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Entrepreneurship

The Failure of Steve Jobs & Walt Disney

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There is an awful lot one can learn from the remarkable Steve Jobs, of course, but one thing stands out to me–one single thing that can get lost among the many lessons his story offers: Failure.

The people who change the world are not brighter than everyone else is; there are many bright people with great ideas. It isn’t that Steve had vision; when I worked in the Bay Area, I found I couldn’t take a dozen steps without running into someone with an exciting vision for the future. And it isn’t that Steve better focused on the needs of humans; that is certainly an integral part of his success, but every organization is full of people capable of putting customers first.

No, the one thing that sets Steve Jobs apart from others is not success but failure. Reading his biographies and tributes this week reminded me of another hero of mine, Walt Disney. Their tales are remarkably similar in many ways.

We Americans have a terrible habit of distilling the stories of our great men and women into simplified and boring soundbites of success–Walt Disney invented Mickey Mouse! Steve Jobs invented the iPad!–while ignoring the long, crooked, difficult, brave roads they took to realize that success. We like to believe that success is what defines the American spirit, but the truth is the opposite: Failure is what defines the people who achieve greatness.

Steve Jobs and Walt Disney are American success stories–and they both failed in spectacular fashion. Steve Jobs produced the Apple III, a computer with so many hardware issues that one of the solutions (I’m not kidding) was to drop the computer two inches to reseat the chips on the motherboard. Walt Disney’s first animation effort went bankrupt and he lost the rights to his first commercially successful character (the forgotten Oswald the Lucky Rabbit.)

For most, the story would have ended there. Steve Jobs, pushed out of the very company he founded, could have spent his life developing products that didn’t push the envelope but delivered his family a very comfortable standard of living. Walt Disney could have given up animation–something he’d briefly attempted in the past–and sought work in the booming Hollywood movie business. But neither did–they learned from failure and eagerly dove back into the deep end of the risk pool. Said Steve Jobs, “It turned out that getting fired from Apple was the best thing that could have ever happened to me… Sometimes life hits you in the head with a brick. Don’t lose faith.”

What is remarkable about both Steve Jobs and Walt Disney isn’t merely that they persevered after failure; instead, the defining characteristic of these great men–the one thing we can and should learn from Jobs and Disney–is that they never stopped embracing risk even after they achieved success. It is difficult enough to make risky decisions after one is prosperous and comfortable, but imagine making those same risky decisions after having suffered the kind of confidence-shaking flameouts that Jobs and Disney experienced.

Disney achieved great success and recognition with Mickey Mouse, Donald Duck and The Three Pigs, yet he risked it all to push his company into the dangerous and untested waters of full-length animated movies. He was forced to release “Snow White” sooner than he wanted when the banks funding what had come to be known as  “Disney’s Folly” refused to advance any more credit. Snow White earned Walt money and recognition, yet he risked it again and again on pet animation projects, live-action films and the riskiest bet of all–theme parks. Having tasted the bitter pill of failure, he nonetheless risked his reputation and wealth frequently.

Steve Jobs did the same. After being dumped from the company he founded, Jobs turned his attention to new risky endeavors. He launched a new software company called NeXT, Inc. and invested $50 million of his own money into Pixar. NeXT floundered, Pixar soared and Jobs was soon back at the helm at Apple. For most of us, the satisfaction and recognition of a triumphant return to the company that dumped us would be validation enough, yet Jobs took a salary of $1 a year and repeatedly placed risky bets on new business models and innovative technology. Jobs might have stopped at any point in his journey and retired with the kind of wealth and accolades most can only dream of, yet his risks and hits kept coming–iMac, Macbook Air, iPod, iTunes, iPhone and the iPad.

Most within corporate America work their entire careers avoiding risk. Some do it blatantly, taking pride in saying “no” to anything new that comes along, protecting the bottom line and corporate reputation from anything that feels a little dicey. Others avoid risk superstitiously, hiding behind focus groups, best practices and spreadsheets that promise (but rarely deliver) ROI.

In Human Resource departments, for example, the risk avoiders hire only candidates who present excellent education records; Steve Jobs dropped out of college and Walt Disney left high school after one year. In Marketing Departments, the risk avoiders spend big money on TV and print while moving cautiously into digital and social; Disney made huge bets before others on Technicolor in movies and on the nascent television medium, and Steve Jobs doubled down on mobile computing at a time when few expressed a desire for expensive mobile devices.

Avoiding risks doesn’t get someone fired. No one is ever called into a senior executive’s office to justify why he or she declined to invest the company’s money in a bold but untested idea. The risk avoiders rise slowly and steadily in corporate ranks, producing modest results. They never risk their reputations or career achievement, and when they fail, they fail small and justifiably–“The creative tested well!” or “The candidate had a great GPA from a respected school!”

Most of the time, these people guide companies to outcomes within a safe and expected range, perhaps stealing a point of market share from the competition. Little is risked, lost or gained. But the road to failure is paved with a thousand tiny successes, and while risk avoiders don’t fail spectacularly, their companies can. Risk avoiders cannot change quickly enough; they miss threats to their marketplace and are unable to rapidly steer a new course. Blockbuster, Borders, GM, and many other firms were full of risk avoiders who were constantly and modestly successful until they suddenly were not.

Of course, there are many in corporate America who embrace risk, but few do so like Jobs and Disney. If you are a risk taker, you probably do so only part way. You likely don’t bet your job, your home and your family’s future on your vision. Walt Disney would have lost Mickey Mouse and his home had Snow White failed, and he later borrowed against his own life insurance policy to fund the construction of Disneyland. You don’t take that kind of risk, and neither do I.

How much are you willing to risk failure? After being promoted and earning a healthy income, are you inclined to put that at risk to pursue your vision and deliver exceptional results for your employer? Can you defend and support an employee’s new idea when their last one failed thoroughly?

The lessons of Walt Disney and Steve Jobs aren’t simple or easy. Very few of us have the power to achieve anything close to their level of greatness, but the way we choose to view failure and our willingness to risk what we have achieved is, in my opinion, the defining difference between those who are merely successful and those who bring vital change to their organizations.

Most of us desire success and fear failure. What the stories of Jobs and Disney tell me is that we ought to embrace failure and fear success. The more we succeed and achieve, the less likely we become to accept risks. Jobs and Disney remind me of a Steinbeck quote–one I learned from Epcot’s American Adventure (Thanks, Walt!)  Steinbeck was speaking of our nation, but he may have well been speaking to every company and individual who has tasted success:

We now face the danger which in the past has been the most destructive to nations. Success, plenty, comfort and ever-increasing leisure: no dynamic people have ever survived these dangers.

Think Different, indeed!

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About the Author 

This article was written by Augie Ray of ExperienceTheBlog.com. Angie is the Director of Global Voice of Customer Strategy for a Fortune 100 financial service company. His background includes more than 20 years of experience in digital, brand, customer experience and social business. See more of his work.

Entrepreneurship

Why Angel Investors are Shaking Up the Global Startup Scene

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Candace Johnson is someone who has made a global impact on our modern international telecom and broadcast business. She co-initiated the foundation of SES-Astra and SES Global, which today owns a fleet of 54 satellites and broadcasts 6500 TV channels. And she founded the world’s first Internet-based online service, Europe Online, making it into one of the first broadband Internet services.

But it was in her role as president of EBAN, the European trade association of several hundred business angels, which brought her to Eindhoven’s High Tech Campus recently. She explains why angel investors are making a difference to the global start-up scene and explodes several myths that surrounds the way they do business. She spoke with StartupDelta’s Jonathan Marks.

Building the match between angel investors and hardware startups

“People often think that angel investors are people who do investments around the corner, locally, or in services like e-commerce. To be frank, when the HTCE management told me that they were focussing on the hardware side of things, I was thrilled.”

“What I’m trying to do as President of EBAN, and having incubated MBAN (MENA Business Angels Network) and ABAN (African Business Angels Network) under my presidency, is to extend the scope of angel investments. The vast majority of angels are already tech savvy. But we need to educate our successful angel investors to invest more in hardware and infrastructure. We also need to help start-ups develop a pitch that speaks to the interests of angels, so they can get funding for their initiative.”

“We run the EBAN Training Institute with the goal of raising standards. We’re seeing more and more that the best angel investors are serial entrepreneurs. They bring their trusted network, expertise and experience to the table.”

“Money is important too, but it is not at the top of the list. Business angel investors are high net worth individuals who usually provide smaller amounts of finance (€25,000 to €500,000) at an earlier stage than many venture capital funds are able to invest. They are increasingly investing alongside seed venture capital funds.”

Angels are more important than most people know

“We follow the guidelines and standards developed by the European Venture Capital Association. For over seven years, during the depths of the financial crisis in 2008 until the recent recovery started, it was the angel investors who took over the role of early stage financing. More than €7.5 billion are being invested annually in Europe, with a sustained growth in recent years. Of that €5.5 billion comes from angels. In fact we have had to professionalize our profession to meet the demand of the growth in this early stage ecosystem.”

We always have an exit strategy

“Angel investors can only continue to invest if they have exits. I hear many people talk about investing. Only a few discuss exits. I want to change that. I also stress that proven entrepreneurial success is essential in order to become a member of our association. We need to ensure that useful “lessons learned” are shared with the start-ups. They are always based on hands-on real-world experience. We have no time for people who are using new blood to try and correct mistakes they made in their own failed companies.”

“EBAN was started in 1999 together with the European commission. For the first ten years, I think people were too focussed on the investing part. Now we need to focus on exits and returns on investment. Without returns, business angels are out of business. And remember there is only a short window of opportunity during which start-ups can scale-up to becoming global success stories”.

“Our feeling is that you should not make an investment in a company unless you can see the path for the exit. The exit may be a trade sale, an IPO, etc. The exit also does not have to be 100 %. It does, however, have to bring you a return on your investment so that you can continue to invest. This approach helps you focus on building great companies. There’s always competition in healthy markets, so no-one can afford to waste time. We’re not a charity; we’re doing this because we love building and financing global success stories. We’re therefore looking for companies with a real marketable product, not a prototype or a collection of well-presented ideas.”

Is there specific advice you can share with high-tech startups?

“In the last few years we’ve seen the rise of the accelerators alongside incubators. They have helped raise standards because a good idea needs to be validated by the market before it is the basis for a high-growth company.”

“As investors, we always need to see a start-up demonstrate that they have first clients and initial revenues. We’re not saying that they have had to scale or show market traction. But if we are going to put in our personal money, then we expect the founder to be resourceful enough to work out the first product, to have found the first clients and show us evidence of the first revenues.”

“The incubators who help get an idea into reality and the accelerators have been good at making startups better prepared for angel investment, offering the right coaching to turn an idea into a validated business. That means angel investors are better able to select the growth companies and focus on making a good return on their investment.”

Hanneke Stegweg

“We recognise that young companies need to present their business proposition to the angels attending our annual conference. So we’ve created ways that teams get immediate, honest feedback on the quality of their business presentation. We have one full day of preparation and coaching followed by a Global Investment Forum. The best go on to pitch to the entire network. This year, the “company to watch” category was won by Hanneke Stegweg, who is the Dutch CEO of the iLost company. Together with Neelie Kroes, I am keen to see more women founders lead entrepreneurial teams.”

What needs to change for things to move faster?

“We held this year’s EBAN congress in Eindhoven at the recommendation of several members. They all work in the innovation and financing of innovation field. But this region also came up in our discussions with StartupDelta. We have worked closely with Neelie Kroes when she was with the European Commission.”

“We were tipped off to the High Tech Campus specifically by our Russian members: the Russian Business Angels and the Skolkovo Foundation who are building the Skolkovo science park just outside Moscow.”

“And last, but not least, I know Eindhoven from my work in telecommunications and broadcasting hardware field. We often came here to work with Philips on the establishment of the DVD and MPEG-4 standards.”

“During our visit to the Brainport area it was clear that there is more than enough money in the region and a healthy appetite to invest in innovation. But there are some caveats that we feel need to be addressed.”

“Frankly, I think we are rather tired of the “nice-to-have” e-commerce companies. We would prefer to reinvest in world-class companies who are building something tangible, solving a real-world challenge. They need to demonstrate they can scale and become global.”

“We can see that the efforts by many have helped to raise the bar in the Netherlands and that’s good news for everyone. But remember there is a difference between entrepreneurs and SME’s. Entrepreneurs are the only ones to change our world. They create large companies, worthwhile employment, and that grows into large revenues.”

Failure is not an option

“We should get rid of this talk of failure being an option. If you’re taking angel money, it is NOT OK to fail.”

“If you take third party money, you have a responsibility as an entrepreneur to do everything you can to make a return on the investment of your business angel. The media keeps talking about friends, family and fools. But that’s nonsense! Founders, families and friends build great companies!”

“I have always been a free marketer at heart. Europe and The Netherlands need to create nations of investors. I believe in the power of private sector-led investment. Government needs to follow the leads set by business angels, not the other way round. We are investing our own money and using our years of experience to scale up these companies. An entrepreneur who is not willing to work and dedicate her or his lives 24/7 to achieve the goal should look elsewhere for money!”

“We’re fortunate that the EBAN network acts as a magnet for excellence. We were honoured to have the President of the European Research Council and the Head of Technology Transfer of the European Space Agency address our Congress to show us where the technology trends are going and where we should invest.”

“From a venture and entrepreneurial financing perspective, we were most grateful to our colleagues from the United States who joined with our European, MENA, and African colleagues to set the bar high in creating, building and financing global success stories. Amongst those joining us in Eindhoven from the United States were the president of the Global Accelerator Network from the USA, the president emeritus of the Angel Capital Association of the USA, the President of Start-Up Angels and Board Member of Up Global from the USA. We also welcomed the President Emeritus of the Crowd funding association of the US as well as the chairman of New York Angels. And we were delighted with the presence of David S. Rose, the president of GUST.com. These are some of the world’s best experts in angel investing.”

“They all said they were pleasantly surprised by the high standard of the startups that came to Eindhoven from all over the world. It was well above what they had expected. Start-ups from Africa, Middle East and Europe traditionally explain what they do, rather than explaining to investors why their idea is important. But that’s changing rapidly for the better. Entrepreneurs are also getting better at defining what they need in order to scale-up.”

NEXT STEPS : It’s all about active networking

“I should explain that in expanding our reach in Europe, with have formed alliances with the European Space Agency and the European Research Council. They also have their own accelerators and incubators. I think the onus is on the angel investor community to help bring this scientific community to a higher level of entrepreneurship. They need to think about the market for their inventions from the beginning. I believe we can help these organisations filter out the very best ideas and give those the attention they need to scale ideas into real businesses. There needs to be a validated market need for the technology they are developing.”

“We have two main events. There is the annual EBAN congress, this year in Eindhoven and next year in Porto, Portugal. And we run the EBAN Winter University, this year running from November 17–19th in Copenhagen. We’re doing this with leading organisations active in Europe’s creative industries. And all this is in addition to individual events and competitions organised by EBAN members at a local, regional and national level.

Increasingly we’re assembling cross-border syndicates, both between European countries and increasingly inter-continental networks linking Europe with innovation hubs in Africa, Middle East and North America. As companies scale and go global, it is important they have access to an international shareholder network. It’s a softer landing when they cross continents.

We also believe there is a way in which we can build partnerships with techno-business parks around the globe, led by the flywheel initiatives shown by High Tech Campus Eindhoven over these very fruitful days in the Netherlands.

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About the Author

This article was written by Jonathan Marks, Executive Director at Photon Delta. See more.

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Entrepreneurship

Myths & Facts about Entrepreneurship

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Today, there is a pervasive and nearly deafening mantra insisting that you quit your job and become an entrepreneur. The collective says you should do it today because every day you wait brings you closer to a life of poverty and regret.

A central theme in the entrepreneurial world is challenging the status quo and questioning conventional wisdom in search of new and better ways of doing things. If you’re just going to follow the pack, you may as well just get a real job and call it a day.

Entrepreneurship can be incredibly rewarding. Starting your own business may be the best decision you ever make. But it’s not for everyone. There’s a lot to consider before you take the plunge and a lot of myths to expose, starting with these.

Let’s take a glance at some of the Myths of entrepreneurship:

1. You’ll be Happier

Entrepreneurship can be incredibly rewarding. Starting your own business may be the best decision you ever make. But it’s not for everyone. There’s a lot to consider before you take the plunge and a lot of myths to expose, starting with these.

2. You’ll have more freedom, control and work-life balance

If you’re on your own, chances are you’re going to find yourself wearing all sorts of hats and working 24×7 for a very long time. Work will become your life. There’s nothing wrong with that, but not everyone feels more freedom and control that way.

3.You’ll be more fulfilled

Do we know what just about everyone loves to do? Great work that accomplishes goals they can be proud of. One can do that working for a big company, a small company, or their own company. Fulfillment has nothing to do with business ownership. If one wants to manage, lead, or run a business, it’s better off learning the ropes in a good company before starting your own.

4.There are no jobs; technology and outsourcing killed them all

It is shockingly untrue. If technology destroyed jobs, then which one will you call the most lucrative and fastest-growing industry on the face of the earth.That’s right: technology. If you can’t find a job, chances are you lack in-demand skills or education, in which case, yes, you might want to consider starting a small business which does not require much of exclusive skill sets in particular.

5.Entrepreneurs Live a Glamorous Lifestyle

That’s again untrue. Most entrepreneurs do not live a glamorous lifestyle; if they do, their investors should cringe. Entrepreneurs are notoriously frugal, hard working and opportunity-obsessed with little time for outside activities. These qualities are not hallmarks of the glamorous life.

Now,Let’s look at some of the facts of entrepreneurship.

  1. Most successful entrepreneurs succeed by exceptional execution of ordinary ideas: See Jiffy Lube, Starbucks and Charles Schwab.
  2. Most successful entrepreneurs concentrate on minimizing risk rather than taking huge risk at the time of starting their companies.
  3. Successful entrepreneurs use their innovative passion in many ways, such as buying companies, creating new ventures within larger companies and re-strategising nonprofits.
  4. More than 80 percent of new ventures are boot-strapped from personal savings, credit cards, second mortgages and the like. The median start-up capital is about $10,000. Waste Management began with a single truck; Sam Walton started with $5,000. So, in short access capital is not required to startup.
  5. Being first to execute well and delight customers is not at all important for success. A lot of startups have entered quite late in a particular startup industry and have done well.

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About the Author

This article was written by Utkarsh Sharma.

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