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Failure is not the worst outcome, mediocrity is

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Failure is not the worst outcome, mediocrity is

  1. 1. On Startups A bdoulaye M. Yansane Abdoulaye M ouke YansaneInsight From Dropbox: Failure Is Not The Worst Outcome, Mediocrity IsIm a big, big fan of Drew Houston (founder/CEO of Dropbox). Have known him for manyyears (well before he started Dropbox) and am honored to call him a friend. I will cancelplans with my wife to hang out with Drew if he and I happen to be in the same city. Thereare only a few people Id do that for. (Plus, it helps that she loves the product).Theres one big lesson and insight I want to draw out from Drew and Dropboxs story.The worst outcome for a startup is not failure — its mediocrity. When I first met Drew, he was stillworking for a local Boston-area software company called Bit9 (in the security space, and theyre still around).Good company. Drew was in the midst of working on a startup idea that was in the SAT prep space (called“Accolade” if my memory serves me right). I met with Drew for dinner to talk about Accolade and his plansfor it. I was not a big fan of the idea (and told him so). Super-competitive category, and it was going to behard to differentiate. Most importantly though, I was not sure how big of an opportunity it was. I just didntsee it being a big, “break-out” business. Frankly, at the time, I could tell that Drew was really smart — but Ididnt have enough data to know if he was going to be great (as in a great entrepreneur). I know many,many really smart people. Few of them have what it takes to be great entrepreneurs. As it turns out, Drewis one of those people, but I didnt know it at the time.So, Drew ultimately ended up abandoning the SAT prep idea to do something different (which later becameDropbox).Heres the big lesson: Many founders think that the worst outcome you can have in a startup is failure. Youtry something and it fails. And yes, failing sucks. But, whats worse than failing is going sideways for yearsand years. Being stuck in a quagmire of mediocrity. Things are going reasonablywell, butnot spectacularly well. The reason mediocrity sucks more than failure is very simple: Failure lets youmove on, mediocrity stalls you and keeps you from reaching your potential.Its not knowable as to whether Accolade (Drews SAT prep startup) would have been a phenomenal successor not. But, its doubtful that it had near the potential that Dropbox did. Had Drew “stuck to it” withAccolade, its likely that Dropbox would have never happened and 25 million people (including me and mywife) would have been less happy. And, of course, Drew would have been worse off for it. As he will tell you,Dropbox has been super-fun and super-gratifying. We all dream to have a startup like that someday.It would have been a waste of talent and energy for Drew to have gotten stuck in a quagmire of mediocrity.Imagine if all the founders that are currently stuck in “sideways” startups could somehow pull themselves outof the muck, clean themselves off, and take another crack at becoming legendary. How much better offwould they and the world be?Of course, theres one big counter-argument to all of this. How do you know whether youre stuck in aquagmire? Isnt startup success often about persistence and focus? What if that break-out success isjustaround the corner. Those are good questions. The simple answer is: There are no simple answers. If itwere me, the question I would ponder is this: If 90% of everything started going “right” with your
  2. 2. startup, what will it become? (Ill call this the “wave the magic wand”, best-case scenario). If the answerdoes not please you, and youve been at your current idea a reasonably long time, Id ponder a change.One of the great things about software startups today is that its very possible to reach “ramen profitability”.Thats also one of the bad things. Once you get to “ramen profitability”, running out of cash is no longer away to know that you should be starting afresh and trying something new. You can run a startup like thatindefinitely — and many entrepreneurs will do just that, instead of building the next Dropbox and becominglegendary.Update: The article has sparked a lot of interesting discussion on Hacker News and elsewhere. One point Idlike to clarify: Im not suggesting that stable, sustainable businesses with modest growth are a bad thing. Just that if the business is not something the founder is passionate about -- she should move on. Life isshort. We dont all need to build the next Dropbox -- but we all should stretch ourselves. It reminds me ofan idea that Tim OReilly planted in my head: Pursue something so important that even if you fail, theworld is better off with you having tried.What do you think? Are you stuck in a quagmire of mediocrity? Should you be hitting the reset button andtaking your shot at becoming legendary?Failure Is Not The Worst Outcome, Mediocrity Is Dharmesh ShahoLater in this article, Im going to tell you something you probably dont know aboutDrew Houston, the founder and CEO of Dropbox.Im a big fan of Drew. I have known him for many years (well before he startedDropbox) and am honored to call him a friend. I will cancel plans with my wife tohang out with Drew if he and I happen to be in the same city. There are only a fewpeople Id do that for. Plus, it helps that she loves Dropbox and uses it every day.Disclosure: Drew is on the advisory board for my company, HubSpot.Theres one big lesson and insight I want to draw out from Drew and Dropboxs story.The worst outcome for a startup is not failure — its mediocrity. When I first met Drew, he was still working for alocal Boston-area software company called Bit9 (in the security space, and theyre still around). Good company. Drewwas in the midst of working on a startup idea that was in the SAT prep space (the company was called “Accolade”). Imet with Drew for dinner to talk about Accolade and his plans for it. Candidly, I was not a big fan of the idea, and toldhim so. It was a super-competitive category, it was going to be hard to differentiate. Most importantly though, I was notsure how big of an opportunity it was. I just didnt see it being a big, “break-out” business.I knew that Drew was really smart — but I didnt have enough evidence to know if he was going to bea great entrepreneur. I know many, many really smart people. Few of them have what it takes to be great entrepreneurs.As it turns out, Drew is one of those people, but I didnt know it at the time.Continuing the story...Drew ultimately ended up abandoning the SAT prep idea to do something different. He hadthis other idea for syncing files across multiple devices. It was a problem he faced himself. It too was a highlycompetitive market -- but it was areally big one.Heres the big lesson: Many founders think that the worst outcome you can have in a startup is failure. You trysomething and it fails. And yes, failing is no fun. But, whats worse than failing is going sideways for years and
  3. 3. years. The worst is being stuck in a quagmire of mediocrity. Things are going reasonably well, butnot spectacularlywell. The reason mediocrity is worse than failure is very simple: Failure lets you move on, mediocritystalls you and keeps you from reaching your potential.Its not knowable as to whether Accolade (Drews SAT prep startup) would have been a phenomenal success or not. But,its doubtful that it had near the potential that Dropbox did. Had Drew “stuck to it” with Accolade, its likely thatDropbox would have never happened and tens of millions people (including me and my wife) would have been lesshappy. And, of course, Drew would have been worse off for it. As he will tell you, Dropbox has been super-fun andsuper-gratifying. We all dream to have a startup like that someday.It would have been a sub-optimal use of talent and energy for Drew to have gotten stuck in a quagmire of mediocrity.Not a complete waste of his time -- because few entrepreneurial endeavors are wastes of time, just sub-optimal.Imagine if all the founders that are currently stuck in “sideways” startups could somehow pull themselves out of themuck, clean themselves off, and take another crack at becoming legendary. How much better off would they and theworld be?Of course, theres one big counter-argument to all of this. How do you know whether youre stuck in a quagmire? Isntstartup success often about persistence and focus? What if that break-out success is just around the corner. Those aregood questions. The simple answer is: There are no simple answers. If it were me, the question I would ponder is this: If90% of everything started going “right” with your startup, what will it become? (Ill call this the “wave the magicwand”, best-case scenario). If the answer does not please you, and youve been at your current idea for a while, Idponder a change.The danger of "ramen profitability": One of the great things about software startups today is that its very possible toreach “ramen profitability”. This is where the company is making enough money that the founders can live on RamenNoodles. Thats also one of the bad things. Once you get to “ramen profitability”, running out of cash is no longer a wayto know that you should be starting afresh and trying something new. You can run a startup like that indefinitely — andmany entrepreneurs will do just that, instead of building the next Dropbox and becoming legendary.One point Id like to clarify: Im not suggesting that stable, sustainable businesses with modest growth are a bad thing.Just that if the business is not something the founder is passionate about -- she should move on. Life is short. We dontall need to build the next Dropbox -- but we all should stretch ourselves. It reminds me of an idea that Tim OReillyplanted in my head: Pursue something so important that even if you fail, the world is better off with you havingtried.Easy to say, very hard to do. Its easy for me to say "Hey, you should abandon that startup youre working on thatdoesnt seem to be going anywhere," but that is sooomuch easier said than done. Ive struggled with that very problemmyself. Its hard to let go. Its hard to give up something youve toiled away at. Its hard to all of a sudden admit "youknow, my friends may have been right..." Its hard, because were human and we become emotionally attached to thethings we build. Particularly things weve had to defend against the cold, hard world. Things weve had to nurture anddefend. Things that in some ways define our identity. I have no brilliant insights other than: Be honest with yourself andbe mindful of your opportunity cost. Life is short. We have a limited amount of time to achieve our potential.

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