EM­BRAC­ING F---UPS

Global move­ment comes to Ottawa, changes at­ti­tudes about fail­ure

Ottawa Business Journal - Techopia - - System Update - BY STEPHEN KARMAZYN

In busi­ness as in life, fail­ure can be a dirty word.

But if there is truth that you must fail be­fore you suc­ceed in busi­ness, why do so many en­trepreneurs shy away from the sub­ject?

In an ef­fort to truly em­brace fail­ure, there is now a global move­ment called F---Up Nights, where pro­fes­sion­als gather and pre­sen­ters openly com­mis­er­ate by telling their sto­ries of fail­ure.

“We were drink­ing mescal and we re­al­ized that we had all screwed-up busi­nesses, but we had never shared those sto­ries,” says Leti­cia Gasca, co-founder and di­rec­tor of F---Up Nights. “That was weird. We were talk­ing about (our fail­ures) for three hours. We ended up con­clud­ing that had been our most mean­ing­ful busi­ness con­ver­sa­tion ever.”

Two weeks later, F---Up Nights was born. Eight months later, the move­ment had spread to 15 cities. In 2015, three years af­ter the com­pany started, they were it was in 71 cities across the world. And now the event has of­fi­cially gone vi­ral with events in 144 cities and 53 coun­tries.

Ottawa is one of three Cana­dian cities host­ing the event, along with Toronto and Cal­gary. Ap­par­ently, talk­ing about fail­ure is now in vogue.

“Some of the best sto­ries are about how some­thing to­tally crashed and burned,” says Ja­son Con­nell, or­ga­nizer of F---Up Nights Ottawa.

“You can find any num­ber of events where some­one is will­ing to get up and say they hacked, they hus­tled, they did xyz and now they’re a huge suc­cess, but I don’t think it’s very of­ten where you find an event where some­one will stand up and say, ‘This re­ally went to hell.’”

F---Up Nights also fu­elled the cre­ation of the Fail­ure In­sti­tute, which en­listed univer­si­ties for the sole pur­pose of study­ing busi­ness fail­ures.

“We re­al­ized that there is al­most no … quan­ti­ta­tive re­search of busi­ness fail­ure,” Gar­cas says.

If you’re won­der­ing about the re­sults, the No. 1 iden­ti­fied rea­son for busi­ness fail­ure is in­suf­fi­cient in­come – some­thing that Ottawa-based Cyril Moukarzel knows all too well.

The co-founder of eCel­ery, an on­line food ser­vice that de­liv­ered home­made qual­ity foods to lo­cal doorsteps, Moukarzel was given the high­est pos­si­ble rat­ing by the Car­leton Univer­sity Lead to Win in­cu­ba­tor/ ac­cel­er­a­tor pro­gram. His ven­ture was grow­ing fast and seemed poised for suc­cess be­fore it sud­denly closed shop.

“We did not cal­cu­late ef­fec­tively how much run­way we needed un­til we hit crit­i­cal mass,” Moukarzel says.

“We had enough fund­ing to start the busi­ness, we had enough fund­ing to grow it, but we didn’t have enough fund­ing to … go to all the cities in Canada, which is what we needed to do to be at scale.”

Moukarzel says his com­pany needed bridge money from an­gel in­vestors to sus­tain it un­til it could scale. When that didn’t ma­te­ri­al­ize, the ser­vice was no longer fi­nan­cially vi­able.

“Dur­ing my ex­pe­ri­ence with eCel­ery, I’ve learned more than I’ve learned in my en­tire 23 other years of my life,” he says with a laugh, adding he was pulling 80-hour work weeks when busi­ness was re­ally cook­ing.

“You grow on a whole new level. You start to see things in a dif­fer­ent way. Start­ing a new busi­ness, which I will be do­ing quite soon, is go­ing to be a lot eas­ier now that I know some of the kinks and lit­tle de­tails.”

Dur­ing that time, Moukarzel says he was wear­ing a lot of “dif­fer­ent hats,” forc­ing him to do mar­ket­ing, HR, pitch­ing and oth­er­wise run­ning the busi­ness side of the com­pany.

Ay­din Mirzaee also knows a thing or two about fail­ure. While cre­at­ing his big­gest suc­cess to date, sur­vey soft­ware com­pany Flu­id­ware, he piv­oted sev­eral times be­fore dis­cov­er­ing a win­ning strat­egy. Flu­id­ware was even­tu­ally pur­chased in 2014 by global soft­ware-as-a-ser­vice com­pany Sur­vey­Mon­key.

That sto­ry­book end­ing isn’t typ­i­cal. Many ex­perts pre­dict that 90 per cent of en­trepreneurs fail. That’s not ex­actly com­fort­ing for new en­trepreneurs, but Mirzaee says you’ve just got to go for it.

“It’s about jump­ing be­fore you look to a cer­tain ex­tent,” he says, “be­cause no mat­ter how per­fect the idea is, you’re go­ing to fail. You’re go­ing to have to pivot and pivot and pivot un­til you get it right. Some­times peo­ple are wait­ing for the per­fect busi­ness model or the per­fect busi­ness that will be a $50-bil­lion en­tity. As a re­sult, they never end up ac­tu­ally act­ing. Or they’re afraid that be­cause this idea’s not per­fect, there’s a large chance of fail­ure.”

Mirzaee wishes that Ottawa would it­self pivot to be­come a more wel­com­ing en­vi­ron­ment in which to dis­cuss fail­ure – in other words, more like Sil­i­con Val­ley. Still, he thinks the lo­cal scene is chang­ing.

His main take­away from fail­ure? Never give up.

“It takes a decade to build an overnight suc­cess,” he says.

As for the high fail­ure rate, Tony Bailetti, di­rec­tor of Car­leton’s Tech­nol­ogy In­no­va­tion Man­age­ment pro­gram and the Lead to Win pro­gram, thinks it’s more of a prob­lem for star­tups that haven’t passed what he calls the “first wall.” He de­fines this as com­pa­nies that are still pre-rev­enue.

Bailetti be­lieves the suc­cess rate for busi­nesses be­yond that “first wall” will be much higher.

What­ever statis­tic you be­lieve, ev­ery­one agrees that start­ing a busi­ness is hard.

“In On­tario, we are re­ly­ing too much on govern­ment money,” says Bailetti. “We’re not pay­ing enough at­ten­tion to what the core of en­trepreneur­ship is about. Mis­take No. 1 is to con­fuse govern­ment money with cus­tomer money. That is a ter­ri­ble thing to do.”

Bailetti says that not all dol­lars are cre­ated equal, and that a quick cus­tomer dol­lar is not the same as a govern­ment dol­lar, which of­ten takes a lot of pa­per­work and bu­reau­cracy to at­tain.

“I love govern­ment pro­grams,” he says, “but they take time, it’s a dis­trac­tion (and not a) sub­sti­tute for cus­tomer dol­lars.”

Bailetti also be­moans the myth of “su­per­men en­trepreneurs.”

“You can’t do it alone. You need peo­ple who are smarter than you are, and dif­fer­ent than you are.”

Bailetti calls for di­ver­sity of skills in a startup, what he calls a “com­plete brain team.”

But at F---Up Nights, talk­ing about fail­ure isn’t nec­es­sar­ily about learn­ing.

“You can learn from the mis­takes of the pre­sen­ters,” Con­nell says, “but I don’t think that’s the point of the event. It’s more about be­ing com­fort­able, ad­dress­ing fail­ure and talk­ing about fail­ure.”

Con­nell wants peo­ple to share their sto­ries to show a more re­al­is­tic busi­ness com­mu­nity.

“All th­ese overnight suc­cess sto­ries, very of­ten there are five to 10 things that didn’t work out be­fore. For us, it kind of acts as ther­apy for the speak­ers, but for the at­ten­dees it says, ‘OK, here are some very smart, tal­ented peo­ple and they f---ed up.’

“It’s cool, it hap­pens.”

In On­tario, we are re­ly­ing too much on govern­ment money. We’re not pay­ing enough at­ten­tion to what the core of en­trepreneur­ship is about. Mis­take No. 1 is to con­fuse govern­ment money with cus­tomer money. That is a ter­ri­ble thing to do.

TONY BAILETTI, DI­REC­TOR, CAR­LETON TECH­NOL­OGY IN­NO­VA­TION MAN­AGE­MENT

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