In this ever-changing world, one of the most relevant skills to build a venture is the ability to learn fast. Actually, I would argue that this capacity is becoming more and more relevant to incumbent’s managers as disruption is now more “affordable” than ever. In the startup world, learning by experience is very bitter, it is costly. Therefore, it is critical for founders to learn as much as possible from others’ experiences (failures or successes). But the topic is not new. Some time ago (…), Confucius stated that there are 3 ways of learning (or becoming wiser): by reflection (the noblest), by imitation (the easiest), and by experience (the bitterest). Pick your way.
When sharing failures, the goal should be to use a post-mortem analysis to improve others’ premortems. A premortem is a managerial strategy to imagine a failed venture and then work backward to determine what potentially could lead to the failure. Although knowledge earned by experience will never be replaceable by reflection, the more an entrepreneur imagines what could go wrong at the beginning, the more chances of success.
That is why is so important to share failures and to write post-mortems, because by sharing we increase others’ odds of winning and creating value. Moreover, it is important for all of us as citizens. The more successful entrepreneurs are, the more jobs are created, and the more value is created for our society, especially in this century when jobs are threatened by automation. That is why smart city governments are already competing for attracting the best entrepreneurial talent.
But improving every start-up’s odds is also a concern for investors. The industry of Venture Capital has its origins in the US back in the 1940s. Georges Doriot, a former dean of HBS and founder of INSEAD, created the world’s first publicly owned venture capital firm in 1946: ARDC. Since that moment to date, the ecosystem of the US has led the industry. But with the current digital revolution, global leading venture-backed companies are now starting anywhere, and new ecosystems are rapidly catching up with that in the US. One could argue that the US is leading because of the vast amount of resources to fuel start-ups. Since my visit to Israel, I would claim that the US and Israel, both very successful ecosystems, are also doing a great job at sharing lessons learned as failing is regarded as one valid path to success. One of my favorite examples of this investor’s spirit is the anti-portfolio of Bessemer Venture Partners, a very successful VC in the US.
The habit of sharing “lessons learned” is an inexpensive way of improving the ecosystem’s talent. However, a growth mindset is needed to achieve this sharing practice. Think of it as “open-source code” (i.e., Autopsy). All this reasoning is not just valid for the entrepreneurial world but to our civilization. We (humans) have the ability to make the same mistake twice (i.e., WWI and WWII). On the positive side, I would say that we (humans) also have the ability to learn from others and avoid making theirs’ mistakes.
A few months ago, at INSEAD, I had the chance to listen to the first talk done by Jason Goldberg after shutting down his startup, Fab. In 2012, it was one of the fastest growing companies in the world; he raised more than $300 million in venture capital. His talk was super useful for me. Here is his latest post about it in case you are curious. So let’s share lessons learned, mines are coming soon.