The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “What must every entrepreneur know about startup success?” is written by David Steinberg, co-founder and CEO of Zeta Global.
As a founder of several companies over the past 25-plus years, I’ve had the opportunity to experience both success and failure. And I’ve gained an appreciation for how the latter can play an important role in building toward greater achievements down the line.
My most significant experience with failure came at my previous venture, InPhonic. We grew extremely fast—too fast—and took a heavy hit when the credit markets dried up in 2007. While painful, the experience taught me several lessons: the need to balance growth with sustainable business practices; that the people who got you to where you are aren’t necessarily those who can take you to the next level; and that being the smartest guy in the room at all times doesn’t lead to an organizational structure that scales.
I incorporated all of these when developing the business plan for my next venture, Zeta Global. With Zeta, we’ve aimed to build a business with a high percentage of recurring revenues by investing in an innovative technology platform.
Previous setbacks have also taught me the need to be flexible and adapt to a changing marketplace. At InPhonic, we focused on a core business model and market. With Zeta, we’ve focused on a set of core assets and capabilities. This has enabled us to execute what my co-founder John Sculley calls the greatest pivot he’s ever witnessed—from focusing predominantly on the education sector to expanding to consumer brands, financial services, and travel and insurance. It was key for us to not have all of our eggs in one basket.
Over the past 18 months, we have invested heavily in companies with differentiated technology and great customers to position us for faster, more sustainable growth. My experience at Zeta has taught me that there’s no such thing as a finish line. Entrepreneurs who start with an exit strategy are usually the ones exiting the company rather than finding a deep-pocketed buyer. If you’ve built a sustainable business, the exit will find you.
It’s important for entrepreneurs to be self-aware when it comes to learning from failure. It’s valuable to step back and assess your own shortcomings that may impede your ability to lead a business to the next level. In my own experience, I’ve overcome the need to micromanage high-level employees who would probably perform better without my constant oversight. I’ve learned to better trust my team and hand off day-to-day management decisions while making sure we hire candidates who are not just well-qualified for roles being filled, but who show the underlying characteristics—brains, aptitude for learning, and a strong motor—that will make them successful in any role.
Everyone has blind spots, and hindsight really is 20/20. Because of this, failure—though never ideal—offers the unique opportunity to learn and grow like no other experience can. Whether you face a small bump in the road for your business or lose it completely and find yourself back at the drawing board, a failure provides a valuable opportunity to improve yourself as a leader and an operator. Just think: If the inexperienced you of yesterday was able to launch a business, the you of today, wiser through lessons learned, should be able to take it to even greater heights.