Henry Ford, who suffered two flops before hitting pay dirt with Ford Motor Co., defined failure as "the opportunity to begin again, more intelligently." Campbell concurs. "You pay so much for these lessons, it's obscene not to apply them," he says. "You pay with financial capital, emotional capital, physical capital. What a waste to toss that aside. That's a tragedy."
Jerry Useem is an associate editor at Inc.
The Untouchables
Corporate human-resource directors despise nothing so much as a failed entrepreneur
If you're looking to rebound from a failed venture, don't expect the corporate world to extend a helping hand.
At least that's the message of the failed entrepreneurs we talked to. "I couldn't get a job anywhere," says Paul Wenner, whose Gresham, Oreg., restaurant went belly up. "As soon as people hear the word failure they think, 'Well, you're a flake."
"I was unhirable," echoes software entrepreneur Mike Campbell, whose Chicago-based General Optimization bit the dust in 1990. And he says employers were right to be wary of him. "Having hired a lot of people," says Campbell, "one of the last kinds of people I would hire is an entrepreneur. What they're really trying to do is get on your insurance, use your computer equipment and phones, and build up their bank account so they can give it another go. I've hired maybe 500 people. Two of them were entrepreneurs. Both of them went off at inopportune times to start their next venture."
Matt Davis, who unsuccessfully launched an entertainment guide for the Bay Area in the late 1980s, also admits he was crummy job material. "Savvy potential employers know that good entrepreneurs who fail are going to try again," he notes. "You try to reassure them that this is not the case, but they're basically right."
But what about people who genuinely intend to throw in the entrepreneurial towel--for good? After Rick DuhÉ's soft-drink company failed a decade ago, he insisted he was ready to do so, and meant it. Trouble was, nobody believed him. "I had to prove myself to the corporate world again, to reestablish alliances and expectations, to convince people I wouldn't become an entrepreneur again," says DuhÉ, who's remained a faithful employee of medical-services firm CorVel Corp. for three years now.
But DuhÉ, it seems, is a rarity. More often than not, the resolve to forsake company building for the life of a salaried employee proves ephemeral. "When you fail, a certain mild depression sets in, so you think, 'Well, I'll take a job from someone else," explains Matt Davis. "But when you get back in the corporate environment, so many companies are mediocre. You're like, 'What is this company thinking? Why don't we do it this way?' All of a sudden you're back in that sharkish, opportunistic mode.
"It didn't take too long," he says, "for that old feeling to come back."
Failure Hall of Fame
For the two biggest failures of all time, life couldn't be better
For the title of World's Biggest Failure, it's a close call between Kamran Elahian and Jerry Kaplan. Each tried to create computers that recognize handwriting. Each failed. Each in its turn left the biggest crater in Silicon Valley history--Elahian's Momenta Corp. burning through $40 million before folding in 1992 and Kaplan's Go Corp. quickly breaking that record by spending $75 million.
Yet their epochal screwups have hardly sent them into hiding. Kaplan wrote a best-selling book, Startup: A Silicon Valley Adventure, about his; Elahian's red Ferrari bears the vanity license plate "MOMENTA." And the venture-capital firm whose money Kaplan lost, Kleiner Perkins Caufield & Byers, happily gave him more to try again with an on-line auction service called Onsale. Meanwhile, Elahian found the funds to establish a multimedia chip maker called NeoMagic. Both companies went public last year, earning their founders millions.
Only in Silicon Valley. There, the rules of failure are different; far from amounting to a demerit, a past bankruptcy is almost a credential. Perhaps it's because high technology is so innately risky. Or perhaps it's simply because, in the valley, it's the venture capitalist--not the entrepreneur--who tends to shoulder the risks and eat the losses. Elahian speaks of his "philosophy of not putting my own money on the line." The small-time restaurant owner, by contrast, can seldom afford such a philosophy. He loses everything when he fails. It's a bit of a paradox: the greater the commercial risk, the less the personal risk.
Not that Kaplan and Elahian are completely unchastened by their failures. Both, for instance, were careful to bite off less on their next time out. "Onsale is the yin to Go's yang," says Kaplan. "It's low technical risk, low capital risk, quick time to market"--everything, that is, that pen-based computing wasn't. And Elahian, for his part, has made an art of the mea culpa. "I made bad decisions," he recalls telling investors. "If you want to shoot someone, I'm the guy." For big-time failures looking to make a comeback, therein may lie the most valuable piece of advice of all: say you're sorry.
