Risk-taking is part of everyone’s life – but even more so when it comes to the life of an entrepreneur. Not only do they have to turn their back on job security, but they can wave bye bye to their social life, being able to plan holidays and sometimes their relationships.
In those high-pressured moments, mistakes can be made, potentially costing their business a fortune.
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But rest easy, even some of the most successful tech entrepreneurs have made billion-dollar mistakes. It’s just a matter of whether these mistakes make you turn your back on running a business or inspire you to dust yourself down and climb onboard for another bumpy ride.
Without further ado, below are five of the most important lessons you can learn from their mistakes:
Jeffrey Preston “Jeff” Bezos
Lesson 1: Leave the details to your team
Remember the Amazon Fire Phone tragedy last year?
The phone was initially priced at $199 on contract in July 2014 and due to disappointing revenue, the price was cut to a mere 99 cents only after three months after its debut. This downturn sent the company to the worst quarterly net loss in more than a decade.
So what went wrong?
From the very beginning, Bezos had this vision: “Let’s wow customers with something big and distinctive.” To realize that vision, Bezos decided that his next move should revolve around mobile phones .
Hindered by the already fierce competition in the mobile market, Bezos realized that there should be something distinctive about the Amazon Fire Phone that would answer the question: ‘Why would one buy this instead of another flagship smartphone?’ And that distinctive feature was Dynamic Perspective – the one feature that many attribute to be a symbol of Amazon Fire’s epic failure.
Using four front-facing sensors, the feature responds to how you hold, view and move your phone and adjusts the 3D effect on the screen accordingly.
Bezos was so actively involved in the development of the Fire phone that every small decision needed to go through him. He was so in control of creating the 3D experience that the designers no longer felt they were making it for their customers, they were making it for Bezos.
A former head of engineering who spent years on Dynamic Perspective’s development told Fast Company, “In meetings, all Jeff talked about was ‘3D, 3D, 3D!’ He had this childlike excitement about the feature and no one could understand why.”
The engineer explained how they invested a huge amount of money in the feature, yet thought there was no value in it, as far as customers were concerned.
The result? You can probably show off to your friend how cool the 3D effect is, but there is really not much to add in terms of utilitarian value and practicality.
Steven Paul “Steve” Jobs
Lesson 2: Keep innovating no matter how many times you failed
The Lisa, the Newton, Apple III, those are just some of Apple’s product failures. Let’s admit it, Steve Jobs was a visionary when it came to creativity and technology. He had a brilliant understanding on how technology would evolve in the future, yet he seemed to constantly be a bit early to the party.
But when you gamble like he did, you strengthen your knowledge of where the perfect line between innovation and familiarity lies faster than by making steady, incremental progress. This was proven when Jobs hit gold with the iMac in 1998, effectively ended the Walkman era with the iPod and almost killed BlackBerry by creating a phone that didn’t need a keyboard with the iPhone.
People easily forget your mistakes when you have great success and offer them something they didn’t realize they needed.
Lesson 3: Sometimes passion for your company beats any resumé
This doubt led Jobs to Pepsi-Cola’s then President, John Scully. With Jobs’ legendary, challenging pitch, “Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?”, he convinced Scully to be the CEO of Apple.
The strong wills, different management styles and opposing visions for Apple that ensued as a result led to a heated argument where Jobs lost the board’s support and was eventually fired by Scully.
Fortunately for Jobs, this decision was probably the biggest mistake that the board ever made. After Jobs left the company, there was a temporary lull in innovation until he was rehired and introduced Apple’s next big innovation, the iMac.
The lesson? Sometimes the right person for the job isn’t someone with the best CV.
William Henry “Bill” Gates III
Lesson 4: Take your competitors seriously, no matter how weak they seem
It all started as a kind gesture from Microsoft’s side to help Apple get back on its feet.
In 1997, the year after Apple lost Scully and was led astray by successors Michael Spindler and Gil Amelio, Apple’s stock price hit a 12-year low. Jobs was rehired and he introduced a new partnership with Microsoft, whereby the latter invested $150 million to buy Apple’s stock at the current price.
One possible reason why Gates did this was to get both the US government and open-source crowd to think positively about Microsoft.
Did Gates carefully consider the downside of his decision? In his mind, he thought the best scenario would be for Apple to overcome its small slump and become just a bit more competitive, and the worst case would be that Apple still failed and that Microsoft would get back its investment in PR for helping out a competitor.
Boy he was wrong. Jobs fiercely put his all into getting Apple back on its feet, and later on launched iMac. A huge innovation that helped make Apple profitable again and, of course, more competitive than Gates had thought possible.
Lesson 5: Don’t underestimate your cofounders
Jack Ma, the seventh richest person in tech with a net worth of $23.2 billion, is the founder of the Alibaba Group, a giant Chinese C2C, B2C and B2B e-commerce platform.
He regretted the mistake he made in 2001, when he told the people he embarked on his entrepreneurial journey with that the highest position they could get to was a managerial level. The president and senior executive positions would be filled by outside talent.
Years passed and the outside people hired for the higher positions decided to quit the company. While at the same time, the people he had no faith in managed to get to the senior positions.
Ma learnt from his mistakes and said, “I believe in two principles: Your attitude is more important than your capabilities. Similarly, your decisions are more important than your capabilities!”
The message is clear: When you have people that have good attitudes and are a perfect fit with the company’s vision, you take them in and nurture them. Find the right people, and not the ‘best.’
Learn more about how to avoid these mistakes
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