What really happens from startup failure and success - the real story -Part 2

Continued From Part 1

Prologue

Resilience in the life of a person is a hard thing to quantify. It's not something that can be measured on any test, predicted in advance, demonstrate in a CV, nor capitalised on a balance sheet. There are no industry associations for resilient people, or awards nights for "Most Resilient Entrepreneur".

In fact, the only place that you can 'earn' resilience is through failure. Or more appropriately, you can only learn how to be resilient by recovering from failure.

Resilience in a structure is an easy thing to measure, test and design for. In a building, resilience comes from its ability to withstand very strong or extreme events such hurricanes. The capacity to flex or bend, rather than remain rigid or stiff, is an inherent engineering principle built into each structure's design. The strength of any building starts from its foundations. Build a structure on weak footings, and its time is limited. The strength of materials used in, and the depths of the foundations, also play a large part in the resilience of any structure.

In people, the capacity for resilience is built following failure, manifested in how you respond to and learn from failure's outcomes, and in recovering from its effects. There is an old saying (Japanese, I think) which epitomises it exactly. "Fall down seven times, get up eight".

Resilience is about drawing on your capacity to dig deep when things don't go 'by the book'. And in the business of venture risk, despite what you might hear, there really is no playbook for recovery, though you can find clues and hints in the stories of many successful people. It is called 'character'.

Like the steel of a sword, it's in the events that forge them, from which the character is defined which truly determines their resilience. So in order to truly understand some-one's character, you must have a sense of where they have come from.

So perhaps the best way to explain is to demonstrate what I mean, in the real world, from the only story that I really and truly know -my own.

"What really happens from startup failure and success - Part 2." Click to Tweet

2008 was my year. Stellar successes, and opportunities coming at me literally almost daily. At the beginning of 2008, I had left my corporate career behind years earlier, swearing never to return. I had 2 modestly successful ventures running, was developing 2 others, and was leveraging the profile that 3 successful not-for-profit ventures which I was involved in, were bringing me.

Plus, I was a new dad, with all the responsibilities that caring for a newborn baby brings. By the way, I relished fitting into the role of being a work-from-home dad, and saw it as the most important task I would ever be involved in. For me, fitting in the responsibilities of being the primary carer for a newborn, in and around being an entrepreneur, was like a duck taking to water - natural, effortless and joy-filled.

But I digress - in that year, the seeds were also sown for abysmal and abject failures. Without warning, the primary supplier of my cash generating business (selling motorcycle accessories online) went broke, leaving me with a terrible hole to fill. With no obvious replacement available, that business ceased to subsidise my other activities, which were many & varied. It also put a substantial strain on our own personal finances, the implications of which, I failed to fully acknowledge at the time.

In 2007, my involvement as head of a Not-For-Profit community organisation, had caused me to seek a solution in addressing a substantial local problem - the lack of fast, reliable and affordable internet access in new local communities. After exhausting all lobbying & commercial avenues, I discovered a technology solution which lead me to developing a viable business model. I was also running a web-design & consultancy and business supporting local small businesses, so the leap to a new field in a known market was not insurmountable in my mind.

So with a local business partner, I started a wireless broadband business, to provide internet access in metropolitan 'blackspots' just like mine (of which there were many). Broadband was a hot topic at the time, with the recently elected Federal Labour government pushing their NBN 'solution' with all the fervour of a religious zealot. I acknowledged the risk that this venture represented, so I was aware of my need to have another 'iron in the fire'.

This timing of seemed to dovetail nicely with my part-time involvement as marketing manager, in planning and building a new venture with a friend, in exchange for equity. They held the rights to make and commercialise a healthy ice-cream. "Really", you say? Well, about as healthy as a fat-free, sugar-free, gluten-free, allergen-free ice-cream could be. We had a prototype product that tasted great, had the right endorsements, financial backing, and willing suppliers and channel customers (many are names that you'd know).

Having two potential winning horses in the race, I let my other businesses wane. In hindsight, probably not very prudent, but in the later half of 2008, it looked as though I had a piece of 2 winning formulas, and a public profile (from my involvement in 3 not-for-profit ventures) strong enough to leverage either (or perhaps both) of them to success. In amongst this, I was living & loving the role that many mothers play in the daily raising of a young child.

Then, in late 2008, I lost my father. Whilst not a successful man in any traditional sense, he had been my role model for how to behave as a man, a father and person of integrity & intelligence, and he had always been my sounding board - my 'voice of reason'. Despite his own apparent lack of business success, my dad had 'the game' figured out long before I even knew what the rules were. I wonder now how much the loss of him in just that role alone, played out in my future decisions.

In early 2009, when the gelato project was only a month or so away from signing all of the necessary contracts to commence, the founder unexpectedly passed away. The son of the founder, my friend, understandably lost his focus. Committed seed capital (which was tied to the credibility & past track-record of the founder) dried up, suppliers filled their capacity with other contracts, and channel customers purchased alternative products to fill the market opportunities that we had identified, and so that business never launched.

Along with the sweat equity I had invested in the project, so also (and more importantly) disappeared the strength and capacity of a friend & fellow entrepreneur, who has to this day not recovered from the devastating blow of the loss of his own father.

By the way, I never saw entrepreneurship as just being about business; for me, it's really all about people, and the 'game of life'. In times past, when some-one had said to me "it's just business", that was really telling about how they viewed their role in business - it's definitely a red flag about their integrity, as far as I'm concerned.

Because whilst a business might be a separate legal entity, it is infused with all the elements (good and bad) that make up you as a founder. It is you that sets (or ignores) the culture of the venture you create. Every aspect of your character permeates into your business ventures, from your personality, beliefs, and values, to even your attitudes and mood. It is you that imagines, creates and gives life to it. It is you that moulds, shapes and directs its growth, and it is you that sets forth what you will (or won't do) in order to achieve success.

And when it disappears, or it's taken from you, it takes a little of 'you' with it.

By 2009, in a bid to rollout the NBN-the largest single infrastructure project in Australia's history- the then-federal government had done a deal with the incumbent telco to take over its fixed-copper lines for broadband delivery. And in the fine print of that negotiation, was a tiny little clause that most people would've missed, but which effectively sealed the fate of our own broadband project (and likely others). It simply stated, that for any organisation that wanted to deliver broadband outside of the methods of this 'great new hope', would have to pay the government a licence fee of between $5 & $20 per month per customer, which was our entire budgeted profit margin,

It was as anti-competitive an action taken by government as I'd ever see in Australia. But do you know the 'golden rule' between big-business & big-government? “He who has the gold, makes the rules". This was a multi-billion dollar deal that had everything to do with political ideologies and corporate maneuverings, and nothing at all to do with solving the problems of consumers or innovation, as current events are now starting to bear out. I'm not sure if 'corruption' is too strong a word here, but 'collusion' certainly isn't. So this broadband project, which would've quickly brought fast cheap & reliable broadband to those areas in most need (at no cost to government) stalled, or rather, was effectively killed.

(There's an interesting side note about this in the last paragraph)

As the old saying goes, “if you can't beat them, join them". In 2004 and 2008, I had helped 3 local people to run for local council office, one of whom was my then-wife. Two had got elected, and my wife had missed out by 101 votes. So my strong local community profile, along with my experience in crafting and delivering public messages, lead to a conversation with a 2nd tier national political party about my running a campaign for them in our region in 2010. I became the lead candidate, and in late 2010 at the state election, polled very highly, coming within a couple of thousand votes of gaining office, in what would turn out to be a key role in holding the balance of power in the state.

But it was not to be - and in my wife's eyes, yet another failure. This was probably the final blow for her in our relationship. Which begs an important lesson in partnering with some-one who understands the difference between failing from lack of effort, and failing by trying. Your choice of life partners will be almost certainly play a key role in how success ultimately finds you.

And I suggest you re-read that sentence again; it is exactly that way.

"For those that stay in the game and keep swinging- success will find you."           Daniel Mumby - Click to tweet

Now here's where it gets very personal. In April 2011, my 17 year old son from my first marriage was diagnosed with Leukaemia. With my marriage now effectively over, I am reduced to a full time carer of a wonderful child, and nightly hospital visits with my son, but little else. Love, support and opportunity, the 3 things that are the mainstays of any business venture, are gone. And with it, hope.

And then it got worse, much worse.

By mid-2013, I'm embroiled in a family law court case which I could neither afford, nor (at the time) had the mental bandwidth to fight. My former spouse and the family law system took advantage of some-one in a position that system was supposedly designed to protect, namely the primary carer.

Within a very short time, I'm now broke, homeless, without any income or assets left to sell, no businesses, completely un-employable (prospective employers saw me as a risk), alienated from my family & friends. I was surviving on a meagre subsistence subsidy, and some couch-surfing. And I had been left with debts totalling $200,000, for which I had no capacity to pay, with no hope, and no way out.

It's at this point that people are often driven to commit dangerous or desperate acts. Their choices are limited, as is their thinking, and options. They often quit & give up on life, go bankrupt, become a hermit, commit suicide or become a fugitive or worse. And in doing so, leave tears in the fabric the lives of family, friends, colleagues and former co-workers alike.

But I couldn't even quit on life. I had made my son a promise, and it had everything to do with who I was. I had committed to him, to do my best to raise enough money, by my efforts and intellect, and again create an endeavour  that would succeed. This venture would make enough money give him a shot that some in-the-future medical treatment might allow him to live a normal & long life, or perhaps even simply to walk again. I had given my word, and where I come from, that counts for something.

So it's often only at that point, when you have nothing left to give, and nothing left for anyone to take, that your back is against the wall and you are left staring out 'into the abyss'. That's where real character kicks in, and the resilience that you've previously learned, can really shine forth. Only at that point, are you finally left with no choice but to make a 'leap of faith'.

And to make it, you will need help. Mine came in the form of one man - an entrepreneur, founder, friend, mentor & wise elder, Neville Christie.

It is only when you get far away from the lights and glow of the city, out into the country night sky, that you can see the night stars in all their glory. And it was only when my life had been stripped bare and exposed, could I see with complete clarity, who it was that I was put here to be.

I had been blessed with paying for, by experience, the one thing that virtually guaranteed my future success.

I had acquired a clarity of purpose, an absolute motivation and all the tools required from which to attain my goals. And I finally recognised that I'd been given a gift so valuable, so precious and so rare, that to do anything but take it to its ultimate and logical conclusion would be the real tragedy.

When I finally realised those truths, things suddenly started to get really interesting…………

So sometimes you will discover on your path that you can make all the right choices and still not succeed. But that has nothing to do with the reasons why you try, and why you should try again. Failure or Rejection isn't a bad thing. It's like a signpost that tells you that you are headed in the wrong direction, and nothing whatsoever to do with the value or purpose of your journey. And in that lies the rub. Rejection is not failure - only feedback which leads to learning.

"To your success" - Daniel"

 End-note: By the way, a little-known broadband supplier had developed a successful business in South Australia (at the same time as we were), using the same technology and a similar marketing methodology to a similar market. In late 2012, it was purchased by the incumbent telco, in a highly generous deal which totalled $60 million. My best guess is that this equated to about 22 times earnings (or 22x), so there was clearly a lot of 'blue-sky' or upside built into the price. This deal was later quashed by the ACCC as being 'uncompetitive', and the small telco was subsequently sold to another large telco for a similarly large sum of money.

Just because your ideas are good, doesn't mean that you can achieve them. Though likely that someone will. So your opportunity is to keep going, in the face of adversity and challenges, until you do. Because it's part of who you really are.

StartUp books due soon for release

• "Before You Quit Your Day Job" (pre-order special available)
• "After You Quit Your Day Job"
• "Confessions of a Serial Entrepreneur"

 If you like this article, you might also enjoy these other posts by Daniel

• 42 Laws of Venture Success (3 part series)
• Why I can't invest in you if you won't invest in yourself
• Why women make stronger (and better) entrepreneurs (1.8k)
• Where is the right place to raise money for my startup (66k)
• Are you really an Entrepreneur, or just a small business person (6.7k)
• How To Go Viral on Linked In, without being an Influencer       (2.2k)
• How to raise $5million for your startup idea (and why you shouldn't) (33k)
• Why Pitching to a VC will almost always fail (10k)

About Daniel

Also traveling under the alias of 'That Startup Guy' , I am a co-founder of StartUp Foundation (The Startup Accelerator for Experienced Professionals) and am intensely, deeply, passionately dedicated to "The intersection between personal mastery & business entrepreneurship".

My goal is to help you, by guiding you through the steps, and past the challenges and pitfalls, to turn that 'Great Idea' into reality.

If you've got an experience about startup success (or failure), comment about it. If you've got a question, reach out to me via your preferred social media, or download my media/speakers kit. Other posts can be found here on Linkedin.