Peter Thiel on Failure

2 points by InfinityX0 9 years ago | 2 comments

In responding to the question "How important is failure in business?".

"I think failure is massively overrated. Most businesses fail for more than one reason. So when a business fails, you often don't learn anything at all because the failure was overdetermined. You will think it failed for reason 1, but it failed for reasons 2 through 5. And so the next business you start will fail for reason 2, and then for 3 and so on."

-Peter Thiel on Tim Ferris podcast (http://fourhourworkweek.com/2014/09/09/peter-thiel/), grabbed from his recent book, Tools of Titans

Definition of overdetermined: "To determine, account for, or cause something in more than one way or with more conditions than are necessary."

onion2k 9 years ago |

In well-funded or established businesses that's entirely right, but for seed-funded and bootstrapped businesses I'm not sure Thiel is right. If you've only got a few months money in the bank you don't get to make mistakes 2 through 5 because mistake 1 is enough to shut down the company. That's one of the reasons why seed funding raises have been going up. When I started my business (which failed due to a single very obvious mistake[1]) a typical seed round was $100k. Now it's upwards of $250k. That extra money gives you room to make more than one bad call.

[1] We spent so long making the product "perfect" we ran out of money before we had any customers.

dbg31415 9 years ago |

* Failure: The Secret to Success - A Honda Documentary - YouTube || https://www.youtube.com/watch?v=xOVig5H7UbM