After Failure, What’s Next?

Recently, I wrote a post titled After Your First Big Success, What’s Next? The comment thread was powerful and fascinating, as was the direct email feedback I got, including the following note:

“I think it would be interesting to hear your perspective on how an entrepreneur should approach “what’s next” after coming off a failed business. How should one manage their own emotions and their own perspectives post failure? It’s easy to play the blame game and it’s easy to be extremely hard on ourselves. There has to be constructive ways to move forward rather than destructive ways that could lead to lack of confidence, or depression.”

Having failed at a lot of things, I’m completely comfortable tackling this. But let me establish my bonafides first. My first company, Martingale Software, failed (we returned $7,000 of the $10,000 we raised.) My second company, DataVision Technologies failed. I didn’t have success until my third company, Feld Technologies. While my first angel investment was a success, I resigned as the chairman after the VCs came in and left the board after the CEO was replaced. In the late 1990s, what looked like my biggest success at the time, went public, peaked at an almost $3 billion market cap, and then went bankrupt three years after the IPO. And the second VC fund I was part of, which raised $660 million in 1999, was a complete disaster.

As the cliche goes, I learned a lot from these failures.

I’ve had many more. I remember firing my first employee, which I viewed as a failure on my part, not hers. I remember the first CEO I fired and staying up all night prior to doing it because I was so nervous and miserable about the decision I’d made to back him. I remember the first company I funded as a VC that failed and struggling to figure out how to shut it down after everyone else fled from the scene. I remember the first time someone threatened to sue me for doing a bad job for them (they didn’t.) I remember the first time I was sued for something I didn’t do (I eventually won.) I can keep going, but you get the idea.

What’s next is simple. It’s whatever you do next. In some cases this will be easy – you’ll already be on to the next thing before the previous thing you were working on failed. In many cases it won’t be easy – you’ll be wallowing in the quicksand of the failure well after the other bodies have been sucked below the surface.

How you deal with your own emotions, and perspectives, is an entirely different matter.

I love the approach of Jeremy Bloom, the CEO of Integrate (we are investors) who I have immense respect and adoration for. In 2006 at the Winter Olympics, he was the best freestyle mogul skier in the world. On his last run, he was expected to take gold. Halfway down he missed a turn and placed sixth. As Jeremy told me, he gave himself 24 hours to be angry, depressed, upset, furious, frustrated, confused, and despondent. I imagine him in his room in the Olympic Village systematically destroying all the furniture. One minute after 24 hours, he was on to the next thing, with the failure solidly in his rear view mirror.

Now, 24 hours is a short amount of time. I’ve often carried my failures around for longer, but never much longer than a couple of days. I separate how I feel from failure from how I feel about life and what I’m doing. Interestingly, for me, failure isn’t the thing that gets me depressed, it’s boredom combined with exhaustion. But that took me a long time to figure out.

I’ve found that talking to people about my failures is helpful. Rather than hold them inside, I talk to Amy (my beloved) about them. I talk to my partners about them. I talk to my close friends about them. I don’t ignore the failure or try to bottle it up somewhere. Rather, I set it free, as quickly as I can.

In our book Do More Faster, we have a chapter on the the wonderful story of the failure of EventVue. After it failed, some of Rob and Josh’s friends from the Boulder Startup Community had a wake for EventVue. We celebrated its life, buried it, and moved on. I loved this idea and have done it a few other times for failed companies. It’s important to remember that even in death you can celebrate the wonderful things that happened during life.

But ultimately, you have to know yourself. There is no right answer or magic salve for getting past failure. If you are going to be an entrepreneur, you are going to experience it a lot. It’s just part of the gig. Start by understanding that, and asking yourself what you are really afraid of. And, after you fail at something, let yourself experience whatever you want to experience, remembering that it’s just another small part of the journey through life. And then go on to whatever is next, in whatever time you are ready for it.

  • I’d heard the Jeremy Bloom idea as one from Jennifer Aniston who said she gave herself 24 hours to play victim after a setback.. really powerful idea!

  • …..well errr…Ok but then there is the financial aspect of failure.

    • Yup. When you have nothing, it doesn’t matter. When you have a lot, it doesn’t matter. It’s the in-between points, or the scary moments when you have a lot and think you could lose it all. Or do.

      When the public company I was co-chairman of went bankrupt, I lost about $100 million on paper. Since that was more than I expected to make cumulatively in my lifetime, it was just an abstraction. I hadn’t changed my way of living because of the paper money, so it didn’t impact me.

      However, when I subsequently got sued for $150 million, during a period of time in the early 2000s when CEOs were going to jail for fraud, I was terrified. Fortunately, I was only terrified for 24 hours. I had great advisors (and lawyers) who quickly helped me understand what was going on (a small group of creditors was going after our D&O insurance), I settled into “solving the problem.” Three years later we settled for $600,000 (after the creditors spent $3m on their side), all paid out by our insurance company.

      At some level it’s all perspective. I came into this world with nothing. After I go out of this world, I won’t have anything. The journey is what counts.

      • I lost $3.65M one afternoon while I sat at a conference table at Wasserstein Perella hammering out of minor terms on an investment that was to close in four days. It didn’t.

        The next 6 months was a blur of fuckity-fuck-fuck: IRS fined me $46k for using escrowed taxes to make sure my whole team got a final paycheck, etc., former employees were pissed (no one understood what happened), I wasn’t sleeping…

        It’s tough to let go of the notion that I failed (we’ve talked abt this). I’m not sure if I ever will, really, but I absolutely got up + hit the streets again consulting. The next several years were very, very good. It was weird how quickly it changed.

        • I remember the story well. You are a brave and powerful man. And you keep on trying, which is where the magic is.

          • Thanks. I’ve gained a lot of perspective from talking to you + Eric abt it.

            The hardest part was the feeling of responsibility I had for messing w/ my team members’ lives. That played games w/ my head for along time.

          • I’ve had some powerful moments of reconnection and second acts with folks I had failure with. I have many stories of second acts from Interliant, including a bunch of the folks I fought in the trenches with like Jenny Lawton, Frank Lincks, Frank Alfano, and Len Fassler. People – and moments – I’ll never ever forget – and will be loyal to forever.

          • While I wish I cld say that reconnecting w/ my old team was in my future, it prob isn’t.

            But- some of my dearest friends on the planet are former clients, coworkers + business associates (+ an unnaturally heavy weighting of VCs in there, which I cannot fully explain). No reconnection involved, but the loyalty part is there, as you shirley know.

        • DJ

          Awesome story. I’m going to start a band called “Blur of fuckity-fuck-fuck.” Please don’t sue me. 😉

          • If I ran a pharma company, that’s what I’d name a new anti-anxiety pill, or some new anesthesia with short term memory-blocking effects.

      • Good and honest post. Failure can lead to better things. But not without some suffering.

  • Gennady Shenker

    Excellent post, Brad.

    When I saw the title, for a second I was concerned that you rely on popular American psychology/philosophy: grieving forever, thus supporting oversized community of shrinks. I should have known better :). My bad.

  • Here is my story. The most difficult thing is to admit to yourself that the business isn’t working. You fight hard not to fail. You can always see hope: this big client, one more contract, new VP of sales, whatever. Until one day you admit to yourself: shit isn’t working.

    You can feel this coldness taking over your body. Fear of what now. Instantly, people depending on you, flash in front of your eyes. Your body shivers. But the more you repeat “this shit isn’t working” you get better. It’s like coming out of a closet. It’s like finally admitting the truth, getting out of a lie that controlled your life. We all knew long time before this moment that shit isn’t working. But it’s hard to face it.

    Once you embrace it, it gets better. You draw a line and start measuring what have you learned. And you learned a lot (hopefully). Before you tell dependents what’s going on, first you make a plan what next.

    I’ve spent all of my savings (broke to the bones), debts were up on me. My personal life collapsed completely. Number of friends lowered by 90%. When you reach that point, there’s no time for whining. You just have to figure something out fast or you’re going to end up pretty bad.

    I took a risk. At the times there were 3 of us left in the game. Quickly found some consulting business deals to pay the bills. Based on current revenue, went to the bank and asked for the loan. Got something (only heaven knows how), but one friend of mine guaranteed for me. I’ve used that for a new product/business. Revenue we had all went to pay the dues and it wasn’t enough. Phone didn’t stop ringing. Got sued for one of the debts. At the same time personal life collapsed. Completely.

    Debts were overwhelming, but we had to work on a new business between everyday shit. You don’t even think of the previous one except you are recalling every day for the mistakes you’ve made. You don’t want to make those again. 10 months later we got some investment. Since we learned our mistakes, we pivoted shortly after.

    Current status: we almost launched today (3rd party services went down so we had to postpone it – but you can still sign up to try it out!), debts are all covered by remaining revenues from old products and consulting business; I’ve sold that consulting business so I could pay out the bank loan. There are lots of ruins behind me, but life is to short to look back and cry.

    Embrace, learn and move on!

    • Intense story – it sounds like you have a will of iron, which I respect greatly. Congrats on driving through a very challenging time and having the ability to reflect / learn from it.

  • Joseph Burros

    This is a very helpful post. it is comforting to hear about all the failures Brad went through, but then still persevered.

    Something that I have been doing for decades is to look at the potential positive outcomes of the failure, and then to expect that something better will arise out of the situation. Surprisingly, a positive result almost always manifests from a so called failure. This has happened to me over and over again, and I have seen it happen to friends over and over again. In my current startup I have been grateful for almost every problem or setback I have had. I feel that making all these mistakes in the beginning costs me much less money and grief, than if I did them later on.

    I wonder what are some of the positive outcomes that came out of Brad’s failures. It would be interesting to hear about those.

    • I should write a series of “lessons learned” posts. I’d dissect a specific failure and then talk through the lesson learned.

      • Joseph Burros

        A “lessons learned” series sounds superb, but what I am talking about are actual positive outcomes that came about out of an opportunity that was made possible by the opening or change of situation caused by the failure. So something like, “Because of failure X, the positive outcome of Y was allowed to happen,” or “The positive outcome Y would not have likely happened, if I had not failed at X.” Failures can be blessings in disguise and beneficial realignments to a messed up situation. Many of my failures have brought clarity to a situation that I either was not aware enough to see, or not experienced enough to see.

      • Frank Traylor

        Please do. There is so much “how to” information out there. That’s valuable but how about all of the times you blindsided; the bad product decisions, the couple of words missed in contract negotiations, moving/hiring too fast, moving/firing too slowly, character misjudgments, the list goes on and the incidents and lessons are so much more interesting than just learning the right way.

        You mentioned how you felt failure when letting people go. There are many many stories surrounding personnel decisions. Recently I was having coffee with some young(ish) entrepreneurs and they asked for a single most important piece of advice. I’d like to hear other’s single “most” important advice but mine was – don’t run out of money. We discussed the many stories that come out of such situations; lost trust, lost focus, lost employees.

        So go for it. I want to sit around a business campfire telling scary stories.

  • I have failed a lot in my life. Sometimes though, the failure is just continually being told No.

    • Importantly, do you learn from it?

      • Yes, in many ways I do. The problem is now I am reliant on other people. In my career, I have only relied on myself. Since I started angel investing, I have learned miles and miles of stuff. But, I keep learning every day which is why I enjoy it. Totally frustrated right now on a few things though….grrr.

    • I don’t always take being told “No” as failure. That’s rejection or being wrong about something, depending on the context, which is altogether different. I love Chris Dixon’s soundbite (paraphrased) that in the entrepreneur world, if you’re not getting rejected at least one a day, you’re not working hard enough. Regardless of one’s position, if they don’t get told “No” very often or don’t fail at something very often, then they are stuck in a box and aren’t pushing the boundaries and settling for the status quo.

  • Failure can be a blessing in that it reminds you that no matter how smart you may be or how hard you work, success is never something to take for granted. So if you have been fortunate enough to have experienced success in your life, failure can remind you that you owe that success, in some part, to luck. With that realization, hopefully, comes a little more wisdom and a little more humility.

    • I’d underscore the importance of humilty. It’s amazing to me how quickly successful people forget humility, let hubris set in (e.g. “it was successful because of me me me”) and then get absolutely splattered by the next failure.

      • Exactly. Hubris = insufferable ‘know-it-all.’

        • I disagree. Hubris != being insufferable, a know it all, and some know-it-alls are not insufferable. It’s all presentation, like most everything else.

          Beyond that, Confidence != Hubris. Without confidence, I’d stay home and watch Netflix all day.

          • I guess it depends on what you consider to be insufferable.


    “…you’ll already be on to the next thing before the previous thing you were working on failed.”
    That’s the mark of a true entrepreneur! Fund raising, hiring, etc. are all things that “are needed” to reach the goal. But they also are all things that “get in the way” because they take too much time. Thinking up processes and procedures, envisioning prototypes, etc. happen at “mind speed” for someone with a clear vision. Once you leave the mind and enter the three dimensional world things slow down.
    It’s hard for me to imagine what it would be like to not have 20 or 30 ideas waiting for funding or other resources to make them a reality.

  • Steve Lerner

    Great post and the concept is terrific. Some will take it literally – 24 hours and done. I look at is as something that will have to be adapted to each unique situation. Point is, it’s like a project, and the project has to end so that life can go on – to what’s next.

  • Dave Linhardt

    I think this is the most important lesson I’ve learned as an entrepreneur. My second startup failed, and failed hard. It was successful for the first 3 years and completely flamed out due to litigation bs that we entangled ourselves in. It was horrible. It took me at least 6 months to get over it. I kept replaying my mistakes in my mind, thinking about what I could have done differently, etc. I was basically torturing myself. It wasn’t helpful, healthy or productive. Looking back, I was deeply depressed, and angry.

    I number of things and people helped me snap out of it. One of these things was a book my John Maxwell, The Difference Maker ( I think Maxwell nailed it with the following insight.

    “In regard to discouragement, there are two kinds of people in the world: splatters and bouncers. Splatters hit rock bottom, fall apart and stick to the bottom like glue. Bouncers hit rock bottom, pull themselves back together and bounce back up. The question is: Are you going to give up or get up? It’s a choice.”

    I realized I was acting like a splatter. I was stewing in my failure. This created so much cognitive dissonance it woke me up. I am a bouncer and I’ve always been. Somehow, this failure brought me to my knees and I couldn’t get back up. I lost my sense of self. It was kind of like Maverick in Top Gun when Goose died. I had a confidence problem. I needed to start acting like the bouncer that I’ve always been. That thought helped me move on and try again.

    There is no doubt that failure is part of the entrepreneurial process. To survive, you have to get comfortable with failure. This is a big challenge for overachievers, especially those who have done well in structured environments like school and employment. Find out what makes you fear failure and let it go. It doesn’t matter. What does matter is that you have the stones to lay it on the line in the pursuit of doing something great. This makes you a rare, precious individual.

    • “The question is: Are you going to give up or get up? It’s a choice.” Great quote!

    • Splatters and bouncers – I love it. I’ve always been a natural bouncer. I’m going to use this one a lot going forward.

    • That link is broken. Try instead. I just went and purchased the book and added it to my Kindle pile because that book sounds awesome. I love sound bites like the ones you mentioned.

      • Dave Linhardt

        Thanks Donald. That’s the correct book!

  • Great post! The greatest lesson I learned from this post came in the first paragraph.

    Look at the _size_ of your failures. They increase dramatically. To me that means that something important happens between the failures, that opens up the next, larger, opportunity.

    • On an absolute basis, yes. On a relative basis (relative to things like my experience, net worth, confidence) they probably stayed in about the same zone. I think your point is a good one however as each experience – successful or not – opened up the opportunity for the next thing I tried.

  • Chris Yeh

    The key is to ask yourself, “Is there anything I can do now?” rather than, “What should I have done?”. What’s past is past. Easier said than done, however.

    • @chris_yeh:disqus I appreciate your point, though an honest post-mortem assessment is a great way to learn.

      • I vote for both. An honest post-mortem – non-emotional, factual, and introspective – is always useful as long as you are searching for the lessons. Do it quickly and only do it once. Then focus on “what can I do now / next.”

  • laurayecies

    I think that the “talking to people about my failures” point is one of the most important – our culture of pride and confidence, especially in the startup world, works against this and therefore against people getting through rather than stuck in these difficult periods.

  • Richard Leon

    Thank you so much for this post. After experiencing failure and heartache with my small company I am surprised I am still around. I still have new projects on the horizon that are bigger and better. I have changed and adapted so much I would give a chameleon a run for his money. Rich and poor does not matter, it is getting through to a chain of succeses.

    The market keeps changing for mobile applications and I just plan to stay one step ahead.

    Again thank you!

  • Nice….

    I really dislike the idea of glamoring failure.

    Sure you learn but failing sucks. Big time. You learn, bounce back and the like but at its core, it’s a grating experience.

    Bob Dylan still says it best–“There’s no success like failure and failure is no success at all.”

    There is nothing like winning to make failing less painful. There is nothing like not needing success to make it more likely to happen.

    • I agree – I dislike “glamoring failure.” Every failure I’ve had sucked. There was nothing glamorous about any of them. But they are a reality of being an entrepreneur – you will fail a lot.

      • It is true that you can allow it to teach you – or try to ignore the lessons.
        One wise, one stupid – one choice!

        • Having recently read The Obstacle Is The Way, these words ring true.

          • Best quote ever: blessed are those that learn from their failures, thrice blessed those that learn from others.

      • But hopefully the lessons learned from each failure helps prevent that particular failure again–you just find new ways to fail and hope that you can synthesize your previous learnings to apply pattern matching the right problem solving skills to prevent a new, as yet unexperienced mode of failure.

        Personally, failure is not an option. I handle it by identifying mistakes that *I* made (or allowed), a great deal of self-reflection, identifying the mis-step(s), identify the ways that I may have avoided specific mistake(s) and march forward. I only consider it a failure if I didn’t learn anything from it. That comes from being a learning machine.

        In my reality, only the future counts. The past is history, something to study, something to learn from. Only what you do with what you have right now counts.

        I’ll stop now while I figure out how to avoid the potential failure right in front of me and rely on my observations of others and history to avoid it, then deal with the next potential failure around the corner.

      • I disagree. You are not glamorizing failure. You are discussing. This is the first I’ve heard of these and I’ve known you for a long time. People never discuss. Never.

    • Nope disagree. Nobody ever gives the hard stories, of where you got your teeth knocked in, Ever.

      • I agree that the stories are super useful (I have one written and unpublished) but I just don’t buy into loosing and failing during and after the process, learning aside, as anything other that pain.

  • Brad – You have handled depression openly – I think these are gentle and wise from Epicetus the stoic (based on the idea that externals are outside our control we can only control the internals from which all good or evil stems)

    1) “When you have shut your doors, and darkened your room, remember never to say that you are alone, for you are not alone; but God is within, and your genius is within, — and what need have they of light to see what you are doing?”

    So failure in this context is not an achievement – it is merely irrelevance (except what you allow it to change in you.

    2) “No great thing is created suddenly, any more than a bunch of grapes or a fig. If you tell me that you desire a fig, I answer you that there must be time. Let it first blossom, then bear fruit, then ripen.”

    Patience – especially when down.

    3) “Above all, remember that the door stands open. Be not more fearful than children; but as they, when they weary of the game, cry, ‘I will play no more,’ even so, when thou art in the like case, cry, ‘I will play no more’ and depart. But if thou stayest, make no lamentation.”

    Do as you can without complaint. There is nothing wrong with stopping when you can do no more. Find something you want to do and do it.

  • Very good discussion. Those who haven’t ailed haven’t tried. Being strong and bouncing back doesn’t mean you will make it but it does mean you haven’t given up. And that just may be enough on this crazy journey called life.

    • I encourage you to reconsider the attachment to “failure is not an option.” It is an option, and one that is sometimes the best option in a particular situation.

  • I do think people get over failure at different rates. For athletes who compete at such high levels, they have to. For me, I’m still getting over it, over and over again. I may never. Part of this is an impostor syndrome some experience, and part of it is that some of the lows others experience can be so low, the past can be retriggered at any minute. But, agreed that it is what does “after” the failure that counts — it could be the next day, or the next year, as people need their own time.

    • Yup. Everyone gets to define their own cadence. But having a cadence is important, at least from my perspective.

    • I agree with you that it’s definitely what comes “after” the failure that counts. One big lesson I’ve learned is that even though you might define yourself by your past failures, (new) people who meet you likely are more interested in what you’re doing NOW. I’ve worked for a few tech startups that didn’t turn out so well. For a while I really defined myself by that and was convinced that others were defining me by that as well. But I realized that no one cares about what you did before (unless you were *really* high profile to begin with) … no one cares and no one will define *you* by it.

      So by defining ourselves by past failures, we’re really risking that the version of ourselves that new people meet really isn’t our true self. Hope that makes sense!

      • Thanks for this, Sarah. I often get trapped into defining myself (and letting others) by the past, but it’s really about today that matters.

  • marcyswenson

    I co-founded one of the dot-com boom/bust companies (CPTH), and really struggled with the feeling of being a total failure, especially after having done so well for a while. So, definitely been there, and deep empathy for the struggle.

    I think one of the most challenging things about starting/running a company that fails is that your identity, which is so wrapped up in the company, becomes “someone who failed” until you move on to something else. That grey area where you’re post-failure but pre-something-else can be really hard.

    Now 15 years later, when I talk to entrepreneurs who are struggling with failure, I focus on what story they are telling about what the failure means. I find it interesting how stories about failure evolve over time. I have them tell a version where they are the villain, then another where they are the victim, and then a third where they are the best friend of the person it happened to. It really helps to open up some different perspectives. Then there is the possibility of crafting the story you want to tell, the one that feels powerful but still real, which is a big part of moving forward…

  • Jana

    Smoking awesome post! Sometimes I think building startups is really about conquering the relentless failure buddy. Always by my side creating troubles for my soul. I’m getting used to it. Not sure if my friends and family can get used to the insanity failure causes me. I think it’s harder on them. : – )

  • Kimberly Klemm

    “Whenever one door closes, I hope one door opens…” (Lee Ann Womack)….it’s all about Garth Brooks’ “The Dance”.

  • here. After failure, you need to realize what you have done wrong and mend that tack in future problems. That’s how you become a learned human being!

  • wow, great post!! I totally agree.especially about talking to everyone about it.that is the hardest, because peoples response also can either keep you thinking about it,those offering immediate advice and solutions vs those that just listen! I wrote about that struggle