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The Critical Role of Failure in Success – Corporate Wise Man

May 19
15:23 2017

As I have mentioned in previous posts (here, here) my father used to own a commercial construction company. As such, many of his close friends are very wealthy (it makes sense; buildings are expensive, so if you are going to build one you tend to need a lot of money). Thus, I was fortunate to grow up around a lot of high net worth individuals and have gained a lot of insights from them over the years. Although wealthy, they tend to live modestly, are committed to their businesses, and balance work and pleasure. But there is one attribute many high net worth individuals share and it is the topic of today’s post.

My dad’s best friend, JS, is fantastically wealthy, although you wouldn’t know it if he walked by you on the street. He founded and is the CEO of one of a very small handful of companies that can lay municipal grade concrete sewer and water pipe. His company, although private, is worth hundreds of millions of dollars and JS personally makes $20-30M per year. But it was not always this way. JS came from humble beginnings. He knew from a young age that he wanted to run his own company so he started, and bankrupted, three separate companies before he hit it big with his current enterprise.  Speaking with JS, he will readily admit that he probably would not have been as successful with his company today had he not failed at his prior three companies. In short, it was the failures that taught him the skills necessary to be successful (and the first of these is “don’t fear failure”).

Another example: As readers of my blog know, I am currently working in a company that was recently acquired by a Fortune 500 company, and the original founder has a very similar story. He was working for an IT integrator and thought he could do a better job addressing market needs by starting his own company. So, he left and did just that. The first few years were very rough as he had numerous cash flow issues and struggled to get product on time from major suppliers. He decided to deal with this issue by hiring engineers to create his own products. It was a disaster! The products didn’t work well, customers were complaining, and they were very close to shuttering the doors for good. However, he persisted and worked closely with customers to understand their needs better than competitors and eventually the product quality improved and the business grew. In 2013 he sold the company for just under $300M, netting himself about $100M in the process. To this day, he tells audiences that it was the early product failures that forced him to become more responsive to customer needs which, ultimately, made his product wildly successful in the market place.

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