Fear of failure spreading to Silicon Valley?

The following is a quote from Judy Estrin‘s Closing the innovation gap:

The crucial conviction that “the only way you can be a failure in Silicon Valley is not to have tried” is now at risk. “Having been a participant in a company that failed is a much bigger stigma than it was in the past” says VC David Liddle.

  • If it is true, then that really is a shift. I seem to recall a time when having a dot.gone on ones CV was a must – showed that you knew the difference between success and failure.

  • If it is true, then that really is a shift. I seem to recall a time when having a dot.gone on ones CV was a must – showed that you knew the difference between success and failure.

  • Failing when others succeed is tough and demands respect. Easier to fail when everyone around you is doing the same thing … you don’t stand out as much!

  • Failing when others succeed is tough and demands respect. Easier to fail when everyone around you is doing the same thing … you don’t stand out as much!

  • The only thing that matters is why you failed, what role did you play and – crucially – what did you learn from failing. It’s hard (if not impossible) to know it for an external observer, but if you’re the one who failed you should intimately analyze and understand why it happened. You’ll be stronger after that. What doesn’t kill you makes you stronger, no?
    However, I’m a believer of Marc Andreessen’s theories about luck and success… you can get deceived quite easily from success but you hardly can from a failure. On this, have a look at this book: http://tinyurl.com/65llcq

  • The only thing that matters is why you failed, what role did you play and – crucially – what did you learn from failing. It’s hard (if not impossible) to know it for an external observer, but if you’re the one who failed you should intimately analyze and understand why it happened. You’ll be stronger after that. What doesn’t kill you makes you stronger, no?
    However, I’m a believer of Marc Andreessen’s theories about luck and success… you can get deceived quite easily from success but you hardly can from a failure. On this, have a look at this book: http://tinyurl.com/65llcq

  • Does she give any insight as to why the change is taking place, thats likely to be very educational.

  • Does she give any insight as to why the change is taking place, thats likely to be very educational.

  • At the risk of pimping a ex-colleague’s work, that is really what her book (the innovation gap) is all about. Judy knows how to kick up a stink :).

  • At the risk of pimping a ex-colleague’s work, that is really what her book (the innovation gap) is all about. Judy knows how to kick up a stink :).

  • I’ll wait for Nic to precis the book then 🙂

  • I’ll wait for Nic to precis the book then 🙂

  • It’s times like this when the real fear is that the failure is contagious. Suddenly the VC world becomes very superstitious and starts acting like sailors believing that bad omens should be thrown overboard. It’s really about how the VCs/Employers view it as potentially impacting their own careers and investments.

    Repeated failure is obviously not ideal but a one time success can be just as unreliable as a one time failure.

    Still, if there are plenty of people chasing a few jobs then employers can afford to be more choosy and it’s an easy screening process.

  • It’s times like this when the real fear is that the failure is contagious. Suddenly the VC world becomes very superstitious and starts acting like sailors believing that bad omens should be thrown overboard. It’s really about how the VCs/Employers view it as potentially impacting their own careers and investments.

    Repeated failure is obviously not ideal but a one time success can be just as unreliable as a one time failure.

    Still, if there are plenty of people chasing a few jobs then employers can afford to be more choosy and it’s an easy screening process.

  • This is only an indication of the gradual collapse of institutional VC in the Valley. When compensation is all management fee and no carry, this sort of thing is inevitable.

  • This is only an indication of the gradual collapse of institutional VC in the Valley. When compensation is all management fee and no carry, this sort of thing is inevitable.

  • nic

    Thanks for the comments people.

    A couple of responses:

    1) I agree with Fabio and Andy that results are an unreliable guide to ability and it is far better to look at what was actually done (where possible). Pay on results by all means, but judge on process.

    2) As to how Judy explains the change, it is along the lines that Andy and Warren intimate. The VC industry grew too big too quickly from 1999-2000 and got used to quick returns (a problem exacerbated by some of the web2.0 successes) with the result that there is less experience of building great companies over time and less tolerance for short term problems. The result of this is less confidence (ability?) amongst the VC community in judging whether a previous failure is an indication of future failure or not combined with lower tolerance of mistakes in assessing entrepreneurs. I would agree with this to an extent, but with the caveat that some funds are much better than others. My guess is that a lot of capacity will come out of the market (i.e. there will be less VCs) and that might go some way to fixing this problem.

  • nic

    Thanks for the comments people.

    A couple of responses:

    1) I agree with Fabio and Andy that results are an unreliable guide to ability and it is far better to look at what was actually done (where possible). Pay on results by all means, but judge on process.

    2) As to how Judy explains the change, it is along the lines that Andy and Warren intimate. The VC industry grew too big too quickly from 1999-2000 and got used to quick returns (a problem exacerbated by some of the web2.0 successes) with the result that there is less experience of building great companies over time and less tolerance for short term problems. The result of this is less confidence (ability?) amongst the VC community in judging whether a previous failure is an indication of future failure or not combined with lower tolerance of mistakes in assessing entrepreneurs. I would agree with this to an extent, but with the caveat that some funds are much better than others. My guess is that a lot of capacity will come out of the market (i.e. there will be less VCs) and that might go some way to fixing this problem.

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