Learning from others’ mistakes helps avoid making your own

As an entrepreneur, I had to learn to give up on achieving perfection.  Entrepreneurship is the art of compromise between your vision and what you can accomplish today.  Perfection may be possible, but it takes too long, and the market keeps changing.

I have placed a quotation on my email signature from Nasreddin.  It reads “Good judgment comes from experience.  Experience comes from bad judgment.”

One of my daily afternoon energizers is reading Gaping Void (www.gapingvoid.com).  It’s free.  Just subscribe.  A recent post titled ‘The Eternal Option’ discusses the value of failure. In this post, an article from Scientific American describes how the brain adjusts by learning what works and what doesn’t.

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A friend of mine was raising money once, and things were going great.  He met an investor who looked over his offering and asked him, “Have you ever had a big failure?”  My friend proudly stated that he had not.  The investor stated “That’s too bad” and did not invest.  The deal went bad.  Is there anything that my friend might have done to avoid it?  Maybe.  With more failure, he might have considered more options or created fallbacks.

A young entrepreneur will build a plan.  I like to ask the question, “What are you going to do if that doesn’t work?”.  An experienced entrepreneur will have one, two or three alternative plans or fallbacks that may allow him or her to still attain their goal or to achieve a sufficient percentage of their goal to payback investors.  A novice will defend their plan, taking a make-it-or-break-it approach.

Failure is a necessity of innovation.  Doing something for the first time is a trial-and-error approach.  Rarely will anyone get it right the first time.  I have seen innovators reach a technical outcome — mind-blowing breakthroughs — without understanding how the outcome was achieved.  Knowing that something is possible without understanding it, is like a carrot dangled in front of a donkey without a path to guide it to its destination.  Many an entrepreneur has chased innovation like a map to an lost gold mine — sacrificing themselves and everyone around them.

The news (and science-fiction stories) talk about achieving too much success too early — without understanding unintended consequences — run-away bacteria, robots that are too intelligent and doomsday weapons.

They say you need to learn from your mistakes.  However, I realized early in my career that I could make enough mistakes to fill a lifetime, so in order to succeed I needed to learn from everyone else’s mistakes  and skip making them myself.

An entrepreneur needs to be humble — to recognize when one’s success may have exceeded one’s efforts and skills.  In those cases, it may be necessary to blend a little success with a little failure to take a measured approach.

It is possible that the difference between a good entrepreneur and a great entrepreneur is learning how to fail quickly, gracefully and with minimum downside.

Karl Dakin is principal with Dakin Capital Services LLC. Reach him at kdakin@dakincapital.com.