Fear of failure is natural. For startups, entrepreneurs, and company founders, fear of failure and our response to that fear can be critical to our success. Indeed, when viewed from the inside, startups can be scary: They are, by definition, journeys into the unknown. Startups deal with unknown products that solve problems at an unknown price point for largely unpredictable customers. What could go wrong?
(Photo credit: TechCrunch)
When you combine that kind of uncertainty with large amounts of invested capital, your personal reputation, and months or years of your life, it can be uncomfortable to say the least. In an on-stage dialog between Dave McClure and investor Vinod Khosla at SXSW Interactive, Khosla shared some of his views on the importance of fear and being uncomfortable in the startup world. As a co-founder of Sun Microsystems, former partner at Kleiner Perkins, and founder at Khosla Ventures, Khosla shared some of his insights into how successful startups should approach their work. Primary amongst these observations is his approach to uncertainty and risk.
Khosla himself usually turns down speaking engagements engagements, so it is a window into his emphasis on failure and its lessons that he accepted the invitation to be a speaker at Fail-Con, a conference held in San Francisco that analyzes ventures that have failed and the lessons they learned in the process. Mr. Khosla shared his advice at that event, as he did at SXSW, with a focus on the necessity and centrality of risk, and how it can be a key indicator that we are on the right track.
In recounting his success, Mr. Khosla is adamant that having a firm and well-thought-out willingness to fail gave him the ability to succeed. As entrepreneurs, we know that this does not mean to take failure lightly if it were to happen, but that it is OK, and in fact necessary to step into uncertainty and risk if we are to find our full potential. Khosla is fond of pointing out to his audiences that "Most people do not do what they are capable of doing because of the fear of failure." This is as much a call-t0-action as an observation, since recognizing this fact and recognizing the necessity of uncertainty and risk precedes any successful entrepreneurial or startup venture.
Khosla continued to point out that if we respond to risk and fear by changing what we do to reduce risk, we will often end up creating an even worse situation for ourselves. If you reduce uncertainty and reduce risk, you almost always reduce the value of your intended outcome. In the worst case, this continues to the point that the consequences of success can be worse than the failure you tried to avoid: What is the value to achieve something that is inconsequential, and nobody cares about? With this in mind, Khosla explains his current bias towards bold and high-risk, high-return projects - things that can change the world - over smaller ventures.
He sums up his take on risk, fear, and how we respond to it with a simple observation: Taking the risky path and being smart about it simply "Makes life more fun."
Kevin Ready is a serial entrepreneur, business leader, and author of the book Startup: An Insider’s Guide to Launching and Running a Business.
