Translator: Raimonds Jaks Reviewer: Denise RQ
Hi!
And a very good afternoon to you today.
Well, a few weeks ago, I was on the phone
with one of the organizers here,
and we were discussing the topic of my talk, and what's the focus.
And the guy said, "We have four sections,
and we plan putting you into the section named "Creativity Beats Capital,"
to which I said, [lying] -- I wasn't particularly good at it,
and I was very excitedly answering and saying,
"Yeah, that would be great, because that's all I do for living;
make sure that the creativity meets the capital
in the best possible ways."
And the guy went, "No, no, no. You misheard me.
It's about creativity beats capital."
That was odd for me,
because from my pure entrepreneurial perspective,
I would never imagine any reason why they should fight each other.
Actually, they both are needed
for doing things right in entrepreneurship and business.
And later that day, I went home, and I looked at the news,
and there was one on the socialists having won the election in France.
I got even more suspicious, I felt, "OK--"
I've done some investments
and back in my dog days I used to run even a VC fund.
Probably, that beating thing was meant literally.
And I am assigned the capital part here.
But, anyway...
Ignoring the threats and ignoring the risks
of getting beaten up in public,
I'd like to share a few of my thoughts about the importance of failing
as a cornerstone of the entrepreneurial culture,
especially for our new digital technology,
or digital economy era we're in.
For the past ten years,
I've been involved in start-ups and mostly technology start-ups.
I tend to call myself a serial entrepreneur,
which is probably a polite version
for the expression of having failed
sufficiently many times to make a series out of it.
Probably I could be an expert from the field directly for this.
So, does entrepreneurship matter socially?
Even if you are voting for socialists,
you may think that it still has great things in it.
The entrepreneurs are the ones
who are responsible for the diversity and dynamics in economies.
They also cater for self-realization of people.
Not only themselves
but also those who join the team and become the employees later on.
So, it certainly has benefits.
But if you look back in history,
take a step back,
look back in history of what we tend to call progress,
it looks like it's a never-ending sequence of success all around.
Where does failure fit in?
But if you observe it a bit more closer,
then you can clearly see
that those two are really interlinked much more than we would expect initially.
A few examples on that.
Think of Walt Disney.
Walt Disney obviously is the brand name
of the 20th century's animation.
Walt Disney founded his first illustrating company
- that was an illustrating company -
back in Kansas, which immediately got bankrupt.
And he founded this-- because he was fired,
he was kicked out of the local newspaper from an artist's position
for the reason of having no imagination.
Later on, he went and founded his first animation company.
And this also, very, very quickly went bust.
The great thing is that Walt Disney walked away from all that
- what you could refer to as a failure - with really important assets:
which was the team he later collaborated with for his entire career,
and the ideas
about the cartoon characters which later made him famous.
Another example: Thomas Edison.
A very controversial person,
but by many regarded
as the greatest and most successful inventor of the 2nd half of 19th century.
Among other things, he invented
the practicably producible light bulb;
actually, the one we are using pretty much still.
And he invented the light bulb
after several thousands of failed experiment attempts.
Later, when he was asked what it's like to fail several thousand times,
his very famous answer was, "I didn't fail.
I just invented several thousand ways how this really doesn't work."
This shows you a winning attitude
which enables you to learn and carry on.
And the third example probably is Henry Ford --
the automotive tycoon of the 20th century,
the founder of what now is the Ford Motors Company.
He went bust.
He went bankrupt at the age of 38.
And believe me,
getting busted at 38 is a hell lot different than getting busted at 28.
Because I've done both.
And still, he managed to do it right the next time.
And interestingly enough,
he had support and backing by some of the same investors
who lost their money in the first place with him,
which means that through failing,
he maintained and grew the trust of others in what he did.
So, by now, you can probably notice
that my examples have one little bias.
They all are American.
And why?
Don't we, Europeans, have similar examples of successful fails?
Yes, we do.
But for a reason, we don't promote them.
And I'll come back to that in a minute from now.
Why is failing important?
That's about the learning thing, right?
You can grasp it by now.
Because we, as human beings, are not that good at learning,
but we certainly learn much more and better
from failures than from success.
So, failure is actually the richest source of learning in a few ways.
Most typically, the ways are:
it puts your plan to the test
- because before that, it's just a bunch of theoretical assumptions;
later it's tried out in practice.
It puts yourself to the test,
because people tend to poorly judge their strengths and weaknesses
before they try them out.
It took me to blow a few companies
before I realized that I am really bad at sales.
I just make sure now that someone is around to do the job early on.
And it also - like the Disney example -
it also provides you with lots of opportunities
and provides you with lots of assets of importance later on,
be it a team or capital.
By the way, the smart capital providers
would always see the baggage of genuine fail
being more assuring than false success.
So, that's what is coined as the failing forward concept;
meaning that each failure brings you closer to success,
if you are able to learn on it.
But it requires two prerequisites:
one is the ability of the person to take out the me,
to depersonalize the failure,
because it's very difficult to learn from painful experience.
But the second and even more important thing
is the social acceptance of failure.
Because the benefit of learning from failure is very limited
if society does not give you the second, or the third, or the 55th chance;
it's really limited.
So, it has a social dimension in it.
A few words... I'm running out of time I've noticed.
I'm being too optimistic, but that's tough.
A few words on us:
we have issues with the culture in the North of Europe,
or put it, in the northeast of Europe.
We have these Germanic cultural traits
where everything should be in order,
and failure is no option.
So, basically, the hilarious examples
which still are enforced by law in a few countries,
which are banning out you from business,
if you have failed the first business for a number of years.
But we have a great example
I would like to share with you as a learning example, nearby,
in a very similar culture, which is in Finland.
So, what Finland did-- and for us in tech industry it's very easy.
We always have the benchmarked ecosystem which is Silicon Valley,
which TED comes from,
and everyone wants to beat it or at least match it, right?
The Finns, two decades ago,
figured out they're an industrialized country,
but they wanted to do something different;
and they wanted to go on with the digital thing.
And they started really to do great things.
They started to invest into R&D
and gave all sorts of subsidies to the companies and everything;
and it was great.
For 15 years, they realized that Finland is doing great
at those innovation scorecards
and all beauty contests Europe is obsessed with, right?
We all have something to be proud of in there,
but it didn't really work
because the business didn't have any impact.
It didn't grow.
It was there, there were lots of start-ups,
but they didn't grow sufficiently fast.
They didn't internationalize properly,
which is very important for tech industries.
So, they changed the tactic about seven years ago.
They started not just--
because the typical European answer would be,
"Put more money into innovation system.
Wrong.
They started to promote entrepreneurship as a culture.
It was lots of great things they did.
Just to mention:
Last year, they launched a calendarized official Fail Day of the nation,
which is somewhere in October,
where everyone is invited to share their fail story with a lesson.
A sharing thing is also quite difficult for this part of the world, right?
...and then networking thing.
If there is no beer served,
networking is difficult in the north of Europe.
Maybe by coincidence, but in last few years' time,
Finland has done remarkably better than before with all that money.
Of course, money is still there.
So, what's the lesson?
If we want to beat Silicon Valley, if we want to beat Finland,
match Finland, and come close to them,
I think the lesson, very simply, is:
just more money is not an answer.
Of course, we are underfunded in many ways,
but just more money is not an answer.
The culture is.
There are a few very practical things we can do.
It's not a punchline in a presentation.
There are a very few practical things.
One: to ensure the safe passage back
for those people who are taking their sabbaticals from their normal jobs,
which is mostly in R&D and creative industries.
They know that they can come back to that place after they have tried out
and worked for a while on a start-up.
Another thing is still the money.
The capital thing.
[Invest] the right way.
Meaning that we're--
As opposed to what we have done here;
we've offered huge bureaucratic grants longing to the lifetime of the companies,
which make them critically dependent on the grants,
and the business is over in that very moment.
[Offering very little], but no strings-attached,
so-called preset money for those guys
who really are taking a break from their careers
to focus for 2 or 3 months maximum on an project or an idea,
and then, see where it takes them from there.
And the last thing, of course, is to have our own Fail Day.
I think we deserve it.
So, I'll end with this one.
Educational visionary, Sir Ken Robinson,
who is also well-known for his TED talks, has once said
that if you are not prepared to be wrong,
you'd never come up with anything original.
I'd like to elaborate a little bit and [take] it further by saying
if we are prepared to accept failing
as a valuable outcome of the process of [making],
we have unlimited opportunities to succeed in everything we do.
Thank you very much.
(Applause)