You are currently browsing the daily archive for August 20, 2014.

How Must Entrepreneurs Treat Failure?

A Practical Solution

By Shlomo  Maital   

    failure

  Last evening, I spoke to a group of Brazilian entrepreneurs, here in Sao Paulo, at an accelerator, Startup Farm, run very well by Alan Leite.  In the latest round, over 130 projects have been through Alan’s capable hands.  

   In my brief talk, I tried to practice what I preach, and listened carefully to precisely which messages I brought resonated.  The key one, by far?  About failure.  Entrepreneurship is less about success than about failure, how you perceive it, how you relate it, and how society relates to it.  There are cultures where failure is treated as a personal crime; those cultures will never ever have entrepreneurs.

    My wife Sharona, a psychologist, listened to my talk and gave me valuable feedback afterward. She reminded me of work by Stanford Psychology Professor Carol Dweck, who has done pioneering work on ‘mindset’.   

  Here is a brief summary, in the context of startup failure.

   Mindset is a mental attitude that determines how you respond to situations. There are two types of mindsets. One is a fixed mindset, which assumes that intelligence is a fixed trait, and that all our qualities and capabilities are fixed, constant and constrained. The second is a growth mindset, which assumes that intelligence (and other capabilities) are qualities that change, grow and develop, especially when we work hard at it.  Why don’t we see unmotivated babies? Dweck asks. Because when babies learn to walk, stumbling is not failure, it is a vital step on the road to success…and because you have to learn to walk, you have to stumble and fall luntil you do.   Absolutely true of entrepreneurs, too.

   Entrepreneurs should have a growth mindset.  And they should use it to shape their perception of failure. 

     Failure can be regarded as personal:   I personally have failed. Or worse, I myself AM a failure.  My startup failed; I am a failure.

  1. Wrong. Wrong.

     Failure can be regarded as a learning experience; my startup failed, but I am a brave and courageous entrepreneur, because I attempted something very challenging, and did not succeed, but learned a great deal, and eventually I WILL succeed to change the world. 

      This is how entrepreneurs, and all of society around them, should, can and MUST interpret failure.  It is part of a growth mindset; failure is a step toward success.   Thomas Edison actually said that, when he tried 10,000 experiments to invent the filament of a light bulb, and each failure brought him closer to the final successful answer.

     Here is how Carol Dweck advises us to develop a growth mindset: 1.            Learn learn learn  2.   Realize hard work is key   3.  Face setbacks.     Focus on effort, struggle, persistence despite setbacks. Choose difficult tasks. Focus on strategies. Reflect on different strategies that work or don’t work. Focus on learning and improving. Seek challenges. Work hard.

    Thank you Professor Dweck!

 

Advertisements

China: Big Nation, Big Worries

By Shlomo  Maital    

China debt

   A new survey shows that half of Americans believe the recession is still alive and well,  despite the booming stock market.  And close analysis shows that the world’s second biggest economy, China, also has big worries.  So when the world’s two largest economies are struggling, global managers need to be on their toes, to daily track events and manage risk. 

    My friend Clyde Prestowitz, formerly President Reagan’s trade advisor and now head of Economic Strategy, has provided us with some quality insights into China’s current predicament. “This is the start of a new ball game with China,”  Clyde warns.    Here is a summary:

  • Xi Jinping’s two major goals are: 1)Restore the power of the center and ensure the sustainability of the Party’s rule. 2) Restore China to its historical position of prominence of the world stage.  This marks a departure from the line of Deng Xiaoping who urged : “observe calmly, secure our position, cope with affairs calmly, hide our capacities, bide our time, maintain a low profile, and never claim leadership.”   ●  Two schools of thought now contend in Beijing – one advocating the low profile approach, the other saying that this low profile has encouraged Japan and other Asian countries to push their claims in the North and South China Sea, and arguing that it is now time to show a more assertive posture. ● Xi seems clearly to be leaning toward this latter approach: What he is now basically saying to the US is rather something like:” We still have to catch up with you in many domains but from now on we intend to deal with you on an equal footing basis.  …While Xi Jinping is the most powerful Chinese leader since Mao, is his grip on power already beyond the risk of a backlash or not and how far are we from a fully stabilized power landscape in Beijing?   ● China’s high nominal GDP growth rate is not necessarily a good sign. It arises from an eventually unsustainable system that has already taken China’s total debt to about 250 percent of GDP while continuing on a path to much higher levels. Much of this debt has been contracted in the course of building enormous excess capacity in the real estate, manufacturing, and infra-structure sectors. Since excess capacity does not generate income for the paying off of debt, the debt load will eventually be shifted to some sector capable of paying.  ● Regardless of how it is paid, a shift in the structure and direction of the economy would entail at least a temporary slow-down of the Chinese economic growth rate to something like 3-6 5 GDP growth. Such a reduced growth rate would actually be a positive sign. However, because it would be seen negatively by many, and because it would be costly to vested interests, there will be enormous opposition to taking the steps necessary to achieve the temporarily slower growth rate.  ● This is obviously a crucial moment in China, during which a number of shifts are occurring, with major implications for the country itself as well as for the global economic and geopolitical balance. ●  While trying to decipher the developments it is important for decision-makers and China watchers to think outside the usual obsolete templates of “moderates” and “hard-liners” “reformists” and “conservatives” which serve only to blur the picture and distort judgment. The present reality in Beijing is too complex to be encapsulated in simplistic labels.
  • This is the start of a new ball game in dealing with China. It will keep us on our toes for years to come.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
August 2014
M T W T F S S
« Jul   Sep »
 123
45678910
11121314151617
18192021222324
25262728293031

Pages

Archives

Advertisements