Make Failure Good for You
Richard Keith Latman thought he was creating his legacy when he launched his budget PC-manufacturing company in 1999. But after the attorney general's office filed a formal action against Microworkz, Latman's life was irrevocably changed. The promise of becoming Silicon Valley's next internet billionaire disappeared overnight, and Latman moved on to lose 11 jobs in 12 months, as well as go through a divorce and filing for personal bankruptcy.
It took some time, and more failures, but Latman finally found his way back to the industry he loved, selling cars (which he did in record numbers). He simultaneously developed a CRM tool for car dealerships. Today, Latman is once again at the top of his game as the CEO and co-founder of iMagicLab, a software company focused on the automotive industry. He's also founder of Latman Interactive.
Latman has experienced the peaks and valleys of life and entrepreneurship many times over, yet his uncanny ability to see the next opportunity where no one else does propelled him forward to eventual success and happiness.
"The skill is in getting up to 50,000 feet; above your issues, problems, and opportunities, and being able to look down as objectively as possible to see if there is a path," says Latman. "If we had to play the role of the marble in a maze it would be much harder to make it through. Look down on the puzzle instead."
Through his harrowing journey, Latman always kept his eye on his core talents to find his next opportunity. "History is the best judge," says Latman. "What are the core skill sets that you bring to the world? Always recognize what you do well and what you do poorly and stick with what you do best."
In retrospect, Latman recognizes that he never had a track record of raising money, building big teams, or managing inventory. "If I had stopped to assess my skills and experience when I planned that business, I would have surrounded myself with a completely different subset of people," he says. "Entrepreneurs often look at themselves as who they want to be, not who they have a track record of being."
In his book, The Good Fail, Latman tells his story and explains why failure can be a necessary steppingstone to success. "A 'good fail' is a failure that has a learning value greater than the offset collateral damage," he says. "These failures lead to new ideas about customers, innovations, and business plans."
One of the lessons that Latman took away from his years of bouncing back is that a good opportunity solves pain. "Everything I've done in the last 15 years is based on evaluating how my idea changes what already exists and how will it improve the situation for my prospective customer. Don't open another ordinary sandwich shop when the world doesn't need it; create an opportunity that makes a difference."
Here are some other rules that Latman lives by. It's hoped these will help you to make every mistake a "good fail."
Fail quickly. To prevent your business from failing, allow your decisions to fail quickly. If you make a poor decision, learn from it, retool, and continue to grow by changing and moving.
Launch early; don't wait for perfection. Get your product into the marketplace fast to begin assessing whether your ideas will work in the real world. This is risky, but you have to be willing to do things differently. People want to help; get market feedback, adjust, and move forward.
Don't rely on experts on the Web. People are willing to take the generic opinions of people who write, but these books and articles are not meant as road maps. Find the nuggets in each story knowing that they are designed to pick you up and get you to move; don't make your decisions based solely on the word of others. You can't be a sheep at one moment and a leader the next.
Have faith in yourself. If you doubt you'll be successful, you're right. Your perception of yourself will shape the kind of company you run and your odds of success. If you don't have confidence in yourself, no one else will.
Set expectations with investors. Whether you are dealing with friends and family or angel investors, make your plan clear. Don't let them run the show; this may lead to poor decision making and disappointment all around. Let them know exactly how you will use the funds and when they can expect a payoff. Clearly outlined plans will increase the odds of receiving a second round of funding when you need it.
Latman joined me on The Million Dollar Mindset podcast last week to share more of his story and "good fail" tips. I enjoyed, and learned from, his fabulous insights and hope you will, too.