A new system to help make sure that one can learn from past failures in the most opportune time
While watching the highlights reel of a cricket match the other day, I heard the commentators talking about a dropped catch as the turning point of the game. That struck me as rather simplistic. An entire eight-hour game condensed into one moment—a dropped catch. Analysing start-up failures to give other entrepreneurs a sense for what they can learn is fairly similar. Most experienced entrepreneurs will tell you that systematic mistakes make up a failed start-up. It is never one thing alone. The next question is how to condense learning’s into an actionable set of items that you can use next time.
At my previous failed e-commerce start-up, hiring too early based on expected demand, trusting investors who committed verbally to funding the company instead of getting it on paper, not having a clear idea of working capital costs until it was too late and not doing thorough due diligence on the financials of the company contributed together to our failure. The only thing I remember was the inability to raise money from investors who did not like the capitalization table and the business model, which was bleeding cash every month. So the pithy statement I offered to most who wanted to learn from my failure was “raise enough capital so you can make a few mistakes and still not shutdown".
The other way to express this is to talk about root causes versus symptoms. The symptom was we were unable to raise money so the proposed advice I was giving others who wanted to learn from my experience was to raise more cash. The other things I learned were more important, but given that most start-up failures can be put into buckets of market issues, customer problems, financial constraints, personnel challenges and technology constraints, we tend to repeat the same mistakes because most entrepreneurs, being optimists and opportunists, try to fix the symptoms than the root causes.
The problem with documenting my mistakes is that even if I write them down, I rarely remember them when I need to. Most of what I end up doing is to committing to memory. Since failures tend to be uncomfortable events and experiences, we tend to not want to remember them when we need to utilize the learning most. Compounded with the fact that multiple systematic mistakes make up a failure, the ability to pick up patterns which can trigger a previously learned experience makes the learning almost impossible to be useful, relevant and effective.
So I devised a new system to help me make sure I can learn from my past failures in the most opportune time. I call it the learning question bank. The question bank is a curated list of failure learnings condensed into one to three questions in each category that I ask myself when I am faced with a new problem which has possible associations with something I have failed at doing before. I review the questions in the bank after I meet entrepreneurs to evaluate their opportunity and see if they can learn something from my failure. I usually send them an email, post our interaction to give them my experiences via the story of my failure which brings the learning back to the forefront.
Mukund Mohan is resident CEO Microsoft Accelerator.
