It was that recent birthday boy and wise old septuagenarian Bob Dylan who once wrote, “There’s no success like failure, and failure’s no success at all.”
Which is exactly the conundrum that faces a hot new startup like LinkedIn that has just celebrated its fantastically successful IPO. Awash with capital, basking in the afterglow of the market’s validation, the blush of victory still warm on the cheeks of its founders, early hires and, most of all, venture capitalists, the star startup has every reason in the world to feel good about itself. But beware! Remember the old adage, “He whom the gods would destroy, they first make rich.” (With apologies to Euripides.)
First, let’s celebrate all those startups that aren’t front-page news, the ones that have just left big craters in some obscure corners of the entrepreneurial terrain. (In fact, the truth is that failure can be a very good career move when it comes to entrepreneurship. In the good old days, the best venture capital firms wanted to know whether anyone on a startup team had actually experienced a failure—because it not only suggested a certain seasoning, but also indicated a degree of ambition, a team member who had aimed high even if the shot missed.)
The benefits of failure are many; for one, it is absolute. And in many ways it is more comfortable and easier than success. At the end of a failure you get answers. You may even be able to produce a definitive death certificate that gives you the actual cause of death and tells you, with some degree of confidence, what went wrong and why. There is finality to failure. Game over.
Success, on the other hand, is hard. It is open ended and often, truth be told, inexplicable. It demands questions rather than offering answers. Even after a successful IPO—in fact, especially after a successful IPO—leaders will find themselves huddled around a table asking each other hard questions (if they’re smart):
What did we actually do right? And did we do it on purpose?
Did we actually nail it? Or was it some combination of luck, the smiles of the market, timing, opportunity, hard work, instinct or other forces we only vaguely understand that produced this windfall?
Is it us? Or is it the zeitgeist? And if it’s both, how do we keep riding that wave?
Having caught lightning in a bottle, do we find another bottle and try to do it again? Or just hang onto this bottle for dear life?
Success brings with it the challenge of the false summit, something every entrepreneur (and hiker) understands. Is this moment, this high, actually the peak? Or just a peak? Either way, where do we go from here?
Success doesn’t actually allow you to stop, rest and enjoy the view. At least not for long.
For one thing, the landscape will keep changing, whether you do or not. Conditions will change, the environment will change—economic and otherwise. The market will change. Customers will change. Demands will change, both external and internal.
Within your fledgling enterprise you’ll find a whole new set of challenges. Adding people turns out to be harder than it sounds—actually harder than subtracting people. There is the issue of who gets it and who doesn’t; who comes onboard because they think they’re joining the gravy train; who joined early and fit the startup culture, but now becomes an impediment to growing and changing the culture to fit the new reality of a successful company that’s no longer a startup.
How do you grow enough to become a strong, stable, serious company?
How do you stay scrappy enough to keep the innovative, entrepreneurial spirit that the market just endorsed?
And then, faced with money and praise and success and fame, the smart leader sits down and asks the hardest question: What’s the point of the exercise? What’s my own definition of victory? Is it the money? And if it is, how much money is enough? And if it isn’t the money, what do I actually think about the money? How do I make sure I use it—and I don’t get used by it?
These are questions that all that IPO money can’t answer. In fact, the IPO money may exacerbate some of them, providing a false sense of security and inviting a spirit of smug complacency. (Or it may allow more experimentation and creative risk-taking. Hard to say. Hard to say.) But the answers to the questions will not be found at the bottom of the Champagne bottles that were opened after that first thrilling day of a chart-busting IPO.
The answers, my friend, are blowing in the wind.
Which means they’re out there with your customers, who are waiting for you to go back out and reconnect with them. They can help give you the answers that success demands: They can tell you what you got right and what you got not-quite-right.
Sit down with your own team, the people who brought the startup this far, and ask what they—and you—fervently believe in. Ask which core principles and values of the company are non-negotiable. Make a list: What things cannot be changed going forward without representing a break in faith, a violation of your own code? What is open to change as you grow and mature? Then look at the two lists. They’ll help tell you more about who you are, what your customers love and value, and what the future has in store.
Look at practices and behaviors that underlie your success. This might be the right time to codify a few things about your culture—about communication, trust, how information is shared, how decisions get made. As success produces growth, you want to be sure that it doesn’t also produce calcification. Knowing what kinds of techniques and tactics brought life and energy to your startup team can help you design practices that will keep the best parts of your culture alive, while still allowing your organization to grow.
Most of all, don’t believe your clippings. Don’t let anyone convince you that you’re as good as your biggest number on the day of your IPO or as bad as the inevitable bump in the road that lies ahead.
Remembering why you did this in the first place can help you keep your bearings as the game keeps getting faster, crazier, more demanding and more confusing. And when you feel like your own success is about to overtake you, go back to your first principles. That’s often where the answers can be found to the questions success raises.
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Alan M. Webber | May 13, 2011 11:45 AM