Failure, part 2

In a Western called Waterhole No. 3, James Coburn plays a “high-spirited card sharp who snatches a chest of gold bullion” away from thieves who stole it from the U.S. Army. Lots of chases ensue. At the end, he turns to the audience and tells us, smiling: “Maybe we take gold too seriously.”

Then moments later, amid gunshots, Coburn turns to the viewer again. He sternly reconsiders. “We don’t take gold seriously enough,” he tells us in his last words to the audience.
– Jacob Needleman, Money and the Meaning of Life, via CBC

After 9/11, I lost my mojo. I had been doing really well for a couple of years prior to that, but then I made a series of bad financial decisions that left me in a big hole.

The first mistake was draining the bank account to fix up our new home. We had just bought a nice house, but it needed a lot of “freshening” before we’d be really happy with it. Because we were spending most of our time in New York, we figured we might as well do everything at once. We zoomed past our budget and even dipped into our credit cards a little bit. What harm could that do? Based on my current consulting income, I’d make it back in a jiffy …

Except that the next mistake I made was impetuously quitting a really good contract with a big bank. I was making New York money and living in a paid corporate apartment – but maybe 9/11 was going to affect the economy a bit. Maybe contract opportunities would be a tad scarce. Not a smart decision.

On to mistake #3: Since there weren’t any good contracts at home, I decided to work on a startup project with a couple of good friends. Leslie had just gotten into yoga, and she wanted to create software to help her manage her practice. Surely every other yogi and yogini would want that, right? Her husband, Ken, was a great programmer, and I enjoyed working with him. So when they asked for help and offered me a little bit of ownership to go with a fixed amount of cash, of course I said yes.

Here’s the thing – I KNEW this project wasn’t going to succeed as it was conceived, and yet I went along with it anyway! How stupid was that? I just wanted to have fun programming with my friend, but the opportunity cost was very high for me. After all was said and done, I worked on that project at a fraction of my typical rate. I’ll talk about the lessons from this project another time, but I don’t want to lose the flow of my little story here …

The next major life decision was by no means a mistake, but it was certainly costly – part of the reason I quit that contract in New York was because I wanted a kid, and I knew Paula would never be in the mood to have one until we settled into our new house. I wanted to go home. That’s perfectly understandable, but I didn’t recognize how all these factors fit together in context. Anyway – we had a kid, and Gus totally rocks … but it changed everything.

No more messing around – I had to get serious. I still wanted to do something entrepreneurial, but I decided to go back to my roots. I was a successful consultant for many years. What I lacked was a great partner, so when my Uncle Dan asked me to partner with him on a new consulting business, I jumped at the opportunity.

My Uncle Dan was the reason I got into computers. He built a successful software business and sold it for a big exit before it was cool to do so. He’s brilliant and experienced. There was no way we could fail.

So while Paula was pregnant with Gus, I devoted about six months of my life to working on this company with Dan, while keeping my programming skills sharp on the yoga software. We were doing lots of useful and interesting preparation, but we weren’t actually getting any paying jobs (major mistake #4, if you’re counting). There wasn’t a lot of easy business to be had at that time, and we weren’t hustling hard enough to get revenue.

Eventually, I realized that I was burning a massive hole in my credit cards, living on borrowed money and not bringing in any tangible income. Ouch. And then we had a new baby. My wife was focused on being a mother – it would have been a pretty good plan for me to focus on stabilizing our finances, but no … I had to do my own thing. That was selfish. I really messed up.

It was tempting to file for bankruptcy, but I knew I’d be able to dig out of the hole eventually. “If I CAN pay it back, then I’m morally obligated to pay it back.” I got lucky and ultimately found a good contract that lasted about 18 months. Then I worked a while on contract for a wonderful consulting company in my home town, Atomic Object. Loved those guys. In the middle of that, I had a short stint making New York consulting money again, which certainly helped our finances.

And then Microsoft called. Microsoft was a real lifeline for me. It paid enough that I could see a clear path out of the hole; it had great health insurance (novel idea!); and it provided a level of consistency and security that I had never experienced – something that my wife valued greatly. Shitting away our finances put an enormous strain on our marriage. If this job hadn’t helped to stabilize things, I don’t know if we’d still be a family. For that reason more than any other, I feel an enormous amount of gratitude toward my employer.

I haven’t learned what I expected to learn in my five-and-a-half years at Microsoft so far. I thought it would be an opportunity to show off and expand my technical chops. While I’ve certainly learned some cool technology, that’s not the main thing I’ve learned.

The main thing I’ve learned is that I don’t know everything, and that’s OK. There are lots of other people to work with – no one person needs to know everything. I started a podcast about 4 years ago thinking that it was an opportunity for people to bask in the sunshine of my knowledge. That attitude lasted about 2 shows. The podcast turned into an interview show that’s given me the opportunity to talk to a hundred people who know a hell of a lot of things I don’t.

I’ve learned about business. Technology is cool, but if you want to succeed at business, technology is never enough. Working with successful software companies of all sizes and talking with startup founders on my podcast has taught me a great deal about what it takes to sell software and build a sustainable business. I’m very lucky to have been exposed to that.

And now I’m recognizing that the financial mistakes I made a few years ago haven’t killed me. Our finances don’t completely suck anymore.

From that vantage point of relative strength, I’m looking back at my business failures and personal financial mistakes as dispassionately as possible. That’s really hard. It hurts – physically hurts – to look back at the mistakes I’ve made, but I know it’s necessary. As I mentioned yesterday, I’ve done a great job absorbing abstract knowledge about startups and business over the last 5 years, but I haven’t really addressed the concrete knowledge that hit me over the head during the previous 5 years. It sucks to look at those failures, but I’m doing it. Otherwise, I fear I won’t truly learn from them.

I intend to get back on the horse of entrepreneurialism again at some point. However, I’m not going to risk my family’s basic wellbeing to do it. I realized recently that even though I’ve dug myself out of the big financial hole I was in, I did it in a pretty sloppy way. I have this nasty habit of letting my lifestyle rise up to meet my income, and that’s a sure way to stay poor. That sloppiness is a character flaw, but it’s a fixable one. I’m rereading Ramit Sethi’s book, and I’m starting to get a better handle on my finances. Unless you’re young and single, I think that’s a precondition for creating a startup. Get your shit together, man. (It’s probably a good idea, even if you’re young and single.)

I’m in a really good spot. I’m learning from the past, looking forward to a great future, and living in the present as well as I can.

Thanks for indulging me in this bit of naval-gazing reflection. It felt necessary in order to talk honestly about the cool things I’m working on.

4 thoughts on “Failure, part 2

  1. Pingback: What money can buy « Patrick Foley

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