The Failures Club
If you are afraid to fail, stop here. Don’t waste your time reading the rest of this article. Please give this article to a more ambitious friend of yours. My conversations with dozens of the richest men in their towns (RMITs) suggest strongly that the only way to succeed is to have the courage to be willing to fail, to be willing to fail publicly. Perhaps the greatest commonality of all RMITs other than their ambition addiction is their willingness to face failure and the grit to pick themselves up and to make the next step toward a better outcome.
Jim Oelschlager of Akron, who made his fortune through Oak Associates, a leading money management firm, says, “Don’t be afraid of failure. Failure is a part of life. Absolutely every successful individual has had several failures. You learn a lot from your failed experiences and you will find that generally people are very forgiving of your failures. Perhaps one of the saddest things to see is a person who approaches retirement age and regrets not having taken chances when presented with opportunities because they were afraid to fail.” Failure is not fatal, and RMITs simply are not afraid of it.
David Rubenstein, who founded and runs the Carlyle Group, says, “Hope that you fail and hope that you fail early.” This seems easy for him to say as he sits atop a multibillion-dollar fortune. Yet he believes it with every ounce of his being. Rubenstein strongly asserts, “Nobody has uninterrupted success. Everybody has failures, and those who have too charmed a life early in the first third of their life, more likely than not, will not be stars in the next third of their life or certainly the final third of life. The folks who end up being on the Forbes 400 list or winning Nobel prizes are people who did not have all the awards and all the success in the early part of their lives.”
In other words, if at first you don’t succeed, join the not-so-exclusive club alongside such members as Michael Jordan, one of the richest athletes in sports history; J. K. Rowling, one of the richest authors in history; Steve Jobs, one of the richest men that the Silicon Valley has ever produced; and such members emeriti like Thomas Edison and Abraham Lincoln. It’s a very powerful and prestigious club. Michael Jordan was cut from his high school basketball team as a sophomore. J. K. Rowling was famously rejected by more than a dozen publishers before her first Harry Potter chronicle was finally published. Steve Jobs initially couldn’t get anyone interested in his first Apple computer; he sure didn’t have that problem with his iPod. It took Thomas Edison more than a thousand tries to create his first working light bulb. Michael Jordan’s boss at Nike, and Oregon’s richest man, Phil Knight, famously said, “The trouble with America isn’t that we’re making too many mistakes — it’s that we’re making too few.” David Rubenstein, as the good political science major he was, agrees with Knight: “Just look at some of the recent presidents of the United States. Franklin Roosevelt ran for vice president in 1920 and was defeated, subsequently came down with polio, but went on to become president in 1933 and serve three terms — more than any other president in history. Harry Truman had a haberdashery that went bankrupt. Most folks thought Dwight Eisenhower’s military career was over after World War II. He was simply an executive assistant or gofer to Douglas MacArthur. John Kennedy literally had last rites given to him three times, but he overcame his physical ailments and became the youngest president in history. The same is true with virtually every successful business leader I have ever met.” All of the members of this “failures club” ultimately achieved monumental success. Success and great wealth creation demand that you refuse to be afraid of failure or what your friends and family and neighbors might think.
Fear of failure is the single greatest impediment to reaching one’s personal American dream. David Jones, the founder of Humana and Louisville, Kentucky’s RMIT, said that the best advice he has given all five of his children is, “If you go to the plate and strike out ten times, you are no worse off than a coward who never went to the plate at all. In fact, you’re way better off, because you tried.” Anchorage, Alaska’s Bob Gillam says, “Success is not so much about winning as it is repairing damage when you lose.” Like David Rubenstein, he believes “there is one great certainty in life — you will lose at some point.” It makes great sense then to not only learn from your own mistakes and failures, but to learn from the mistakes of others. No one lives long enough to make them all themselves.
Your success, then, is measured by how you handle that failure and how resilient you are. Resilience is the character trait that I most admire in Carrollton, Georgia’s RMIT, Bob Stone. He has reinvented his computer processing company, SMI, almost as many times as Madonna has reinvented her look. “We have essentially gone bankrupt three times though no one knew it,” he says. The first time he reinvented his company was to change from a service bureau that created payroll processing and accounting services for local businesses into a government outsourcing business that processed and distributed food stamps. This repositioning reaped millions in profits, until the government suddenly decided that only banks could distribute food stamp benefits via debit cards. Stone’s company was not a bank, so suddenly, the very foundation of his business was crumbling. Thanks to his son Joe’s insight, at about the same time the food stamp business was looking bleak, they morphed SMI into a company that provides systems and tracking for another branch of the government that distributes child welfare benefits to custodial parents, which today yields $40 million dollars a year. Stone’s failures were not fatal; on the contrary, they became opportunities for Stone to reinvent his business and revitalize his fortunes. He has proven that whatever forces of change come his way, he can adapt and find success in the face of those changes. Stone proves that your success is often determined by the velocity of your resilience. Failure really is your friend.
“Since childhood, most of us have been brainwashed with the maxim, if at first you don’t succeed, try, try again — well, it’s true,” says Ron Rice, the founder of Hawaiian Tropic and the richest man in Daytona Beach, Florida. It took Rice six tries to get it right. He started out his career as a teacher and a coach and though he loved both teaching and coaching, Rice laughs about it now. “I taught for eight years at seven schools and was fired six times,” he says. Clearly, he needed to work for himself, to be his own boss. No one can doubt his persistence and certainly not his resilience, but it took him eight years and six failures to realize fully what he was destined to do, what he could be most passionate about, what his perfect pitch was. In Rice’s case, that passion was for pitching suntan lotions to beautiful women. He says, “My failures taught me my greatest lessons — the most important thing I learned in life was that when I fell down, I could get back up.”
The Chinese use the same word for both opportunity and crisis — out of failure often come our most stunning successes. Roxanne Quimby points out that one of her heroes, Abraham Lincoln, arguably the most effective president in the history of the United States, had a veritable laundry list of failures: “He had a general store that went bankrupt, he was defeated in his run for the Illinois state legislature, had a nervous breakdown, was defeated for Congress, was defeated for the U.S. Senate and was defeated in his nomination for vice president, yet he persevered and became the sixteenth president of the United States.” Sid Richardson, the famous Texas oil wildcatter who created the multi-billion dollar fortune that is now the Fort Worth Bass family wealth, once said, “I’ve been broke so often that I thought it was habit-forming.” Spartanburg’s George Johnson says, “If mistakes made scar tissue, you couldn’t see me.” You can certainly see him today leading the charge on his newest hotel venture with partner Wayne Huizenga. Their OTO Development Company is building and operating a billion dollars’ worth of new hotels all across America.
Meridian, Mississippi’s Hartley Peavey, with his characteristic frankness: “Hell, I’ve had multiple failures and anyone who tells you they haven’t is a big fat liar.” He particularly remembers creating what he believed was the best drum set ever created. In order to get the high-quality sound that astounded many of the greatest drummers in American music, the design had to be unlike any other drum set. The quality was unprecedented, but so was the design. Some might say the design was downright weird; Peavey says it was “butt ugly.” The famous drummer Kenny Aronoff tried the drums and thought the sound was the best he had ever played, but he told Peavey, “They just don’t look right.”
Despite the tremendous time, effort, and investment, Peavey couldn’t sell the innovative product because the drums didn’t look like what drummers thought drums should look like. The drums were a disaster both stylistically and economically. What Peavey thought was a sure thing was a flop. He admits there have been many other innovations that have not caught the interest of the market, but in each case, he has learned a lesson that has benefited his future product introductions — failure can breed success.
Peavey is an inventor at heart and that passion for inventing new products is what has created a highly successful $300 million dollar company that is unmatched in the music business. Another of his other companies, Media Matrix, provides the sound systems for the Sydney Opera House, the Great Hall of the Republic in China, the Disney theme parks, and the U.S. House of Representatives. As Peavey and every successful scientist will agree, a failed experiment is often the grist for a future success. He says, “Winners learn from the past, and let go of it. Losers yearn for the past, and get stuck in it.”
RMITs agree with Theodore Roosevelt’s fervent belief that, “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.”
“Defeat is the prelude to every great success story,” says Frank Hickingbotham, the founder of TCBY and the RMIT of Little Rock, Arkansas. He notes, “There is no such thing as failure unless you quit, and I never quit. I had several setbacks and I tried to learn a lesson from every one of those defeats, but I never, ever quit.” For RMITs, all defeats are temporary; they are rarely down for the count, and they have a near-limitless capacity to pick themselves up, dust themselves off, and set about trying their next big idea. Hickingbotham started as a teacher and school administrator, then worked his way up the insurance sales ladder with National Investors Insurance Company. He then founded a restaurant company and two food companies before spotting the potential in frozen yogurt. There were many bumps along the way, he says, “But I never saw a closed door — there was always a crack of light peeping through.”
Resilience is sweeter
Often the unexpected outside forces are just the incentive you need to make the move to change your life. The R in RMIT should stand for resilience. Atlanta’s Bernard Marcus, the founder of Home Depot, was fired from Handy Dan, one of the original home improvement retail chains, when he was 49. He and Arthur Blank (also fired) started Home Depot and ultimately put their old employer out of business. For others it could have been sweet revenge, but not for Marcus and Blank. To the contrary, Marcus says, “I always knew that I wanted to own my own business and it took getting fired for me to do it. I said to myself, this is God’s will for this to happen to me and I’m going to take full advantage of it.” With Home Depot, one of the greatest business successes of all time, under his belt, a couple of billion dollars in his pocket, and a personal foundation that has already given away hundreds of millions of dollars, there is no need for sweet revenge. Signaling both his amazing resilience and his forward-thinking attitude, Marcus says, “I rarely think about where I came from. I think about the here and now. People often look at the Home Depot success and only see the good times, the great result. They don’t see all the hard times we had. We had some very treacherous years and it took a tremendous amount of energy, dedication, and determination to make it work. It’s like childbirth; it’s difficult labor, but the gift that comes from that hard work causes one to forget the pain of the time.”
Charlotte, North Carolina’s Bruton Smith learned about failure and bankruptcy early in his career, only two years after starting Charlotte Motor Speedway. Because he didn’t have the capital to save the business, he was forced to place his company under Chapter 10 bankruptcy protection. Rather than being the big boss he so enjoyed, he was soon working for a trustee who was put in place by the bankruptcy court to restructure the company. Many people in this situation would have been depressed, daunted, and demoralized. Not Smith, he proudly asserts. “I became the trustee’s best friend. He called me all the time, because I knew the business; he didn’t. I worked for him for a year — for free — because I was determined to reorganize the business and regain control. We ultimately paid off all the creditors and here we are today a thriving company.” Smith is now a billionaire and Charlotte’s RMIT.
Notwithstanding two exceptions, Jonathan Nelson of Providence, Rhode Island, and Phil Ruffin of Wichita, every RMIT offered that at some point in their careers, they had failures. Most have “enjoyed” multiple failures. These stories are not isolated examples of a few remarkable RMITs rising above adversity. Business catastrophes are universal. The fact is that 70 percent of all new businesses fail in their first year. RMITs are not been immune to these setbacks.
Dan Duncan, who is perhaps the quietest billionaire in America, certainly in Houston — a town where, as the saying goes, money is shown as much as it is grown — confidently articulates, “I’m never satisfied! I always know that I can do a better job, I can live a better life, I can treat people better than I have, and I can and must always work to improve myself.” Archie “Red” Emmerson remembers that his father was a hard worker, but he didn’t have the ambition that young Emmerson possessed. “My dad was satisfied to just make a living. Not me, I have never been totally satisfied.” Stay paranoid — it keeps you on your toes, it keeps you pushing for that next rung on the ladder of success. Never fear failure, it is your friend. Remember, no pain, no progress.