Young startup founders often ask me for advice, and one of the important lessons I have learned over the years is that the old adage, ‘Failure is not final‘, is completely true. It has been my experience that failures or setbacks are temporary and informative rather than a final, damning indication of your ineptitude, or the unworthiness or unmarketability of your idea.
Disruptors Blaze Difficult Trails
Founders who are disrupting (and every now and then, obliterating) industries necessarily see the world differently than other people do; they choose not to tolerate the status quo and decide to build a new normal that others cannot even dream about.
It may seem cliché but it’s true: living out on that leading edge is not easy. Standing in that role is messy, the path is muddy and the frontier is grueling to reach. But the reward for building that road is so worthwhile.
I have experienced the most devastating ‘failures’ or missteps but have come through those to find success time and again. And even though it’s hard, I try to keep that in mind for the time the next ‘failure’ comes around.
Keep The Low Points Close In Mind
Coming out of University, I joined a startup company where the two founders didn’t get along. They had never actually met face-to-face, and it turned out that one founder had embezzled money and locked the other out of the accounts.
At the time, I was working toward my master’s degree part time, but I was also (always) drawn to the entrepreneurial world.
Unfortunately, the startup couldn’t pay me a salary, and it was a very difficult time. Working in tandem, the founder who was locked out and I spent a year and a half just fighting in the courts to gain access to the accounts of which we had been locked out.
At the time, I was questioning my own choices, and I felt that same questioning coming from others in my life. I was beginning to feel like a failure. When someone asks, “What do you do?” and you respond, “I’m an entrepreneur,” you can feel their unspoken criticism. If given a voice, that criticism might sound like “Oh, so you’re unemployed, and you can’t get a job.”
Actually, as a part of a failing startup that did not have the means to pay me a proper salary, that assessment was fairly accurate. It’s certainly a critique I levied against myself from time to time. It’s easy to feel insecure about your own worth and sense of success, especially when all your schoolmates’ careers begin to take off. Those close to me were saying, “Come on. You’ve been doing the startup thing… This is a joke! You know, other people who went to University with you are now at Goldman Sachs, McKinsey & Co or Google. Here you are, not doing anything.”
And there we were, the two of us, hustling every day and sleeping in our tiny office. We were struggling to figure out what to do. We hadn’t paid the rent, we were in the midst of this lawsuit, and we had run out of money. I remember very clearly one particularly low evening. We came back from dinner to the office. There were papers pertaining to the lawsuit strewn about the office, and I thought to myself, “How am I going to get out of this? Oh my God, I’m going to have to apply for a real job.” That reality check was such a blow to my ego.
I believe that that is a pretty typical low point in any entrepreneur’s journey, and I’d like to say that it doesn’t get worse than that. Unfortunately, in my case, that wasn’t true, because after that, I swallowed my pride and applied for those corporate jobs.
I really wanted to work at McKinsey or Goldman Sachs because they were companies I respected, but I didn’t believe I had the math skills to pass even the first round of their screening process. I applied anyway and got rejected from both. That represented a whole other level of discouragement. I also had some early experience and success with Google ads, so I applied to Google… But I didn’t get a job there either. Looking back, that’s one rejection I can be very grateful for. If I had merged paths with Google, my career trajectory would’ve been so different!
Believing in Yourself Actively
Another important concept that ultimately successful entrepreneurs come to understand is that you need to believe in yourself enough to keep going. I can honestly say that even in the midst of all that rejection and failure, I still had faith and confidence in my abilities to succeed in some way. That faith didn’t have to be present in every moment of my day, and on particularly challenging days I often struggled to find it at all. But when I got really still and thought everything through, that trust in myself was something that never left me.
Using Failure & Rejection As Motivators
Those rejections lead me to think, “Someday I’m going to hire McKinsey and Goldman Sachs,” which I did for our M&A process. Goldman ran our sale process which led to Blackstone buying the company for $780 million. And when Google rejected me, I thought, “One day I’m going to compete with Google!” which I also eventually went on to do. As you can imagine, it was particularly gratifying to have Google Ventures invest in our company just a few short years later.
Failure Often Mixes with Success
The road to success is not linear. There is a lot of failure that happens even in the midst of steps forward. After we had developed our mobile advertising company concept, Vungle, and had been accepted into an accelerator program in Silicon Valley, we still faced a great deal of rejection, failure and ridicule. We basically cyberbullied our way into the program (you can read more about how we got there here). All the other participants had computer science degrees from Stanford, MIT or some Ivy League school or were employees of Google or Facebook; we were the joke of the program.
Seeing a Different Future
My cofounder and I were both ridiculed, and the feedback we got from many VCs was not very positive. We had a vision to capitalize on what we saw as the fast-approaching tidal wave of opportunity in mobile gaming, but many VCs simply asked, “Why don’t you build a web advertising solution?”
We were young and overconfident but not particularly articulate. We had the hubris to see the future differently than they did. To those questions, I answered, “Why would I make a Web solution? Mobile is the future.” They argued that it was too risky, that games are a hit-or-miss business and that this mobile ad network for games was just “probably not going to work.”
In meetings with VCs, we were laughed at & it wasn’t uncommon for people to walk out halfway through our pitch or end the meeting early.
Continue Refining Your Ideas
When I gave the pitch two days later, it went unbelievably well. A very successful VC came up to me after the presentation and said, “I’m in. I’ve got a check in my pocket. How much do you want?” Our $200,000 seed round turned into a $500,000 seed round (which was quite large for 2011). $500,000 turned into $1 million and then $2 million. Finally, we were ready to start building our company. In total, we ended up raising $17 million in venture capital funding over many years. In our first year, we did $850,000 in revenue.
In the second year, $15 million in revenue. The third year was $56 million, and it just kept growing like that until it was over $400 million.
