Is there such a thing as “Successful FAIL”?

A {grow} Community Week Contribution by Caroline Di Diego (aka Casudi)

Failure is a stigma in our culture, so we tend to put it out of our minds, and avoid it at all costs.  Yet, failure is unavoidable … and according to Seth Godin and many other entrepreneurial gurus, quite desirable.

I have been in business more than 20 years and consider a successful FAILURE as a pivot point, not necessarily a stopping point. Here is the story of my most recent “FAIL” credential!

In May 2010, I founded emidaASIA with Alex Conrad, a seasoned entrepreneur with vast experience in Asia. We had the idea of introducing ‘mobile money’ to the “un-banked” population in Asia.  Those without bank accounts could engage in commerce via their mobile phones, thus taking a giant step into the 21st century.

We licensed technology from Emida, a leader in prepaid global solutions, with operations in 40 countries outside Asia and $1+ billion annual payments. They are a smart, profitable, established company, and I had personally known the CEO for over 10 years. In fact I had brought some of the first angel investors to the company!

We did all the right things: we set goals, and had measurable milestones to success, with realistic time frames.  We separated strategy from tactics and knew the signs to look for in a strategic FAIL (failure to execute the overall plan in the defined timeframe) versus a tactical FAIL (failure to execute the individual steps which result in accomplishments along the way).

Our first goal was to test the viability of this exciting new business model in Asia.

Our mobile products were developed to target opportunities for mobile customers to connect through our product — driving more traffic on the network, more transactions and more revenue and profits. Good for everyone’s bottom line!

Fast forward — a year later — we were just not getting traction and the team was faced with the fact that we were failing.

But a bigger decision was HOW to fail? We had to review assumptions, and analyze missed goals, (and there were many), including our conviction that we would be able to spread the Emida ”rest-of-world” scenario straight across Asia.

Some of the tactical goals we missed were related to the time & cost to bring a partner to contract; technical back-up for multi-language implementation; and finding key personnel to run local operations.

We also found that our market assessment and business model assumptions were incorrect:

  • Market saturation was rapidly increasing with seemingly competitive products often with no transactional history…..
  • Local operators were reluctant to get too far ahead of the market, they were unwilling to select our product over competitor’s mobile wallets……
  • Government and bank approvals can be excruciatingly slow. We should have given more consideration to the ‘gray’ and ‘black’ aspects of soliciting approvals……
  • Our licensing model was too thin to support a viable business to pay us, and multiple 3rd parties who expected a piece of the transactional pie…. As a self-funding company, staying power to wait a couple of years for critical mass was not there.

We were facing rapidly saturating markets, impossibly slow and murky approval processes, and seriously diminished margin expectations.

So now what? We recognized that we had a “strategic FAIL”, and came to a quick decision.  While it no longer made sense to move forward as planned, it also did not make sense just to simply walk away … there was a lot of brand equity established.

We quickly established a new partnering agreement with Emida, which transitioned the emidaASIA brand equity and market intelligence over to them. Combined with their resources and experience in other parts of the world, our equity enabled Emida to build on our gains with a fresh look.

Although we failed, we did salvage the project and gained a wealth of knowledge through our demise:

  • Build in flexibility to account for changing market conditions — even when we thought our assessment was solid.
  • Licensed technology is a great way to get a quick start in a marketplace, but you have to be able to accurately communicate to the marketplace what they are investing in? (IP and/or mega traction)
  • Scaling rapidly across a continent benefited from a key partner.
  • Although our major thrust was a failure, in the process, we identified MANY exciting business opportunities in related niches, including predictive analytics for the mobile money transactions.

So stay tuned, we’re not done yet! New ideas and businesses will emerge from the ashes!

Don’t you agree that this was a successful failure?

Caroline Di Diego (CASUDI) is a multi-faceted entrepreneur with more than 20 years of experience with early-stage companies, building effective start-up teams, creating workable business models, and bringing new technologies successfully to market (well usually!). You can find her blog at www.esse-group.com and follow her on Twitter @CASUDI

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  • Great post, I enjoyed ready reading it, Keep
    posting good stuff like this.

  • Great testimonial, Caroline! Adapting to change is key (and change can be just about rethinking strategy).  The successful startup is always scambling.  Success doesn’t last forever either and unless there is continual innovation, everything eventually winds down.

  • Caroline – Thank-you for sharing your very personal business situation in a public way. All too often we put on a smile and a brave face even in the midst of career snags. A strategic FAIL does not have to be some bombastic million dollar losing event, in fact, most are much smaller than that but we do need to recognize when to pull the pin and when to customize our approach. I have shared my snags here and on other channels (including my own) because none of us escapes them. Seth Godin has been public about the years when he barely made payroll and lived on soup and cereal. No successful person has made it without a strategic FAIL. It is our ability to deal with it, ask for appropriate help and be honest with our own abilities to do what makes the most sense for us next. 

  • Lisa Petrilli

    Caroline,

    I absolutely love and appreciate how you “bared your soul” here about your personal experience.  You did a tremendous job of helping us see how important it is to not just set goals and meet your tactical timeline, but to understand the complexity of assumptions and processes along the way that play a critical role in reaching our visions.  Most importantly, I am thrilled to know you found exciting new business opportunities along the way. All the best with them and I look forward to learning more in the near future!

  • Kenny Rose

    Class. Mark Class.

    Entrepreneurs with your mindset. Never Fail. They Just Get Better and Better. And by the way. If you ever need an employee with passion and heart who wants to work and partner with real leaders. Let me know. Will blog for re – tweets. 🙂 

    Seriously. Great. Love your insight. This is one place that is always on my list. 

    Double Hat Tip. 

  • Caroline, I prefer to think of failure as unavoidable rather than desirable. Who among us would not like to achieve their goal on the first try? But that’s my only tiny quibble with your great post. Thank you for giving us a great example of going through a failure, recognizing it, acting to shut it down, assessing the lessons and judging how they might be applied. If all the commentary on failure was like yours, then my “Cult of Failure” post here (June 2) would not have been needed.

  • Steven, note the experts are the ones that call it desirable! I might call “failure” necessary if we are on a successful path. It was my recent co-founder Alex who used the words “Fail credential” when we were looking at an early member of our core team. The individual in question was extremely successful from the get go and it appeared had no experience with failure. Another team member demonstrated very early on they could not deal with failure, even a very small routine setback. So thinking this all through again it is not the “fail credential ” as such, but how we deal with failure, process it and that’s necessary, even desirable!

    BTW I mentioned your fabulous “Cult” post in my recent “Reality of Success” post……. yes, one also has to be able to process success! Thanks for your contribution and it’s really great to meet you through BusinessGrow!

  • Thinking about the never fail….. just get better ……. well sometimes I have encountered those who have a long list of failures and revel in them! Well that’s another post.

    Always a pleasure to run into you in chatville, and thank you so much for your comment here in the BusinessGrow classroom.

  • Those that haven`t failed just remain way below exploiting their true potential. 

    In that sense failure is a measure of true worth that success on its own cant fathom 

    Fine read!

  • Anonymous

    Caroline, this was an awesomely generous post. Most “what I’ve learned from failure” blog posts I’ve encountered are light on the details; yours was detail-rich, and provided the sorts of real-world learning that informs as it encourages. Can’t thank you enough!

  • You were definitely a good
    part of the inspiration for this post, and my not sweeping this “FAIL” under
    the rug. I have learned from you that “showing very personal experience” in
    your posts can really help many of us learn some very important pointers for “life” and business.

    Over 25 years ago when I
    started my second company I had a mega fail which almost wiped me out financially!
    Shortly thereafter I was pitching to a potential client, whose leading question
    (during the initial interview) was why they should retain me? I informed them I
    had had my own company, I had invested almost all my own money, I had done just about everything wrong personally, I
    knew how and why I did it wrong and was an ideal consultant to guide them
    around the potholes of failure (which I was very familiar with, of course) to success! I was
    retained and retained for my “failure” experience rather than my success track record!
    What is also interesting is, I would never never never have written publically about
    it at that time!

    Thank you for your
    contribution and I will certainly keep you updated as to which “opportunity” I
    take at this crossroads.

  • Thanks for sharing this, it’s always hard to accept failure but it looks like you really learned a lot in the process.

  • Yes, what makes the most sense for me next?….. I am right there at these crossroads with several opportunities at hand. I am in the space of enjoying the various options available…… stay tuned.

    Thanks for a very cogent contribution (as always!)

  • I would say we flexed from our initial strategy 3 times…..I think the final version was probably “right on” but not in the time frame to get the kind of traction we needed to move forward as “self-funded”. It’s those “assumptions” we make which if you don’t review them for error quite frequently, can keep you pursuing a “Fail” and not cutting it off when good judgment requires. Thank you so much for commenting here.

  • Caroline,

    This is a great example of how to plan and react when the plan falls. I’m looking forward to the next installment of your story!

  • Thank you for the acknowledgment. It was a very difficult post to write (I would not like to share how long it actually took!) but I am a great believer in using “real life” to teach and somehow highlighting ones own always seems to have way more impact than using someone else as an example. Great meeting all of you here.

  • Kenny Rose

    OOOOOOOOOOOOOPPPPPPPPPPPSSSSSSSSS.

    LOL 🙂  I need to check my facts. A pleasure to run into to you in the classroom too. 🙂

    Dancing on egg shells, doing the splits, 

    Lady Casudi, Please forgive me for my gender bias and inability to comprehend who wrote the post. Very gracious response.

    And don’t you dare mention me in the post about failure to comment correctly and acknowledge the greatness . 😉 

    Seriously Great Post. 

    Triple Hat Tip To You Lady. 

    Always. Kenny 

  • It gets easier and easier to accept failure, the more you learn from it and the realization that it is only a stepping stone in the journey of life.

  • Maybe I’ll take up quilting…….. you never know with me. I had a great experience yesterday hosting a landscaping design tour (ours) and added to this we hosted a quilt exhibit. What an inspiration the “enchanted quilters” are and the designs were amazing; showcased in the outdoor setting added a whole new dimension.

  • Anonymous

    I think that you capitalized on your failure.  In other words, made it work in the best way possible and then moved forward.  The recognition, analysis, and modification of the situation were key to creating your successful failure.

  • Caroline: “No plan ever survives first contact with the enemy.” Somebody or other said that. Yes, the “gray” and “black” elements of doing business in different parts of the world, the bringing of high tech solutions to often “no tech” markets, etc., are all what I’d consider “known unknowns,” to quote a former Defense Secretary. Stepping in with an acknowledgment of ambiguity in mind was a necessary mental tool.

    I think back to Pressfield’s Do The Work where he encourages us to stop and say, “What business are we in again?” a few extra times.

    That being said, you salvaged what could be salvaged and there’s a moral victory in that. Onward and upward!

  • Al Pittampalli

    Great post, Mark. Seth tells us that whomever fails most wins. I’ve always found this to be true. It really is the best teacher. But it sure isn’t fun to fall down all the time.

  • The biggest block to the recognition, analysis and modification seems always to be the “hope” it will really work out……especially if deep down you know know you have a tremendous opportunity. Our opportunity was huge …… but it was not for us and not the way we were implementing. Always a pleasure to converse with you in chatville and thank you so much for visiting BusinessGrow and commenting here.

  • IMO A  long term failure pattern should at the minimum be a balance between one step back (fail) and two steps forward (succeed) ~ what do you think? Thanks for reading and commenting.

  • Thank you so much for taking the time to comment. What is interesting is I read your “Killing Giants” book after I completed and sent this post to Mark and strongly suspect I might have modified my post had it been the other way around.

    I wonder if I would have gone ahead and done the technology partnership with a company whom I can now identify as having “Giant mentality!” when my original assumption was they were as agile as we, their start up partner in Asia. If I had gone ahead (after reading your book) I would certainly have been more aware of the “cultural” difference in the relationship and the potholes I would most certainly encounter!

    Yes, onward and upward!

  • Thank you for visiting and reading…….interesting what you say…. failing exploits your true potential. I would have said that success does that…….I have to think about it some more……… cheers.

  • Anonymous

    Caroline,

    Ah…time is an unforgiving element we all have to deal with in business. The most extraordinary part of your story is that pivotal moment when you know failure is staring at you in the face. What do you do? What do you say to yourself? In this pivotal moment is the truth in its unvarnished version. There are some people who will continue to flail because “its gotta work”, there are others who just find a hole to crawl into and there are others who say “okay, time’s up. What are my choices?”

    You and Alex were able to acknowledge you had gone as far as you could go and it didn’t work as a whole. It takes a certain confidence to face the truth and learn from it. It isn’t an easy process. Hats off to both of you for being honest and daring about accepting the failure.

    I’m eager to hear the next chapter!

  • Thank you for visiting the BusinessGrow blog and commenting. The moment of truth or point of pivot in most cases is not a total surprise.:-)

    First there is, has to be an inkling and that of course is the easiest to ignore or go into ostrich mode. That’s exactly when alert mode should take over and the analysis begin. This inkling is often the result of something quite small happening, yet when you look back at it later it looks like a significant turning point.

    Next one gets a strong indication and that’s when the decision making really needs to happen. The smaller the team the easier and faster the conclusion. I had an inkling as early as the end of November, but was still hopeful a pivoted strategy would keep us going, though via a different implementation process. The strong indication came at the end of January, and this indication (actually more than one) was just what we required to set the failing process in motion. Once the decision is made I want to do it in 24 hours… but there is almost an “art” to a smooth closure and so almost 60 days later, we had ended our technology partnership and our startup company.

    I am very grateful to Mark to be able to share my story here and reach so many of the people who encouraged and supported me.

  • Sounds like successful crash avoidance to me, Caroline. Whether the fail turns out successful is still in the future, no? Looking forward to learning the rest of the story.

  • I would have said we actually “crashed” however perhaps if picking nits based on your comment…..yes, we came to a screeching halt, turned the vehicle over to our technology partner who can determine what speed they want to run it at or whether they want to park it!  So you are saying time (the future) will only prove as to whether doing this closure “transaction” will lead to another completely different  course of action which is successful? Maybe the success will be measured in not being caught up in an endless pursuit of something that doesn’t work……  thanks Bernd for visiting BusinnesGrow and commenting.   

  • This is an amazing post, Caroline. For me, talk around start-up failure often comes across as a therapeutic device (often much needed!) that makes the author feel better about the fail, but provides little help to other entrepreneurs. Through your willingness to share specific details, this post takes the “failure is good” premise to a much higher, and beneficial, level. After all, failure only helps if it eventually leads us toward success.

  • Anonymous

    Caroline. Thanks for a great post.  You have written about it so eloquently with a step by step thought process on your journey, WOW.

    I too have written about knowing when to quit (aka fail) as has @JohnFalchetto:disqus
     (expatlifecoach).  He did it better!

    Without failure there is no growth!  I remind myself of this with our kids.  It is hard to see them struggle but know if they work things on their own, they will learn more.

    Have a great weekend!

  • I’d rather say that “FAIL” is a necessary experience than “good” or “favorable” ! Successful when you learn from it, really learn what you can use in the future or uncover or create a new opportunity as a result. I certainly hope I have given some guidelines for people, especially those in the Start Up space, to systematically review and analyze when they get an inkling that failure is a possibility! Thank you Mark so much for checking out BusinessGrow and commenting.

  • I agree one of the hardest things is to watch is someone else FAIL and not step in immediately and put things right. And doing this not because you are mean &/or unkind but instead you are staying on the sidelines because they need to have the learning experience themselves….. key is we learn so much IMO when it actually happens to us. I’ll certainly check out your Fail/Quit version ~ looking forward to another take on it.

  • You’re right about the stigma of failure Caroline. The word in itself makes me itch! Absolutely love your openness and honesty about this project.  Turning a failure into a win takes guts and fortitude as its so easy to walk away. I like the school of thought that advocates failing forward so to me this was a great example of “rising from the ashes”.  I don’t know that I’d ever bring myself to say “failure is desirable” though. I may have to guzzle a bottle of Benadryl if I do!

  • Anonymous

    Caroline, here is the link it is not all about failing but 3 tips on knowing what is right for you whether it be business, fitness, etc. knowing when to quit is one of them:  http://expatdoctormom.com/2011/05/22/p90x-life-entrepreneurship/

  • Ye, you got that right, Caroline, that is what I am saying. And you inspired a new blog post, Not Getting Started is the Fastest Fail Ever.

  • Thank you Natasha for commenting. It’s the Gurus that are calling “FAIL” favorable…… I actually call it a necessary and even an enlightening experience IF you learn from it.  Doing the same”FAIL” over and over again  (and some people do 🙂 is most unfavorable….. you don’t get a “FAIL” credential for that and are most definitely” failing back”. I really like “failing forward” and will use that……..  Cheers to Grow community week and I look forward to yours.

  • This is an excellent example of how to fail. You can do everything in your power – from planning to execution – but you cannot control external forces. Sometimes these forces prove insurmountable as they did here. It seems you failed right in knowing when to fold and how to fold gracefully – plus gained the valuable insights you indicate could turn into new business(es).

    It would not be successful if you hadn’t gleaned these learnings or arrogantly pushed forth against all odds. Determination is important but you have to know when to set ego aside and move on – as you did here.

    It also shows the importance of remaining nimble and open to change – and being able to react to change. Culture and customs are so important to account for, as are the perceptions, no matter how good your product/service, of prospective customers. Sometimes people fear the things that are actually designed to help them. Key is gaining the early adopters who can be role models for others. I’ve seen the importance of this firsthand in my work in the ERP Construction Solftware market.

  • Thanks for sharing your experience Caroline. Not enough businesses embrace the learning points from failure – from the humble debrief after a project, through reviewing the calamitous pitch to losing the big account. There is something to be gained, improved, and acted on for next time. Your piece also reminds us to consider cause and effect, something we learn as children but forget as adults, especially in business.

  • Rodney Tanner

    Thanks Caroline. I like the momentum coming out the other side. The scary thing to me was the lack of market knowledge (from your post) going into market.   

  • I say we get on that phone thing and hash out some ideas. Tag yer it.

  • Great comment, Patrick. Yes, “…but you cannot control external forces”, however when going into a space like Asia you certainly should have as many as possible identified as “potholes”! IMO you can’t really do the most comprehensive and useful “market research” in Asia without actually going in and trying. In order to speak with customers  (in our case potential telecom or distribution partners) we had to have a credible image/brand… website etc…. and we were fortunate that our technology partnership was with a company already with a strong foot hold in 40 non-Asian countries with the products we would be selling.  So in essence we had to really get going and be a “real” company to do our “market test” , and this is why setting goals with reasonable time limits was so important, otherwise we could be testing the market for ever! Also within the year from starting to ending our Asia focus there were major changes, some of which we had predicted knowing full well at the onset our window of opportunity might be limited.

  • I  both agree and disagree with you regarding prior market knowledge. Please check my comment to Patrick below about talking to real customers in order to to give us real market research and knowledge, especially in Asia. Just talking and not having a real company or real product obviously does not count:-)

    We had outstanding data on other somewhat similar technology product introductions into the same Asian countries we were targeting and this was extremely helpful when assessing localization issues, however with a rapidly evolving market what was workable a year ago may not work today. 

    We had enough market intelligence to check out the viability of our Asia focus and fortunately did not have to develop the products to test the market (advantage #1 of licensing). I might add it was a successful market test, we decided not to move ahead.

    Thanks so much Rodney for your short but thought provoking comment.

  • Rene I like the idea of doing similar “constructive” analysis for every failed project. I always start any analysis process, even on small projects that go wrong, with the “wrong assumption” path…….. most often things go off track on account of very basic wrong assumptions:-) So getting started how can we guard against making wrong assumptions? Well that’s another post!

    Yes, we learn as kids if we touch the hot stove we get burned. I have to agree that in business the results are often filed in a different filing cabinet to the actions…….. so if we can clearly keep cause and effect connected we certainly have a good opportunity to learn from our mistakes ! Successful Fails!

  • Caroline,
    My apologies for not visiting this post the day you hit the ‘interwebs’! My family and I were struck down by a nasty stomach virus…all better now! (TMI?) At any rate, I love your post for several reasons:  you share your FAIL openly and honestly with us, you pull out wonderful take-aways, you drive home the point that failure can be ‘successful’.  I agree.  I don’t think I can be successful with my business without first experiencing failure.  Having just recently experienced something along those lines (a tactical failure), I can say that I’m now fully charged and focused on how to turn it around to a success.   I have given myself a timeframe in which to ‘give it a go’ and if I still am unable to resolve my issues, will pursue a different course of action.

    Thanks for the post! Enjoyed it!

  • Not to worry Erica, I have been trying to respond since early this morning 🙂 Setting  realistic timeframes is what I think keeps us sane and NOT getting fixated on making a “FAIL” work, no matter what! And I have done that.

    I would be most interested in hearing about your personal experience of turning a FAIL into success….. skype or phone? Cheers to GROW community week and of course our fearless leader Mark:-)

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  • Leaning to fail is a lot like learning how to fall. Takes practice. 🙂

  • Anonymous

    Casudi, I am going away with real insights – thanks for sharing!

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