A river of failure ran unchecked yesterday through a hotel ballroom in San Francisco. Maxed out credit cards and a mountain of debt? Check. Laid off employees, lawsuits and bitterness? Check. Months or years of shame and misery? Double check.
This was FailCon, an annual gathering of the survivors and the shell-shocked who have a common bond: they started at least one technology-based venture and met failure head-on along the way. FailCon is the unique brainchild of Bay Area event organizers Cass Phillipps and Diane Loviglio. It is now in its third year and seems to be growing in popularity. Yesterday’s conference at the Hotel Kabuki in San Francisco was packed throughout the day and a spin-off in France earlier this year attracted over 600 people.
One of the key messages from FailCon is that even the best and the brightest in Silicon Valley have failed. This was powerfully reinforced by two notable speakers on the conference agenda: Vinod Khosla and Joe Gebbia.
Khosla is widely known as one of the premier venture capitalists in the country. A founder of Sun Microsystems and a past partner at the powerhouse VC firm Kleiner Perkins, Khosla readily admits his own failures with companies like Dynabook and Go. “Most people who fail are better at doing startups than those who have not failed, “ Khosla told the group.
Khosla also talked about his willingness to take risks at a young age coming out of Stanford Business School in the 1980’s. “I had nothing to lose but my student loans,” he pointed out. Khosla admitted a bias towards younger entrepreneurs today, claiming that “people fundamentally stop trying new things after the age of 30. After 45, people basically die.”
The longtime venture capitalist also scoffed at entrepreneurs who rely on pundits for advice, labeling experts as no better than “dart throwing monkeys.” Khosla’s closing advice for those seeking to start their own tech companies was basically “don’t give up…keep examining your assumptions…and give yourself enough time to get lucky.”
One young startup exec who seems to have followed Khosla’s advice is Joe Gebbia, the co-founder of Airbnb. His website, a play on the concept of “air mattress” and “bed & breakfast,” has emerged as one of the hottest in the past year. It’s for people to find places to stay at local homes in big cities where hotels may be booked or the prices are astronomical.
But the path to success for Airbnb was a rocky one indeed. “We got laughed out of a lot of law firm conference rooms,” said Gebbia. “Every investor passed on the chance to fund us.” Things got so bad that he and his partner resorted to selling repackaged collectible cereal during the 2008 Presidental campaign (“Obama O’s” and “Cap’n McCains”) just to pay their San Francisco rent.
After the campaign season, Airbnb entered a period common to many startups that Gebbia referred to as the “trough of sorrow.” For nearly 18 months the site garnered little press and attracted few users. “We tried to solve our problems from behind a computer screen,” recalled Gebbia. “That was a fail.”
So he and his partner hit the road, visiting their users and taking upscale pictures of their rooms which resulted in a much better looking website and a spike in interest. They also finally landed an investor and today are in 16,000 cities and almost 200 countries around the world. Not bad for two guys who started their business with an air mattress in their cramped apartment.
“You have to be incredibly passionate about what you are doing,” Gebbia told the group. And not afraid of failure either.