Key to success in Silicon Valley: Failure
This is the second of three excerpts of ‘Innovate or Die’ by Andres Oppenmeimer. The third excerpt will be published Thursday.
One of the things that caught my attention during my visits to Silicon Valley was how candidly people talked about their failures. Many of the world’s most innovative entrepreneurs I met there happily volunteered to talk about both their failures and successes, with the same smile on their faces. In some cases, they spoke about their failures almost with pride.
On one of my first nights in San Francisco, during a reception at the Autodesk design company, I asked a young entrepreneur what he did. He said he created software and immediately added — without my asking — that he had started five companies, four of which wound up in bankruptcy. When he saw the surprise on my face, he quickly assured me that, luckily, one of his companies was doing very well. The admission of failure, I confirmed during that and other conversations that night, was a typical tale of Silicon Valley entrepreneurs.
“People here brag about their failures,” I was told with a shrug of the shoulders by Vivek Wadhwa, the professor who had received me at Singularity University and alerted me to the importance of the human factor in innovation. “In Silicon Valley, when you list your failures, it’s as if you are listing your university diplomas. Everyone here understands that with each failure you learn something, and you are therefore wiser than before.”
“There is a culture here that is very different from the majority of other countries, and from much of other parts of the United States. In New York City, bankers wear suits and ties and boast about their real or imagined successes. Here in Silicon Valley, the richest businessmen and the most prestigious scientists walk around in jeans or shorts and flip-flops and talk very candidly about their failures. It’s another world,” Wadhwa said.
Wadhwa was right. A few days before, I had personally confirmed that when I interviewed New York real estate mogul Donald Trump in Miami for my CNN en Español show. His constant promotion of his successes — and his denials of his failures — contrasted sharply with the candor I found among the most successful entrepreneurs in Silicon Valley. The innovative businessmen in California and the big businessmen from New York really did seem to come from different worlds.
Trump had come to Miami to promote his plans to purchase a ramshackle hotel and golf course for $200 million, renovate them and turn them into an exclusive destination. During the interview, about the collapse of the real estate bubble that the United States was just emerging from, I asked Trump what he had learned from his failures.
Before the interview, I had read several articles about Trump’s history, which was full of failures. A number of his companies had declared bankruptcy. Trump Airlines had failed dismally, and a brand of vodka did not survive long after its launch. But to my surprise, he became angry when I asked him what he had learned from his failures. Shaking his head and the blond mane that he always insisted was not a toupee, he told me, “I never failed at all.”
“But you declared bankruptcy three times,” I said, as cordially as I could. His answer: “Those were not failures. What I did was to take advantage of the legal system.”
Obviously, I was disappointed by his lack of candor and intellectual sophistication. But it wasn’t until the following week, speaking with Wadhwa in Palo Alto, that I could fully appreciate the big difference between innovation tycoons in California, Seattle and other parts of the West Coast of the United States — like Gates, Jobs and Zuckerberg — and the real estate and financial moguls of New York.
The former dressed in jeans, T-shirts and sandals, tried to save the world with their innovations and charity foundations and spoke proudly about their failures. Many New York tycoons like Trump, by comparison, wore starched white shirts with stiff ties, paid little attention to social causes and denied their business failures as if they were shameful defeats. And while many of the former played down their fortunes, the latter tended to magnify them. Trump once filed a $5 billion lawsuit against The New York Times — eventually thrown out by a judge — for a 2006 report that his fortune totaled only $150 million to $200 million, instead of the billions he claimed. In New York’s business culture, in contrast to California’s, the key was appearances.
The collective tolerance for individual failure that so impressed me in Silicon Valley, as I learned later, has been one of the constants of innovation throughout history. Almost all of the greatest inventions were preceded by great failures. Thomas Alva Edison, the entrepreneur who invented the commercial light bulb and patented more than 1,090 products, failed in more than 1,000 attempts to develop a light bulb for mass use before he succeeded, according to his biographers. Aviation pioneers Orville and Wilbur Wright made 163 failed attempts before their first successful manned flight in December 1903. Almost all success stories are the culmination of stories of successive failures. It has always been like that, and it still is.
‘Innovate or Die’ is available at iTunes, Amazon and Kindle.
This story was originally published February 9, 2016 at 3:13 PM with the headline "Key to success in Silicon Valley: Failure."