This article was taken from the May 2011 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online. "Twitter itself was a bit of a side project. You could say it was a mistake that worked out very well for us."
So begins Biz Stone's masterclass to MBA students at the Said Business School in Oxford. It's a dark Monday afternoon in November, and, as part of the annual Silicon Valley Comes to Oxford programme, and alongside other accomplished founders such as LinkedIn's Reid Hoffman, mydeco's Brent Hoberman and Plink's Mark Cummins, the Twitter creative director is inspiring the audience by openly admitting to having failed. "It turns out other people had been thinking of this. It's called podcasting, but we thought we were geniuses," Stone says in a self-mocking tone. "We worked on it for about a year but we realised something that was a bad sign. We didn't like podcasting. We didn't listen to podcasts and we didn't want to make podcasts."
Then fate, or rather Steve Jobs, dealt a blow. Apple made podcasts available directly from iTunes. "We were like, 'Well, that's a good place for it. Probably a better place than some website with a pink logo.'"
Stone and cofounder Evan Williams used some Google logic: everybody take some time and develop something you want to see in the world. "I had become very close friends with one of the engineers at Odeo called Jack Dorsey," continues Stone. "Jack had a long history in writing software for dispatch. For bicycle couriers and ambulances and these sorts of things...And he knew that I had all these years of experience at building social networking/blogging systems that allow people to express themselves and communicate. We started talking."
Then building. A prototype for what would become Twitter was born within two weeks. "We showed it off to the rest of our colleagues at Odeo. They weren't that impressed. They were saying,
'So that's all it does? You send a message and it goes out to other people and if they want it, they can get it?' And we were saying,
'Yeah!' They said, 'Can't you add video or something and make it more complicated?' One person called us 'the Seinfeld of the internet -- it's a website about nothing.' I thought, 'I love
Seinfeld.' We put that on our front page as a testimonial."
Stone says he realised they were on to something while ripping up the carpeting in his new house during a heatwave. "I'm sweating, my back is killing me, I'm hunched over and my phone buzzes in my pocket. It's Evan. It's a tweet. It says: 'Sipping Pinot Noir after a massage in Napa Valley'. I thought, 'Great.' I actually laughed out loud. "I thought, 'This is it. I'm emotionally invested in the product I'm building.' This is what was missing from Odeo. Odeo demoed so well. It was so easy to raise capital because everyone saw it as this great idea that other people would use, but Twitter, even in this prototype phase, was something that was making me giggle and making me realise I definitely want to keep working on this."
As Stone relates this story, another successful American technology entrepreneur is sharing his definition of the word "entrepreneur" in a classroom just a few steps down the corridor. "You throw yourself off a cliff and you assemble an airplane on the way down," says LinkedIn founder Reid Hoffman. "If you're not the kind of person who has a very fast learning curve under pressure, then being a founder is hard. Because usually there are multiple ways to die and they get thrown at you a lot."
Fail fast. That mantra, in its many guises, is an accepted truism in Silicon Valley. Time is short. Money is dear.
Manifest that destiny, or move aside. In San Francisco, failure evangelism has progressed to the point of having its own dedicated annual conference -- FailCon. "The reason failure is important in a place like Silicon Valley is that most startup ideas that people have are dead wrong," says Eric Ries, a serial entrepreneur who has developed a methodology called The Lean Startup to guide young businesses. "And it's not that they're not sufficiently thought through or the people who have them aren't smart. It's simply that the world we live in is so complicated and innovation is challenging."
But is a fear of failure holding back European entrepreneurs? Is the persistent social stigma -- not to mention bankruptcy law -- discouraging European entrepreneurs from taking the big risks that result in building worldclass disruptive businesses?
Some in Europe, including Index investor Saul Klein, have long been calling for Europe to follow the US example of embracing failure -- or at least forgiving it. "Failure or bankruptcy is not culturally accepted in Europe, but if we want to encourage the abundance of talent to start and join early-stage companies trying to change the world, we need to accept there will be many, many more flops than hits," Klein wrote in a 2007 blog post, which laid the groundwork for the formation of the tech incubator Seedcamp. "We need to support failure and encourage people to take the risks you need to think and succeed big." Fast-forward four years and plenty more European voices are calling for Europe to embrace the constructive value of failure.
Bebo cofounder Michael Birch, a Londoner now in San Francisco, has spoken publicly about how his "overnight success" with Bebo (the social network sold to AOL for $850 million in 2008) was a long time in the making. "I think it's important that people have realistic expectations and understanding about how the vast majority of people succeed," he says. "You always hear about the Facebook story, or about the student who suddenly created a huge successful company. That's the total exception to the rule. "If people understand other people's experiences and what they went through to achieve what they did, then the perception of them, should they try something and fail, will not be as negative as it currently is in the UK. Particularly in the UK, if you do something and it doesn't work out, it's more likely that your friends will say, 'I told you so,' rather than, 'You must have learned a lot, I bet you're going to have another go at that.' Whereas, in America, no one would expect you to actually quit if you tried building a business and it didn't work. It's sort of expected you'd be having another go. I guess there's a greater understanding that that's part of that journey."
Finnish-born entrepreneur Mårten Mickos tells a similar story.
Now based in California, he served as CEO of the open-source database company MySQL for seven years, including when it was sold for $1 billion to Sun Microsystems in 2008. "It's always dangerous to make generalisations, but in the US, in the San Francisco Bay area, there is a much higher tolerance of failure. Failure isn't seen as a fatal event but rather as a stepping stone or a learning moment for going on to whatever you do next. In Europe, failure isn't accepted. People think if someone fails, it means the person is bad."
Mickos says he had personal experience of this after running a technology company that failed. "When I was in Finland we launched a dotcom company that did mobile betting solutions for various sports including the English Premier League. You could say it was a spectacular failure because it went bankrupt before producing a single dollar or euro of revenue. At the same time, you could say it was a very useful experiment because it all happened so quickly.
We didn't spend years struggling with something. We did everything we could. We said, 'Go big or go home.' It turned out we couldn't get it to work, but at least it didn't take more than 18 months to come to that point. When the company went bankrupt, I can remember many people thought that I was a failure, and they pitied me and thought that I wasn't capable of running a business. But still I thought that Iwas-- it was just that I had failed in that specific one."
Mickos argues that Scandinavia's famously efficient culture is partly to blame for curtailing bold ideas: "It's a very solid society but the negative side of that is that it's not so easy to be an entrepreneur and go out to do something that hasn't been done before, or to build something bigger than before."
Which makes the example of Morten Lund all the more exceptional. "I was super-wealthy when I was 26," says Lund, now 38, a Copenhagen-based entrepreneur and early investor in Skype, ZYB and NeoIdeo. "It was ten years of eating in the best restaurants, investing in crazy shit. We sold our agency, our little advertising company [NeoIdeo]. Then I sold a little company here and there. Suddenly Skype came out. I was invited first class to the whole world. Everyone wanted to listen to my bullshit."
Then he made an ill-advised investment in the heavily indebted Danish newspaper Nyhedsavisen. This resulted in his personal bankruptcy in 2009. As he describes it, he "lost everything. I stood up publicly and said, 'I fucked up. So what?' I think there's a new era coming. We're getting urbanised and adopting American
[principles] and we have to help people who fail because businesses fail. Nine out of ten will fail." Lund is no longer bankrupt after arranging to repay ten per cent of investors' money. So he is back in startup mode.
Mickos and fellow serial investor Stefan Glaenzer are among those backing one of Lund's new ventures, called Tradeshift, which aims to reinvent electronic invoicing. "They wouldn't go in (a) if it was small, or (b) if it was a Ponzi scheme. That's an extreme validation," Lund says. A few more examples like this, and people may start talking about those crazy, risk-taking Scandinavians and their German accomplices.
Midday Saturday at the Louvre in Paris. There is the usual throng massed in front of the world's most famous painting. The signs warning that photographs are not permitted are being roundly ignored. Blurry images of the Mona Lisa will undoubtedly be hitting
Facebook, Flickr and Twitter feeds in the near future, alongside brief accounts of personal witness. But Gilles Babinet would be more interested in seeing Leonardo da Vinci as one of the art world's great failures -- a Renaissance man, for sure, but one who drew up designs for many ideas that never took flight.
At a café outside the main galleries, the 43-year-old serial entrepreneur clicks through a SlideShare presentation containing a list of other impressive failures. "This guy couldn't talk until he was four. He had a small job at a patent office. He was Albert Einstein," he says. He scrolls on through the slides. "These guys were turned down by four record labels. They were once told there was no future for their sound. They were The Beatles."
Babinet is a trailblazer in many ways. A high-school dropout once judged to be of below-average intelligence, he propelled his once struggling Musiwave mobile music startup to a $140 million exit in 2006 with the help of the "hi-fi ringtone" (drawn from the master recording of a song); inventing MXP4 technology that allows listeners to "play" with music tracks; and looking to disrupt the focus-group industry with Eyeka's cocreative insight model, which offers prizes to the online community to help to advise brands on potential strategies.
However, he has just broken down another perhaps more significant barrier. He was the premier speaker at a "mini-FailCon" event in Paris, which set the stage for the first European FailCon, planned for the same city in September. Clicking through the slides on his MacBook Air, he translates his main points: Your mindset is your first partner;
Being free from fear is essential for facilitating alternative thinking; Failure is learning.
The optimistic sentiment of his presentation jars with his impressions of the current mood in France. "Here you have a lot of people who are very frustrated. Who don't know what they should do in life. You know, every week I meet two or three of these people. They come to me and say, 'I have a certain degree, this career, so what should I do?' I feel that these people are kind of lost. It's a lot about fear." He blames the phenomenon of "la pensée unique", or narrow thinking, whereby people feel the need to conform to a social consensus.
It might seem a bit cheeky to press a Parisian on the relative advantages of American culture while sitting practically on the doorstep of the Louvre, but Babinet is unfazed: "The main thing we should learn from the US is to break barriers. To be free thinkers."
Asked whether he thinks he can truly have an impact on the French national mood, his smile widens with a hint of mischief. "Yes. If you don't try, you never know," he says, as the coffee cups are whisked away. "I want to."
This article was originally published by WIRED UK
