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Copyright © 1999 -1997-2014Venture Group, Inc. All rights reserved.   Updated March 3, 2004

To Succeed, the Entrepreneur Has to Be Able to Fail

By: David Ignatius
(c) 1999 The Washington Post
This article first appeared in the International Herald Tribune, Wednesday, March 17, 1999 and is republished with their kind permission


WASHINGTON -- Between visits to some of Silicon Valley's hot companies, I found myself puzzling over a question: What is it hat makes the high-tech world feel so alive and bursting with energy at a time when the culture of official Washington seems so dead?

The best answer I can offer is something I heard at Cisco Systems, a wildly successful commune that is building the Internet with its fast routers and switches.  The comment had to do with the tech world's tolerance for risk, and for the failure that sometimes comes with it.

"If you hit five out of five, you won't do well here," explained Dan Scheinman, a Cisco vice president. "People like that aren't taking enough chances.  If you hit eight out of ten, that's Cisco way."

Washington is a city of five-out-of-five people, driven by an ingrained intolerance of failure.  Any screw up, misjudgment, misstatement or inconsistency makes you instantly subject to second-guessing from members of Congress, consumer watchdogs, independent counsels and , yes, from the 20-20 hindsight brigade in the press.

This kind of atmosphere is destructive of creativity and initiative.  I cannot image a good newspaper, for example, surviving under that kind of microscopic scrutiny that is applied to public official.

The phrase "I made an honest mistake" is not one you hear much in Washington.

Washington is compulsive, risk-averse, excuse-making, blame-shifting, afraid-of-falling-off-the greasy-pole kind of town.  Any mistake is a potential career-killer.  Politicians are that way, obviously. No wonder they don't pass laws any more.  It's too risky. They might make a mistake; someone might object.

If you want a stunning example of what the zero-defect mentality has created, take a look at the modern CIA.  They have become so worried about running afoul of lawyers and congressional oversight committees that in recent years, they have almost gone out of the spying business.  Too risky.

Hold on, you say, what about President Bill Clinton? He is hardly a zero-defect guy.   This is true, but the problem is that he pretends to be one. This is the Washington way. He is a flawed and immature man, in ways that become more obvious every day, but he is still trying to act as if he is perfect.  Maybe the reason Americans like him so much is that they know that he knows it's really a con.

Here is an anecdote which illustrates how different the culture of Silicon Valley is.

Several years ago, a man joined a Silicon Valley start-up company. He was vary talented, but it wasn't the right fit. A few days after he left the company, he visited one of America's top venture capitalists. It's OK to fail, the venture capitalist advised.  "This one didn't work out, but the next one will."

Part of what makes Silicon Valley so different is that people don't have time for finger-pointing and recrimination. The technology world is simply moving too fast.

"It's like lava, bubbling up everywhere," says Jerry Yang, 30, co-founder of Yahoo. Business success, in this environment, means staying just ahead of the lava.

Mr. Yang started Yahoo a few years ago as a quirky guide to cool sites on the World Wide Web and transformed it into a business that now has a market value of roughly $33 billion.  His personal net worth is now about $3.6 billion, but he still doesn't have an office with a door you can close.

Instead, he works out of a messy cubicle, with clothes piled in a heap on the floor and knickknacks strewn across his desk.  If you looked hard, you could probably find some empty pizza boxes.

"Speed matters," says Mr. Scheinman at Cisco Systems.  With technology changing so fast, successful companies are the ones that take risks on new products and get them to market fast. More careful, risk-averse companies get left in the dust.

"The fast beat the slow," says Mr. Scheinman.  That is the iron law of Silicon Valley. Even a giant company like Microsoft is not powerful enough to derail the onrush of technology.

To be sure, it helps that the tech world is a culture of abundance, with lots of rewards to go around for the winners. This part of what drives the risk-taking machine. but nearly every young tycoon in the valley has had the experience of failure, and bounded back from it to success and wealth.

Perhaps the best thing you can say about Washington is that it is slowly being infected by the spirit of Silicon Valley. Take a drive out the Dulles toll road and you will see a new world of business led by Internet companies like America Online.

These companies would not be growing so fast if they were not making mistakes along the way and learning from them.


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