One of my favorite independent business documentaries is a movie called Startup.com. The documentary follows to men who started an internet business at the height of the "dot.com boom" in the late 1990's, when countless internet companies were starting and being funded at a remarkable pace by venture capital firms. The dot-com startup company, govWorks.com, raised $60 million in venture capital before becoming another statistic in the bust that followed.
The protagonists of the documentary are the two govWorks.com founders, Kaleil Isaza Tuzman and Tom Herman, who we follow as they launch their idea and grow it from cinder blocks and crates to eventually terminating hundreds of employees when they close.
I had the great opportunity to hear Tuzman speak at a small gathering as I attended business school, and the lesson he provided, which is not in the documentary, is one that from my experience I believe every entrepreneur should hear.
Tuzman told the story of how he continued to raise capital for govWorks, even as it became apparent that it was not going to work. He remembered the time when, after raising tens of millions of dollars from investors, he was called to a meeting by several of the key principals. In the meeting, he had to break the news to the group that the organization was no longer sustainable and that he was being forced to close the business for good.
As he recalled that time, sitting in a glass-walled conference room visible to the entire office, and remembered being so overwhelmed with regret and shame that he began crying in front of the group. Shortly after, the company closed and all employees were dismissed -- much like many internet companies during that time.
Fast forward a few months, and Tuzman received a call from one of the principals of the venture capital firm with which he had worked. The principal told Tuzman that he was funding another startup, and he wanted Tuzman to manage the startup.
Tuzman was confused and asked bluntly, "But I lost millions of dollars for you, why would you want me?"
The principal replied, "Exactly. I know you will never make those mistakes again."
This is a beautiful truth that most entrepreneurs fail to see. Our culture recognizes and rewards successes, as it should. Moreover, young generations these days are growing up in a "participation award" culture where everyone is recognized for just taking part in an activity. We continually try to eliminate failure from our lives, and it is having a detrimental effect on our ability to absorb failures.
I would argue that failure is a necessary component of success, and just like Tuzman's story, we should embrace failure and see it as nothing more than a data point for helping us become better decision makers.