Unlearn and Relearn

In my first startup, at the beginning we were offering software you could run on your own premisses, paying us a licence. It took quite an effort to integrate, and despite admiration from experts  in our field, we didn’t have much commercial success. Major clients were interested but they were not buying.

Our learning was that we needed to simplify the integration — offer to our clients an easy way in and an easy way out. The Software as a Service model was gaining ground and we changed our product in that direction, offering a really easy-to-integrate script. That got us a few very small clients. Selling was hard — for every client we had to do A/B testing and prove that we could in fact generate value. Until one day when Jonathan, our sales intern, reported that he had a productive meeting with the largest imaginable French client. He was persuaded that they wanted to work with us. I didn’t believe him and I attributed his enthusiasm to his lack of experience. So instead of going there myself, I sent my CMO to the next meeting. They confirmed their interest, but this time they insisted on seeing me. They actually came to my office to tell me that they didn’t want our easy-to-integrate product, and that they were willing to give us a budget 25 times bigger than what our solution costed so that we can embed our technology deep in their websites and applications. They didn’t want easy-in/easy-out. They wanted to depend on us heavily, but make sure to take full advantage of the new possibilities our technology could deliver.

It was an offer one couldn’t refuse. We changed our offer back again and started offering to others what this large client wanted. And it worked. Actually, we discovered, that in our domain — Travel — Software as a Service model was not very common, and that large companies did not have strong engineering teams but preferred to depend on external vendors who delivered all the internet selling machinery. That’s why they didn’t care about our SaaS ad-on, but cared about us as a software vendor who had more advanced technology and they wanted to depend on us rather than depend on legacy software vendors.

This learning was counter-intuitive and even paradoxical in a world that praised the SaaS model, but it is what took us where we wanted to get.

Only the paradox comes anywhere near to comprehending the fullness of life. —Carl Jung

I love paradoxes, so here is what I learned from this one. We still live in a culture that does not forgive failure. And failure is a necessary step on the road to innovation, progress, success — basically everything we want.

That’s why reframing failure as, not necessarily a success, but as something useful, is the binding element of the startup culture. The first thing you learn when you get curious about srartups is how failure is an opportunity to learn. There are quotes from Thomas Edison, Albert Einstein and Henry Ford that reaffirm it. There is also serious research confirming that faliure is necessary for any learning.

However, as you can see from my story, what I learned from initial failures to sell did not bring me where I wanted to be. It is only when I succeeded that I realized how it was done.

The brain is very good at learning from bad experiences, yet very, very bad at learning from good eperiences. Neuroprocessing is privileged for negative stimuli. - Rick Hanson, psychologist

It seems that we are hardwired for learning from faliure, but it is in learning from success that the greater rewards await. Equally essential to the ability to learn from failure, is the ability to unlearn and learn again.

In my case, when clients didn’t buy our product, they gave the following reasons: difficult to integrate, difficult to prove the value your product brings, dependence (difficult to replace your product if we’re unhappy).

When we improved the product to fix all those issues, the clients who bought our product had completely different reasons motivating their decision: offer more modern and advanced experiences to users.

The reasons for “yes” are not the opposite of reasons for “no”. “Yes” is not the absence of “no”. So, I find it very useful to be aware of the limits of learning from failure.

I found the same to be true with investors. The sets of reasons why some investors said “no” to me, and why others said “yes” are totally disjoint, and have not a single component in common.

Main reasons why investors said no to me (in order of frequency):

  • They are not actually actively investing
  • The project is too early with regards to revenue/traction
  • Geography — the project is in a country where they don’t invest
  • Competitive space — They know or have invested in a similar company that struggles to grow
  • The project is too technical — They don’t understand the technology behind it
  • Fear of slow growth — The numbers don’t add up for them to believe it can grow exponentially

Main reasons why investors said yes to me:

  • The project fits their pre-existing investment thesis
  • They know another investor who invests in the project
  • They know one of the founders or someone who knows them

These are the reasons I actually observed through hundreds of investor pitches. As you can see, the two sets of reasons are fully disjoint. So, rushing to change your pitchdeck after every “no”, does not make much sense.

Often the questions “Why I didn’t get what I want?” and “How can I get what I want?” are not directly related.

Learning from failure is not straightforward. It requires flexibility to challenge learning, unlearn and learn again. It requires patience with failures that don’t present an immediate learning opportunity, and it requires putting everting in the perspective of what you’re trying to achieve.

Normalizing the relativity of learning

Learning is hard. And it’s rewarding. Scientists say that we have an evolutionary drive to fill the gaps in our knowledge. When we fill a gap in our knowledge our body produces dopamine. The same thing happens when we eat sweets or have sex.

No wonder, when we learn something, we want it to last forever. We want the knowledge to be the strong ground on which to build our future experience.

The relativity of what we “know” is just too uncomfortable. Almost as unconformable as the relativity of spacetime. Yet, the reality is that we go through life, through situations and we learn. We adopt beliefs that seem to serve us well. We call them truth, knowledge, observations, facts. Most of them are nowhere near scientifically proven facts. They serve us for a while so we let ourselfs hold on to them as beliefs. It’s difficult to accept that we might need to challenge them, unlearn and learn again without it looking like a self-betrayal.

In order to get myself to challenge my learnings and learn again, I find the following questions to be useful:

  • What are the beliefs that create friction between me and my surrounding, or between me and what I’m trying to achieve?
  • Where do those beliefs come from?
  • Do they still serve me now?
  • What is blocking my view to the new knowledge I could acquire?

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