Last week, I read a great article published by FastCompany on the epic failure of an electric car start up called Better Place. It is the case study equivalent of a car wreck you can’t tear your eyes away from. It tells the story of a charismatic leader that “made great Kool-Aid and then drank it all himself.” Shai Agassi, the CEO of Better Place, managed to raise nearly $1 billion on promises that in retrospect are obviously ridiculous. For instance, Mr. Agassi still maintains (Better Place filed for bankruptcy in June of 2013) that an electric vehicle with 100 mile range is possible for $10,000, the least expensive version of Better Place’s vehicle was $35,000. The article caught my eye not only because of the scale of the loss, but also because I’d read about Better Place after a friend told me about the company 2-3 years ago after the CEO had done a TED Talk. I watched the TED Talk after reading the article and even with the benefit of hindsight, its a pretty good talk, its not surprising to know that people thought highly of his pitch.
Its an entertaining story that I’d highly recommend to anyone who finds themselves questioning whether or not talk is cheap. It reminded me of a comment I heard recently, “Always remember that failing does not make you a failure.” It fit well in the context of Shai because Shai’s problem was not that his company was failing, it was that he didn’t do anything about it.
Although not a goal in and of itself, failing can be a valuable component of experience. I distinguish between failing and failure based on whether or not there are lessons learned to improve your odds of success in your next endeavor. I see failing as iterative improvement, when something doesn’t work, you go back and try again incorporating the accumulated learnings from your experience. As a risk management technique, it is worthwhile to focus your efforts in ways that test the elements of your project which are most likely to fail. That way, when reality does not match up with your idea, you will find out as soon as possible and, hopefully, preserve your ability to course correct. It’s a core principle of Lean Startup and similar tech inspired methodologies.
Mr. Agassi seems to have run into trouble because he never came up for air. He refused to acknowledge the realities that were in conflict with his original conception and that led to the failure of Better Place. If you read the article, there are several points at which Shai ignored the chance to adapt plans to point Better Place in the right direction and, maybe just as fatefully, he continued to promise and make commitments to his vision as originally conceived, even after it became apparent that the path forward did not exist.
It’s a cautionary tale, but one that is relatively easy to avoid retelling. There are no guarantees that any business will be successful, but it is critical to pursue your vision with an eye towards incorporating the lessons you learn along the way.