One of my coaching clients is Dan Levitan, managing partner of the venture capital firm Maveron. Dan is different that most of my coaching clients who are mostly leaders of big corporations. I’ve learned a lot from coaching Dan, including the importance of taking risks.
Many of us have been brought up to never fail. We are taught to believe that failure is bad! One thing that I love about what Dan does is he is in a business in which most investments fail. Some are big winners of course, but some fail.
In a recent interview, I asked Dan how he deals with the high-risk factor of the business he’s in. Below is an excerpt from our talk.
Marshall: One thing that I love about what you are do as a venture capitalist is you grapple with the fact that most investments fail. How do you deal with this fact?
Dan: Well, Marshall, unbeknownst to me for a long time, I’ve lived two lives.
My first life was as an East Coast investment banker-oriented life. Exactly as you said, in that life, taking risks and failing were considered serious negatives. And, then about 18 years ago, I moved out to Seattle. Now I spend most of my time between Seattle and San Francisco helping early state consumer-focused companies and entrepreneurs grow. I help them go from obscurity to ubiquity.
And, although many of those attempts don’t work, the success and the learnings from the failures, have energized me to persist, learn, and keep trying. At the end of the day, I don’t believe anything great was every accomplished without some significant risk being taken.
Marshall: This is a very important point. It’s not like we are going to spend our whole lives taking massive risks. On the other hand, as we journey through life, there are times to take risks. There are times to recognize potential opportunity and make a bet, knowing that if it comes in you’ll win big and if you lose, you lose. Be prepared for the loss. Be willing to go for it!
Dan: In 1994 I was talking to my now friend and partner at Maveron, Howard Schultz. We were different. I had gone to fancy schools, was working very hard as an investment banker. Howard was the CEO of a small company that had just gone public with 150 stores, called Starbucks Coffee Company
I said to Howard, “You’re having all the fun! I’m working my butt off and not having a good time. Why is that?”
Howard said something to me that I will never forget. He said, “I don’t think you’ve put yourself in a position to win.” I thought about this. What did he mean by that. He meant that I needed to define what winning is for me. And then I needed to be in a job that could put me in a position to win.
Then Howard said, “I didn’t know that Starbucks was going to work. But I did know that if it did work, I would feel as if I had won. And that has changed the way I think about helping guide people who come to me about careers. Ask yourself: What is winning for you and how do you put yourself in a position to win? And if you really are convinced what winning is, you should be willing to take the risk to win.”
Marshall: I love it! Put yourself in a position to win, be willing to take a risk, and realize that you might fail.
Dan: Right, and you’re going to learn from that.