Risk, failure, and other mystifying startup tropes

In my previous life as a graduate student in the humanities, we used to talk a lot about tropes—the modern usage being a reoccurring rhetorical motif or device (in short, a cliche born and over-used within a particular genre of literature or a set of critical works).

Tropes however, are in full display everywhere. For example, in the startup literature, we use “risk”, “fail”, “sweat equity”, “these are good problems to have”, and a host of others as accepted short-hand for the the personalities, pitfalls, mistakes, and lack of prep and planning involved in launching and building companies. From the best startup rhetoricians, one can glean useful wisdom from these tropes. From others, not so much.

Let’s take the fail trope first, because that’s a big one. Failing, even multiple times in multiple ways, has become a bit of a badge of honor. In fact, if you really want to have a career in startups than you better be out there failing now. It’s the best way to learn.

I’ve had quite a few long conversations with entrepreneurs about their failures, all of which have been spun admirably into exciting tales of daring-do. In the back of my mind however, I find myself thinking “wow. that was stupid. I pretty much would have made the exact opposite decision in that scenario…and in fact, it’s amazing you got as far as you did.” I also find myself thinking about waste before totally blanking out and thinking about other things.

Now, I don’t mean to imply that A. failing is bad, B. it does not teach you something, C. I am infallible and have not and will not make mistakes, or D. that I will not at some point fail in some future startup. In fact, I fully expect to fail at some point.

However, when I hear a tale of woe involving an entrepreneur whose core product made use of an algorithm written by an academic who clearly states in his website that any commercial usage must have written consent by him…and that entrepreneur never bothered getting permission…because they thought nobody would find out…

Well….then I have to consider the entrepreneur just a bit arrogant, and not a little short-sighted.

And this gets at the profile of an entrepreneur. What about the person who starts a company makes them ideal? Well…the “ideal entrepreneur is a little bit crazy"—"crazy-smart" anyway.

They “fly by the seat of their pants”. They “do now, apologize later”. They “hope” to be sued by big companies, universities, and past partners because “that’s a sign you’re successful” and therefore “those are good problems to have” because “nobody cares about legal shit if you aren’t successful.”

The real trick is being able to manage the risks you’re taking, and apparently there is a nifty quadrant to help you figure out just how important it is for you, as an entrepreneur, to react.

risk framework

Now, we know that old people suck at startups, and the best ones match a profile:

If you look at Bezos, or [Netscape Communications Corp. founder Marc] Andreessen, [Yahoo Inc. co-founder] David Filo, the founders of Google, they all seem to be white, male, nerds who’ve dropped out of Harvard or Stanford and they absolutely have no social life. So when I see that pattern coming in — which was true of Google — it was very easy to decide to invest.”

but one wonders…how well do most of these young white male drop outs actually succeed when it comes to risk assessment. I guess not that well considering the dominant trends in new ventures (more fail than not).

Still, it doesn’t particularly matter:

But it’s not necessarily a mistake to try something that has a 90% chance of failing, if you can afford the risk. Failing at 40, when you have a family to support, could be serious. But if you fail at 22, so what? If you try to start a startup right out of college and it tanks, you’ll end up at 23 broke and a lot smarter. Which, if you think about it, is roughly what you hope to get from a graduate program.

Presumably these young ones do eventually grow up and start new ventures having learned from their mistakes, thereby becoming repeat entrepreneurs (who tend to be more successful) and eventually old entrepreneurs (at which point I guess they start to suck).

Which sort of begs the existential question: What, in the end, does it all mean? Or, what is the significance of all these tropes?

I can’t answer that for anyone but myself and I’m not an expert on startups, so here goes the totally personal answer. For me, these accepted tropes mean never quite matching the profile of your average entrepreneur. Moreover, it means accepting that fate as good and fine because I find myself deeply at odds with the way many of my fellow entrepreneurs accept the tropes without conflict and with the way they assess risk. It means that I will not have the same relationship with failure because imho no amount of spin makes up for short-sightedness, arrogance, or plain stupidity…especially oft-repeated.

It means that when someone questions my appetite for risk as a means of subtly indicating that I don’t belong in the startup community…that I am completely comfortable saying “You’re damn right!”…at least not in so far as these tropes can ever really suit me.

What it doesn’t mean for an instant however, is that I will be staying away.