Failure Is Definitely An Option

Over the years, either in reading about successful entrepreneurs, athletes, politicians, executives or talking with people, the term “failure is not an option” often comes up. I believe in the power of positive thinking more than the next guy but I think the term is the biggest pile of nonsense I ever heard. Most new businesses fail as do most new products. Only .4% of businesses last 40 or more years.  Some 70% of TV shows get cancelled in their first season and most motion pictures lose money.  If you are a baseball player who hits .300, you fail seven out of ten official at bats. Yet, if you can hit .300 for 10 straight years, you are a virtual lock for the Hall of Fame.

So, failure always has to be considered when starting any project, enterprise or investment. My hero, Teddy Roosevelt, as a newly elected governor of New York was speaking in Chicago on April 10, 1899. TR said in that speech, “It is hard to fail; but it is worse never to have tried to succeed.” Roosevelt was an advocate of what he called the “Strenuous Life”, which was an active existence that filled every moment with either intense physical or mental stimulation. He must have been exhausting to be around at times. The point to me of his comment was that striving or trying is the key. No one succeeds all the time.

Some years back, someone urged me to become involved in a partnership as an angel investor. He said, describing the fellow who was to be the managing partner,  “Don, this guy is a genius. EVERYTHING he touches turns to gold. He never loses.” I laughed and politely declined to get involved. At one time or another, everyone loses. Yes, Rocky Marciano retired undefeated as heavyweight champion with a 49-0 record. Herb Elliott, the great Australian 1500 meter man and Olympic gold medalist, never lost a race. Yet, in the business world, even the best lose from time to time. My mail and e-mail boxes are daily stuffed with solicitations for investment advisory services. The puff pieces claim that their pundit always delivers out-sized gains to subscribers and has been doing so for a few decades. The first question that I always ask myself is how come Mr. X is not listed in the FORBES 400 of wealthiest people.

Warren Buffett is a leader on the  FORBES list and is often touted as the 4th wealthiest man in the world. Buffett makes mistakes. He has had down years and has made some poor investments. His track record is outstanding but he does not always win. Read his letter to shareholders in the Berkshire Hathaway annual report. He is candid about his mistakes each year, some real and some opportunity losses. Buffett is arguably the greatest investor in history yet he has made mistakes—many of them. On balance, of course, his record is outstanding. I remember someone telling me about Bernie Madoff a number of years ago. They told me that he never lost and, like clockwork, delivered 12% gains for clients year after year, and they were able to double their stakes every six years. I said that I did not believe it as no one could be that consistent—even the greatest a la Buffett had losing years when equity markets got hammered. When Madoff’s Ponzi scheme was uncovered all I could think of was the old saw about “if it seems too good to be true, it probably is not.”

So, be cautious when someone allegedly never fails. Some do not because they lead lives of breathtaking boredom. I knew a media buyer who only would buy time in established programming. This individual sometimes paid too much but never had a weak post buy analysis. At the same time, the buyer never had the equivalent of a 500 foot home run. If you do not drive, you can never get in a car accident. Others gloat when markets tank but then admit they keep virtually all of their money in CD’s. Being cautious is a virtue but being 100% risk averse is crazy to me. We are about 5% of the global population yet millions of Americans refuse to invest outside the U.S. which is where the significant growth is and will likely continue to be. In advertising, I saw people want to bet the ranch on cable TV networks in the 80’s (too soon) while others waited until the train had left the station early in this century before they got involved. The same has been true of making a commitments to online and social media.

Look at the great companies today. They have had failures but they regroup, dust themselves off and keep going. Remember the Amazon phone? How about Google + and how Facebook was toast? Or, Google Finance killing Yahoo Finance? No one is perfect but those who succeed keep stepping up to the plate, learning from their mistakes, and know that there will be future errors, some great and some small. The key is to take risk and move outside your comfort zone and as TR would recommend, keep striving.

Allow me a brief holiday aside. While researching this piece, I came across a Teddy Roosevelt quote that made me laugh out loud. In the 1970’s, I used to enjoy DJ Casey Kasem’s America’s Top 40, a radio program that did a countdown of the most popular songs in America. At his sign off  at the end of each show, Kasem would always conclude with, “Keep your feet on the ground but keep reaching for the stars.” He had a wonderful radio voice and I found it a bit inspiring plus I was impressed that he came up with such a great line.

Well, yesterday, I was looking over some Teddy Roosevelt speeches and saw that then President Roosevelt was addressing some students at the Groton School in Massachusetts on May 24, 1904. His conclusion to the young men was “ Keep your eyes on the stars, but remember to keep your feet on the ground.” :)

Merry Christmas to MR readers around the world!

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.