO means that you have no other marketable skill and when you fail, you're on your own.
The following is what I learned from my recent journey which I dedicate to my dad from whom I continue to draw inspiration.
10) Get up and get up now
This seems obvious and logical but in my experience, getting up quickly after failing a startup is never trivial.
One important difference between “crashing-and-burning as an entrepreneur” and “falling while riding a bike” is that for the former the chain of events tends to be very drawn out (over months if not over years), very painful, very costly, very emotional, very public, involves a lot more people (some innocent and some not so innocent) and could even be self-inflicted (making it that much more humiliating).
So my experience is that after the downfall, I was unbelievably exhausted, both physically and emotionally, which unfortunately tended to cloud my judgment and drive towards misbehavior. But fortunately for me, I had the benefit of a strict old-world upbringing and I could hear my dad’s stern voice demanding that I get up from the dirt. If it weren’t for that, I would have preferred to just lie there and enjoy the warmth of the sun.
Also, because of the large number of people and the variety of people involved with the failure of a startup (especially a VC-backed startup) and the dynamics between different participants (between co-Founders, between Founders and investors, between Founders and employees, etc.), it is never very clear whose fault it is that the company ultimately failed or what could have been done to prevent the catastrophe.
The truth of the matter is that everyone share responsibility for a startup’s failure and there are no innocent bystanders, not even the seemingly powerless employees. So it helps to remember that startup is not a spectator sport and everyone was an intimate player. But the Founder/CEO is the self-appointed captain and therefore must take the ultimate responsibility for a sinking ship (or a falling bike). So it doesn’t really make much sense to go around pointing fingers for your own fall.
On the other hand, by nature, as individuals with reasonable intelligence, most entrepreneurs are inundated with self-doubts and introspection (which is true even during time of success). So your head would be ripe for an implosion (as was mine). You would have many unanswered questions. Is startup for me? Is the failure due to my own inexperience or just bad timing? Or is it that I had bad advice or that I was surrounded by incompetent people? Is my family ready for me to do startup again? Can I even afford to do it again, now that I am completely broke and have to start paying back all those personal loans?
Fortunately I had a good teacher and I knew that in one respect recovering after the failure of a startup is very similar to recovering after a fall while riding a bike, which is that I must first decide if I want to ride again. In another words, I must first make a binary decision, which is whether or not I want to continue to be an entrepreneur. If I believe that being a successful entrepreneur is in my destiny, then there is no point of crying in the dirt. But if I believe that I don’t want to be an entrepreneur again, then I can do whatever I want and heck with what other people think.
Again fortunately in my case, and I suspect it is true with many fellow entrepreneurs, I was totally unemployable. No startup CEO would ever hire a failed CEO knowing that I am not a follower and I was just buying time. Or that if I were to stay, I would never be completely loyal and that I might even have ambition to compete for the top job. On the other hand, even if I don't join a startup, I also know that if I were to take a non-CEO job working for a big company, life would be so miserable for me anyway (and worse for the one who hired me) that I could never stay there for very long.
So not having any reasonable alternative made it much easier for me to make a binary decision. As I said to my wife, “I have to do this (again). You knew I had a disease when I left the comfort of academia to start my first company. But now I am convinced that the disease is terminal and there is no possible cure, therefore I must start my second.”
So there you have it, after crashing your startup, you really only have two choices. Your first decision is the most important one if you were to eventually recover from your failure. Either you walk away from being an entrepreneur forever and never look back, or you stop crying and get your butt off the ground and start riding again.
9) Check your bike before you ride again
Chances are that besides your career, both your family and your health are in need of some long-overdue repairs. Now is a good time to catch up. Think of your family, your health and your career as the three legs of your three-legged stool. If you wobble on one but solid on the other two, then at least you have a fighting chance. Don’t try to restart your career if you don’t have the physical endurance or if you don’t have the support of your family.
Take some time off. Eat well and exercise regularly. Spend time with your family and tend to their needs. They are much more robust than you give them credit for. Typically your family has simple desire; they are happy when they see that you are happy. And you can be truly happy only if you believe in your own destiny and re-engage quickly to work towards achieving your dream. If you have any doubt, now is the perfect time to walk away and blame it on a broken bike.
8) Keep your eyes on the road
There is an old saying in Chinese, “If the mountain is without tigers, even monkey can be king.” In other words, don’t take your failure too personally. My experience is that success has a lot to do with our environment and other contributing factors that are completely beyond our control (what we sometimes call bad luck or bad timing).
If I think of my own journey one startup at a time, it was a miserable failure. But if I think of it as a piecewise continuous journey that happens to have multiple rest stops, then my life as an entrepreneur has been a spectacular success.
As entrepreneurs, we need to be both retrospective and introspective in order to effectively learn from our mistakes, but it is just as important to keep your eyes on the road and focus on the opportunities (and potholes) ahead of you. Keep looking back helps no one and will surely make you fall again.
7) Don’t touch old wound, just let it heal
Failure sucks and it sucks because you have irreversibly destroyed lots of relationship and you have caused profound pains to lots of people including their families. You also have lost substantial amount of other people’s money and no one will ever forgive you for that, no matter how much they tell you otherwise.
So there are plenty of wounds even though they might not be physically visible. These wounds are too raw to be touched so soon. Stay away from your former colleagues and your former investors for as long as you can. Don't try to make it up to them and don't try to shift responsibility to make yourself feel less guilty or less embarrassed. Whatever you do, don’t make it worse. You have already done enough.
Go make new friends. Try to do your next startup with different people. Go find a new team and new investors. Find new market opportunity. The old one is dead; no need to beat on the proverbial dead horse. It is time to move on. Move across the street, move across country. Give it time. Give it distance. Time might heal wounds but time does not remove scars. Only success can remove debilitating scars.
6) Don’t complain, don’t explain
Whatever you do, don’t start a Blog immediately after you fail. Don’t try to make yourself look smart. Don’t try to rationalize your failure. Talking about failure doesn’t make failure go away. It just opens yourself to saying things you will surely regret in later days. If you inadvertently discover you have a knack for standup comedy, then give up being an entrepreneur.
In Silicon Valley, people say we romanticize failure. It is not true. Americana does not tolerate failure. We just don’t overly penalize people who fail because we also enjoy seeing the spectacle of them rising from the ashes. The only thing that we hate more than a loser is a sore loser. Be careful with what you say. No one remember what you say, but they most definitely remember how you say it (especially if you whine).
Therefore, instead of talking, you would be much better served if you just shut up and peddle like hell. Now is not the time to seek fame. With success, you will have fame. It is much more fun to do a Blog when you fully recover and share your hard earned experience from the vantage point of sweet success (as I am now). Otherwise people would make the obvious observation that you are nothing but a wannabe.
5) Don’t get into other people’s way and don’t wish for other people’s fall
When we do startups, we don’t just leverage. We levitate. We “will” our startups into existence. And we defy all laws of physics by tapping into the positive energy of our surrounding. We create opportunities; we don’t destroy.
You are now at your most vulnerable and deflated stage of your life. You don’t have any money. You don’t have any friends. Your reputation is in complete ruin. As a result, you can’t afford to be negative and you can’t afford to be surrounded with negative people. Not having the ability to be constructive doesn't give you the license to do destructive. Whatever you do, stay away from bad Juju.
Now is the time to be positive and to levitate yourself. Now is the time to fill your head with positive thoughts.
Be careful with whom you hang out with. Unfortunately, you need to stay away from other failed entrepreneurs, at least for now. And in particular you need to stay away from people who hold a grudge on you or whom you have a grudge with. Don’t get mad; don’t even try to get even. With success, you can get them all.
Misery breeds misery and success breeds success.
4) Don’t over-compensate
Just because you fell on the left last time doesn’t mean you will fall on the left again. Most entrepreneurs over-compensate by learning their mistakes too well. If they failed because they had too much money, they will try to do the next one bootstrapping. If they failed because there wasn’t enough understanding of the market, they will try to do the next one with a bunch of salesmen.
You need to learn from your past but you need to keep in mind that every opportunity is different. Time does not stand still and the rest of the world will not wait. Don’t be a victim of your own experience.
3) Try not to carry extra baggage
Entrepreneurs do startup for a variety of reasons. The successful ones tend to do it because they want to change the World. But keep in mind that company building is a team effort so you need to bring a lot of people together and properly align their interest. But everyone is different and everyone does things for different reason. Some do it for fame. Some do it for money. Some do it for power. Some do it for satisfaction. Some even do it because they have no other choice (like me).
As an entrepreneur, you need to understand that as you start to bring more people together, the intercept of their overlapping circles of interest will get smaller. In the limit the ONLY thing all of them would have in common would be money. Every body wants money (and each want a little bit of something else). So regardless of what you as an individual might want, as the Founder/CEO, you only job is to make sure that you concentrate on making money. Everything else is extra baggage.
With money, you can now satisfy their other needs (give them more power, give them fame, etc.). But if you can't bring your company to a moneymaking mode and your company is forced to shut down because your VC's won't give you more money, then no fancy auxiliary benefit is enough to make up for the difference.
Having a great lifestyle is no substitute for having a sustainable life.
2) Learn to ride alone
Entrepreneurs are never lonely; they are constantly surrounded by people (especially when the company is successful). But entrepreneurship is a solitary business. You don’t really have any peers. From talking to other entrepreneurs who have failed, the one thing that we can agree on is that we all wished that we had listened more to our own instinct.
It turns out that entrepreneurs are different in that they are better in parallel processing and they can do free association better than anyone else. Like hungry dogs in the wild, we are a unique breed. Sometimes we forget or we choose to ignore that differentiating difference.
Whatever you do after you fail, don’t lose your confidence in yourself and for goodness sake, don't dumb down and don't allow yourself to be domesticated. There is no guarantee that just because you try again, you will necessarily succeed. But if you fail again because you have elected not to trust your instinct, then you are screwed for eternity.
1) Get ready for the next fall
Just like riding your bike, you will fall more often and you will fall harder when you THINK that you know how to ride. Whether you are a successful or a pre-success entrepreneur, you will surely fall again. But if you are afraid of failing, then you have no business being an entrepreneur.
My final advise has to do with another old Chinese saying which is that “Grass survives the heaviest of rock.” The emphasis here is “grass”. If you put a rock on a flower, flower will die. If you put a rock on grass, grass will find a way to survive.
I happen to believe entrepreneurs serve an important societal function. We are here to overcome tyranny that inevitably emerges with unchecked free-market capitalism. But that doesn't give us the right to think that we are “entitled” to special consideration.
We are not entitled to anything. We must not think of ourselves as flowers that deserve sunshine and nutrients. We must accept that we are the lowest form of beings, or we won't find the courage and the clarity to survive.
As I learned to say in America, as entrepreneurs, your ass is grass and the world is your lawnmower. So don't go looking for “love” in the wrong places (except from your family).
In summary, as a failed Founder/CEO, you're absolutely, unmistakably and unmercifully on your own. Good luck.
--Denny--
Click here to read other chapters of Denny's 2nd Book »
Check below for some very helpful comments shared among entrepreneurs on how to survive founder burnout.
