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by • December 30, 2011 • Best of, FoundersComments (30)1940

How to make failure sustainable (and career entrepreneurship possible)

I’ve done nothing for the past 5 years but drive companies out of business.

Through doing so, I’ve learned how to make failure sustainable.

Career entrepreneurship isn’t viable if you’re forced to return to a full-time job after every slip-up.

Upside versus downside

A few years ago, I would have claimed that the definition of an entrepreneur is someone who maximises upside and ignores downside.

But focusing completely on upside just means your startup career is destined to be either brief (first-time failure you can’t recover from) or lucky (first-time success)[1].

Instead, I want as much upside as is feasible while still paying for my life.

That means I would rather work 20 hours of contracts and 20 hours on my startup than 40 hours on my startup, assuming the former is sustainable and the latter is not[3].

I would rather make $X000 a month with a chance for a million, than $0 a month with a chance for a billion.

The two most important skills

First is learning to make enough money to sustain your target lifestyle[4], as efficiently as is possible.

Second is learning to create upside.

Sometimes upside is given to you, like when you join a startup as an early employee or take certain jobs with uncapped bonuses or commissions. But in most cases, you have to create upside yourself.

They grow from planting flags, shipping, and getting out there, supermodel-style. I’ll write more about both in the future (so subscribe, hint hint).

What career entrepreneurship looks like

To my mind, career entrepreneurship looks like someone living well below their means and re-investing that financial freedom in planting the seeds for future opportunities through developing relationships, projects, and themselves.

When one of those seeds takes root (in that it has upside and can sustain the entrepreneur), their whole focus will shift to that project. It’s now the best of both worlds. Projects which become profitable or raise funding are an example of this evolution.

If the project fails, the entrepreneur shifts some time back to making enough money that their innovation may continue, uninterrupted.

And should their upside hit, they keep enough aside to treat like future income, using it to sustain their next batch of creations & experiments.

The only lives I’ve ever envied have looked like this.

PS. this post is on hacker news. If you found it worth the time, I’d appreciate any help spreading the love.

[1] Guys who risked everything and succeeded are the most dangerous role models. “Sink or swim” seems like a great idea from the perspective of those who made it back to shore.

[2] When I say “upside,” I mean that you get a chunk of the action if the project goes really well. Owning equity in a startup is upside. The cast of Star Wars got paid a small percentage of total earnings from the franchise. That’s upside. Getting paid a fixed hourly or yearly amount has zero upside.

[3] On this particular point, I don’t care one speck about the disagreement of anyone who is already rich and/or successful.

[4] It’s pretty easy to make a little money on the side, but it’s hard to make a lot. That means an important corollary skill is knowing how to keep your lifestyle costs low.

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30 Responses to How to make failure sustainable (and career entrepreneurship possible)

  1. This is a great post – very affirming.

    To extend on the “I would rather make $X000 a month with a chance for a million, than $0 a month with a chance for a billion.”… I would rather earn $x000 a month doing working on a seed which I planted and grew myself.

    • robfitz says:

      Thanks, Gavin. Working on your own successful project is definitely the ideal way to maximize both sustainability and upside. You just can’t rush it — too many people kill their fledgling startups by requiring that the startup either support them immediately or cease to exist.

  2. Salvador says:

    Great post. I like how you portrait the entrepreneur lifestyle. Most people think they have one shot, and start doing the 9 to 5 thing as soon as something didn’t work as expected. Also like the “upside” idea. In general everybody seeks a direct reward for their effort and distrust the “upside” cause it seems unlikely. Keep the good work!

    • robfitz says:

      Hey Salvador, glad it was relevant & thanks for the kind words.

      One thing to note about upside is that there are definitely better and worse versions of it :). Sometimes joining a startup as an employee gets you both a crappy wage and very little upside. In that case, it might be better to, for example, freelance on the side and work on your own projects or negotiate a 4-day-week for reduced salary at a regular company.

  3. Jim Carter III says:

    Reaffirmation of like minded souls indeed. I started my first venture in 2006 and it’s been like a candy store since. Everything looks tasty enough to try, but you can’t forget what it takes to pay for the treats. My best advice (after now finding a few starting to succeed) is that paying your dues is crucial. Not only does it build credibility, it gives you the confidence to take risks you never would in the past.

    • robfitz says:

      Hey Jim, thanks. Although it’s sort of just a rephrasing of confidence & credibility, another aspect that’s made life easier for me in recent years is just having a sense of what the terrain & journey look like… Helps considerably w/ thinking long term.

  4. Marco says:

    It’s so true. Sadly here in Germany society exspects the total different. People say things like “Now you have to do something real…” to you.

    Staying independent from your venture is one of the most important strategic decisions. It frees your business model development until you found the right one.

    • Matt says:

      Which is why it’s important to disregard what society thinks on matters of personal lifestyle choices. You only get one life.

    • robfitz says:

      In London I had to make a real effort when I got here to surround myself w/ likeminded people who wouldn’t give that negative drag. The good news it that you don’t need a whole city full of them… a handful of people who really get it and can both encourage & sanity check you every couple weeks makes a world of difference.

  5. Joe Hill says:

    Anyone ever seen Rounders? I like to think of the Entrepreneur Lifestyle as that story arc. You try, go big, you fail. You go lick your wounds doing something for a bit. Some people give up, but others see opportunity arise and then they take it and boom, they are back in the entrepreneur lifestyle. Kinda cheesy, I know, but its very true. You don’t give up being who you are, even when you fail. You just find a way to make it work. Again cheesy but true.

    • robfitz says:

      Although I would prefer finding a way to hedge the risks so you don’t risk losing quite so much as Damon had on the table in the movie. The last game was, quite literally, life and death. Not exactly a bearable burden for the long term.

  6. [...] the post, How to make failure sustainable (and career entrepreneurship possible), Rob explains the importance of sustainable failure if you wish to be a career entrepreneur. Though [...]

  7. Sean Murphy says:

    Dave Snowden has a model for exploring complex landscapes he refers to as “safe to fail” probes. See http://www.cognitive-edge.com/blogs/dave/2007/11/safefail_probes.php and http://www.cognitive-edge.com/method.php?mid=47 I think your model for bootstrapping a technology startup is very similar to his approach to exploring and solving complex problems.

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  10. Anon says:

    Not to sound like a troll, but you just described the life of a politician.

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  12. [...] nobody learns from this grisly tale because we only hear from the people who made it to the other [...]

  13. gargi says:

    hi rob
    I think sometimes we are not ready for success, some of us have been trapped in mindless/wrong jobs that do us disservice, and so what we are doing is…we think trying to make it big at the start, hit the jackpot of gold, retire and never wrk again….but I guess inside, the true state is… we are gagging to explore our skillset….see what we dig, not dig….I think after 5 years and maybe a few trys at stuff….u probably gain a rich rewarding introspective getting to know yourself again, and then probably we r in a better position, more clued up, more fulfilled at playing around with our ideas, letting our mind have fun and breathe and then launch something…but with much more intention for it to succeed

  14. Tendayi Viki says:

    This is great advice for an academic. There is sufficient free time in our work to spend a bit of time testing some startup ideas!

  15. [...] How to make failure sustainable (and career entrepreneurship possible) – The Startup Toolkit Blog This entry was posted in Uncategorized by zzz_zwp. Bookmark the permalink. [...]

  16. [...] I’ve said previously, career entrepreneurship looks like someone living well below their means and re-investing that [...]

  17. Paul Boyce says:

    Rob, this is a really valuable post. The journey of entrepreurship is not a one time trip to the moon, but more a series of long hard hill climbs, sometimes slipping backward or twisting an ankle, but always with a wonderful view of warm distant pleasant lands. My first real startup I expected to be the former (moonshot) but it has been the latter(steep hills and twisted ankles). but it has taught me more about myself and about the process of startup than I could have imagined, and has given me a perspective on startup that I now take to everything I do. (And the view is still wonderful!) Thank you for taking the time to write this post.

  18. [...] How to Make Failure Sustainable (and Career Entrepreneurship Possible) [...]

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