Failures – exposed, reflected upon, considered

Work brings a sense of content and fulfillment, or so claims the traditional wisdom. Those who have work seem happy or satisfied or both. Those who are unemployed usually have an air of depression, despair, and one can always tell there is something “missing” about them. But there also those who work but, besides financial and other inherent benefits of having a job, do not get satisfaction.  As one such person confessed (back in November 2007) – he knew full well that there are many who starve and die every day – he has a work but he considers himself a failure at work

…which is not to say that I can’t do my job – I’m actually quite good at it. But work, as a lifestyle, eventually wears me down. In the past I have started out at each new job with optimism and pleasure. After a few years working in the same location, I am completely burnt out. I have no desire to go to work, when I’m there, have little desire to do anything but go home early. I am a bear of very little ambition.

When I took my current job, I had decided to finally ‘grow up’, settle down, and stop looking for the perfect job. All it would take, I thought, was an attitude adjustment and 150 mg of Effexor/day. I’d stay in my job and enjoy the fruits of stability, for a change. I would focus on my personal life (another area where I am kind of a failure, but that’s for another, longer, more irritating post.)

In the 90’s I took a brief stab at being self-employed, but I was completely unsuited. Not only am I bad employee, I am a terrible boss. I lacked the confidence and skills needed to carry it off. I eventually went on strike, and finally had to let myself go.

So I’m caught on the horns of dilemma, as they say. I have a job I no longer want, and no longer want any job. On the other hand, I do enjoy the benefits of having a job. I’m not sure whether I should take the plunge and do something incredibly out of character, or hunker down and stop whining.
In the mean-time, millions of people around the world are being tortured, starved, and dying from lack of drinking water. I hope none of them read this post, I would die from embarrassment.

Nearly a year later, in the wake of the current economic crisis raging all over the world and America not in the least, he wrote a sequel to his original post.

The more I observe the workings of the average administrator, the more convinced I am that the concept of competence in the American business is a myth.  For instance, administrators in my workplace do little but attend meetings all day long.  When I express my opinion that meetings are mostly a waste of time, they agree heartily.  They don’t seem to worry that what they do all day is waste time.  Why should you?

The current state of American business is a perfect example of why the lowly worker should relax and go with the flow.  Corporate CEOs are raking in millions in bonuses without any proof of competence.  If they are fired, they will easily find a similar job elsewhere.  How?  Because other CEOs and future CEOs sit on the hiring committees of American corporations.  These people certainly don’t want to start a trend of businesses demanding results as a condition for gargantuan golden parachutes.  To do so would be to ensure smaller payouts for them in the future.

So administration has the game rigged.  Workers do not enjoy the same power.  So the least you can do is stop believing the lie, the lie that you are somehow required to attain a level of competence unnecessary for your “betters.”  All they have that you don’t have is a $1000 suit and an old-boy conspiracy network.

What he says, especially about CEOs and their disproportionate salaries and bonuses versus their overly long time spent in meetings half in slumber half in dream, rings true to my ears from the personal experience and from what I have read and seen.

To work or not to work, this is the question.

May 1945. The WW2 was over.

The shattered financial and industrial worlds were given band-aid remedies in guise of Bretton-Woods (giving birth to IBRD, World Bank and IMF). Soon enough, few new states emerged (Israel), few split apart (India and Pakistan) and in few, liberal discontents led the way eventually winding up with democratic governments (Egypt).

One socialist regime, based on narrow-minded dogmatic doctrines, emerged from WW2 as one of the two strongest nations in the world. This nation had not only a large conventional military base, but was also in the middle of developing its own nuclear weapons (first tested in 1949).

The other victor of WW2 became a superpower not least due to the war itself. It advocated neatly idealistic doctrines, had a constitution spelling out loud the commitment to highest social and moral values, respect for human dignity and equality and adherence to human rights and law.

The first General Assembly of the United Nations met in London in January 1946, and created the United Nations Atomic Energy Commission. Part of their charge was to eliminate all weapons of mass destruction, including the atomic bomb.

America’s first effort to define a policy on the control of atomic energy was Acheson-Lilienthal report (1946). Its premise was that there should be an international “Atomic Development Authority” which would have worldwide monopoly over the control of “dangerous elements” of the entire spectrum of atomic energy. Drawing heavily on the information in the report, the US proposal (July 1, 1946) to the United Nations on international controls on nuclear material (named the Baruch Plan) was presented. It called for the establishment of an international authority to control potentially dangerous atomic activities, license all other atomic activities, and carry out inspections.

The Soviets rejected the Baruch Plan, since it would have left America with a decisive nuclear superiority until the details of the Plan could be worked out and would have stopped the Soviet nuclear program. They responded by calling for universal nuclear disarmament. In the end, the UN adopted neither proposal. Seventeen days after Baruch presented his plan to the UN, the US conducted the world’s first postwar nuclear test. Two atomic tests – code named “Operation Crossroads” – were conducted at Bikini Atoll in the Pacific. These tests explored the effects of airborne and underwater nuclear explosions on ships, equipment, and material. Almost 100 surplus and captured ships were used as targets, including the Japanese battleship Nagato (flagship of the attack on Pearl Harbor). These tests were witnessed by hundreds of politicians and international observers, and 42,000 military and scientific personnel. The two bombs used in Crossroads were identical in design and yield to the bomb used on Nagasaki. Crossroads put pressure on Soviets to pour significant amounts of money into research and development of their nuclear arsenal.

This is how the Cold War started. It had two main axes, which were usually typified by one or some of following doublets:

• Truman Doctrine and Marshall Plan vs. Marxism-Leninism-istic Stalinism

• Economic dimension of communism vs. capitalism

• Political dimension of communism vs. democracy

• West vs. East

USSR took on the challenge and a nuclear arms race, which became the determinant factor during the next 50 years, ensued. Nuclear race was followed and paralleled by development of strategic triad by Americans. This race got a new spatial dimension, when Soviets launched the Sputnik into orbit on Oct. 4, 1957. John F. Kennedy, despite his short tenure as American president, made few speeches, which resulted in creation of, among others, Peace Corps, and first (American) landing on the moon. As  crucial ideological battle against oppression, McCarthyism became a prominent movement, a sort of a “witch hunt” for communists and communist sympathizers inside America.

As Marx’s tenets had instructed, communism did not stay home; it had be to spread worldwide to achieve utopia. Some countries had adopted communism to help realize that goal, including Warsaw Pact nations, Yugoslavia (1945 – 1992), DPRK (1954 – present), Yemen (1969 – 1990), Somalia (1969 – 1991), Cambodia (1975 -1989). The communist governments in all of these countries (except DPRK) collapsed right around the same time as the Soviet Union. Communism also rose to power in the nations, where it is still alive today, such as China (since 1949), Cuba (since 1959), Vietnam (since 1976), and Laos (since 1975).

The tension between America and the Soviet Union wasn’t just restricted to technological and economic races. Few full-fledged crisis erupted during the Cold War, including the Korean War (1950 – 1953), Vietnam War (1959 – 1975), the Bay of Pigs (1961) Invasion and the Cuban Missile Crisis (1962).

Then Gorbachev came in 1985 with his Perestroika (reconstruction). At that time, all means of production were state-controlled, a fact which discouraged the initiative and innovation. The Soviet system was not adaptable by itself and perestroika was therefore doomed from the start. Gorbachev did not have the political capacity to push the desired reforms through (one of the most significant being Law on Cooperatives). His half-hearted efforts eventually triggered the collapse of the Soviet Union, which was completely unexpected.
The political system, like the economy, rested on a foundation of lies. Political leaders from cities and regions fabricated domestic and foreign policy statistics, using propaganda, including the newspaper “Pravda.” This newspaper later became a symbol of hype about Soviet productivity. In 1991, the Soviet Union officially came to an end (under Yeltsin elected a year before) and split into republics.

When the Soviet Union dissolved, it led to a domino effect of communist nations collapsing.

Cold War was over as well.

Dot.com bubble witnessed many young, bright and entrepreneurial spirits launch themselves into the tech gold rush only to see themselves chasing the fool’s gold. Too many entrepreneurs wound up in searching for jobs in not-so-inspiring companies and earning not-so-high a salaries. But few found courage to continue their entrepreneurial march and found new beginnings, although not necessarily with happy endings. Eric Ries of IMVU, named as one of the Best Young Entrepreneurs of Tech in 2007 by BusinessWeek, is a case in point.

Eric, like many other talented and bright young men in America, had a rather typical start at Yale: have an idea/dream, find a soulmate, work on the idea.

While pursuing a degree in computer science at Yale, Ries took cues from young techies in Silicon Valley who had no problem getting VC firms to back their software dreams. So he and a roommate started CatalystRecruiting.com, an online database of student résumés, and lined up their own slice of the VC pie. “In retrospect it was not such a good idea for investors to give money to kids who just barely knew what they were doing,” Ries says. “They were just throwing money at these companies. But when the bubble burst we had no chance.”

This first idea failed along with ideas and dreams of many others in the same dot.com lot. His next go? There.com.

Soon another lesson would begin. Ries describes There.com as a “traditional VC-model startup,” characterized by high fixed costs, a focused marketing strategy—and an underdeveloped sense of what consumers want. “They start a marketing buzz and a beautiful PR launch,” he says of the strategy too often pursued by startups, There.com included. Ries rattles off other hallmarks: blow through cash by bulking up on staff, hire a vice-president of marketing “and the burn rate keeps growing.” The trouble is, “they never tested if there would be immediate consumer adoption,” Ries says. Worse, the company couldn’t easily adapt to change, he says. “It was rigid and top-down.” Neither Ries nor Harvey lasted long.

The second time failed as well. None of the two did not seem to be a killer startup and couldn’t not wither turbulent and volatile tech market conditions. He did not digest well the errors he has made during the first two gos. One pattern he could however clearly see in both of his failures was the perceived gap between the tech strategy and business strategy, i.e. the tech-centered approach versus the customer-centered one.

For Ries, try No. 3 would be a charm. After losing their jobs at There.com, Ries and Harvey began working on their own startup, IMVU. This time, Ries says, the lessons stuck. “I knew I couldn’t just be a tech entrepreneur,” he says. “The tech strategy needs to be determined by the business strategy, not the other way around,” he says. So the company’s first meeting was all about determining culture and values. “Startups don’t fail from lack of technology,” he says. “They fail from lack of customers.”

His discipline, creativity and determination led him and his partner-in-crime Harvey into founding IMVU. This time, he knew well how to organize his startup; he had learnt it a bitter way, but he did. This time he knew well what there was to know about founding a startup, he had two failures under his belt, and he was determined to succeed.

Early on in his tenure as IMVU’s chief technology officer, Ries audited a class at Berkeley’s Haas School of Business. The instructor, Steve Blank, was so impressed with Ries’ attention to strategy and understanding of business R&D, that he called Shawn Carolan, a managing director at Menlo Ventures, and advised him to invest. Carolan describes Ries as the guy who would go out and read a business strategy book the moment someone mentioned it.

Fruits of his protracted efforts, failures and unfettered passion for what he believed started showing up, the first sign being almost a lucky strike.

Menlo became a backer, as did Allegis Capital (IMVU also had angel investors). “In the consumer market you have to have humility to admit you don’t know exactly what the consumer wants, so that you can be proactive and test features and make changes,” Carolan says. “Eric has an unusual amount of humility and he is unique as a tech person in his ability to be strategic in his business.”

IMVU showed all signs of success early on. Ries started practicing a lean approach for his own startup. Lean startups are resources-, money- and energy-frugal from the very beginning, and as a result are poised better for sustainable growth and long lifetime.

Part of that strategy was taking the product to the customer for testing as early as possible and keeping site development costs low. IMVU.com had a beta version up and running within six months. By contrast, there hadn’t been a test of There.com in its first five years. To prove that the product resonates with customers, there is a small fee associated with participation, and so far, the test phase has met or exceeded the corresponding financial targets.

Additionally, Ries has helped keep expenses in check by adopting a low-cost, low-risk software development process that maximizes ways to improve the site.

IMVU turned out to be an ultimate success and so did Ries, who is not only a full-time in his own startup but serves on boards of other leading tech boxes like pbWiki, Causes and KaChing.

Now the world is facing a recession, the worst one since the Great Depression. But entrepreneurial world is not necessarily crying doom and end to new ideas and initiatives. While some do, others are more moderate by providing an advice/how-to and still others are outright optimistic for launching a startup especially during this recession.

Make your choices.

Who was the worst, the most failed American president? This question is undoubtedly all the more actual in the wake of current economic and political developments and considering that the presidential elections are only ten days away.

First ever rankings of American presidents started by a renowned Harvard professor Arthur Schlesinger Sr. in 1948, who asked 55 historians to rank American presidents on a scale from “great” to “failure.” Changes in presidential rankings reflect shifts in how we view history. When the first poll was taken, the Reconstruction era that followed the Civil War was regarded as a time of corruption and misgovernment caused by granting black men the right to vote. As a result, Andrew Johnson, a fervent white supremacist who opposed efforts to extend basic rights to former slaves, was rated “near great.” Today, by contrast, Johnson is duly considered a failure due to currently prevalent views that Reconstruction was a flawed but noble attempt to build an interracial democracy. Another American president who has been regarded ambivalently, according to Alan Brinkley, is Richard Nixon, who said “There are presidents who could be considered both failures and great or near great (for example, Nixon).” Nixon became notable for his accomplishments and defeats in domestic and foreign policy, but is mostly associated today with disdain for the Constitution and abuse of presidential power. He was paranoid about national security and obsessed with secrecy and media leaks. Nixon always considered himself above the law.

There are nonetheless few American presidents about whom the public has consistent and unaltered views regardless of historic perspectives. Abraham Lincoln, George Washington and Franklin D. Roosevelt always figure in the “great” category. Most presidents are ranked “average.” Franklin Pierce, Warren G. Harding, Calvin Coolidge, James Buchanan constantly occupy the bottom rung, and George W. Bush is a leading contender to join them. A look at history of his policies will explain why.

At a time of national crisis, Pierce and Buchanan, who served in the eight years preceding the Civil War, were simply not up to the job. Stubborn, narrow-minded, unwilling to listen to criticism or to consider alternatives to disastrous mistakes, they surrounded themselves with sycophants and shaped their policies to appeal to retrogressive political forces (in that era, pro-slavery and racist ideologues). Even after being repudiated in the midterm elections of 1854, 1858 and 1866, respectively, they ignored major currents of public opinion and clung to flawed policies.

Harding and Coolidge are best remembered for the corruption and scandals accompanying their years in office (1921-23 and 1923-29). They slashed income and corporate taxes and supported employers’ campaigns to eliminate unions. Members of their administrations received kickbacks and bribes from lobbyists and businessmen. “Never before, here or anywhere else,” declared the WSJ, “has a government been so completely fused with business.” Current presidential hopeful John McCain, according to certain views, is considered not unlike Harding.

Bush’s (and his VP Cheney’s) disdainful stance towards things lawful and democratic has been much publicized. Be it his decision to go to an unsolicited war on Iraq or his attempt to strip people accused of crimes of rights that date as far back as the inception of Magna Carta: trial by impartial jury, access to lawyers and knowledge of evidence against them. He has asserted the right to ignore the parts of laws with which he disagrees. His administration has adopted policies regarding the treatment of prisoners of war that have disgraced the nation and alienated virtually the entire world. Usually, during wartime, the Supreme Court has refrained from passing judgment on presidential actions related to national defense. The court’s unprecedented rebukes of Bush’s policies on detainees indicate how far the administration has strayed from the rule of law.

Whether the history will judge Bush Jr. as the worst will be known only in future. US News’s Jay Tolson conducted a thorough research (in 2007) of American presidents and came up with the list of the worst ten American presidents:

1. James Buchanan (1857-1861) – He refused to challenge either the spread of slavery or the growing bloc of states that became the Confederacy.

2. Warren G. Harding (1921-1923) – He was an ineffectual and indecisive leader who played poker while his friends plundered the U.S. treasury.

3. Andrew Johnson (1865-1869) – He survived impeachment after opposing Reconstruction initiatives including the 14th amendment.

4. Franklin Pierce (1853-1857) – His fervor for expanding the borders–thereby adding several slave states–helped set the stage for the Civil War.

5. Millard Fillmore (1850-1853) – He backed the Compromise of 1850 that delayed the Southern secession by allowing slavery to spread.

6. John Tyler (1841-1845) – He was a stalwart defender of slavery who abandoned his party’s platform once he was president.

7. Ulysses S. Grant (1869-1877) – Serving right after Johnson, he presided over an outbreak of graft and corruption, but had good intentions.

8. William Harrison (1841) – He was president for all of 30 days after contracting pneumonia during his interminable inaugural.

9. (tie) Herbert Hoover (1929-1933) – He was known as a poor communicator who fueled trade wars and exacerbated the Depression.

9. (tie) Richard Nixon (1969-1974) – Though politically gifted, he will forever be associated with the Watergate scandal and his resignation.

10. Zachary Taylor (1849-1850) – A political novice, the war hero is entirely forgettable as president.

Historically, science and technology have gone along many routes which turned out to be dead-ends.

Science has many discredited theories and obsolete paradigms such as alchemy, phlogiston, universal ether, and more.  They failed the reality test and were cast aside, occasionally turning up in fantasy stories and crackpot websites. Some scientists use science to explain/interpret social and cultural phenomena. Sam Harris, for example, says (completely ignoring the spiritual, cultural and social aspects) the religion “is indeed failed science” and expresses hope that information, education and science will rectify this situation. In the modern world  even  renowned scientists are prone to making claims and predictions, which cannot be substantiated. An interesting case in point is Paul Ehrlich, a world-renowned entomologist whose failed predictions about environment (for example “There is no evidence that global warming is real“) are still resoundingly discrediting relevant scientific research and available empirical data. There are even cases (controversy surrounding discovery of element 118) when scientists deliberately fabricate fake data to support their theories and claims.

Technology has a bit more wiggle room but is still full of false/failed predictions and intentions.  Some technologies were perfectly viable from an engineering standpoint, but either couldn’t compete economically or never really had a market.  The canonical example is airships.  With abandoned technologies there’s always the suspicion that if things had turned out differently we might be driving atomic cars or be regular tourists on the spacecraft Cycler commuting between Mars and the Earth or some other high-end, futuristic sci-fi-inspired gig. Douglas Self’s Museum of Retro Technology contains information on dozens of devices, which existed, but never became part of everyday life.

Failed technologies are different from completely bogus technology.  We’ll never get power from a Keely Motor and we will most probably be unable to  make mainstream steam-powered airplanes because they either had high costs related to manufacturing or unprepared markets or could simply not compete with more conventional designs.

But all these false roads and blank directions were not taken in vain.  If you take a look at major inventions and discoveries in science and technology you will see that most, if not all, happened by merry happenstance (radioactivity theory by Marie Curie), unanticipated development (Arpanet and Internet) or in the course of pursuing a plainly different objective (serendipitous case of discovering penicillin by Alexander Fleming).

The World War I was over. German Revolution was declared a success and Weimar republic was proclaimed. But the suffering from the Great Depression and unfavorable conditions of Treaty of Versailles couldn’t not help but widen the gap of declared system of parliamentary democracy and the harsh political and economic reality of the country. Important factor exacerbating the situation was a right-wing myth that Germany lost the war because of the German Revolution. Radical left-wing communists, on the other hand, were playing with popular emotions by trying to combat what they saw as capitalist policies. To quench the political instability, a rather controversial figure was appointed as Chancellor of Germany on 30 January, 1933.

His rise was difficult and littered with obstacles. It started when the German government received reports of an imminent terrorist attack. A terrorist had launched feeble attacks on a few famous buildings, but the media largely ignored his relatively small efforts. At the time the man who claimed to be the nation’s leader had not been elected by a majority vote and many claimed he had no right to the powers he coveted. Six years later, this leader did not only command popularity and patriotic feelings of his nation but was also hailed as the “Man of the Year” by Times magazine.

He was a simpleton and had a coarse use of language. His simplistic and inflammatory nationalistic rhetoric offended foreign leaders and the well-educated elite. And, as a young man, he’d joined a secret society with an occult-sounding name. The only visible talent he possessed was drawing.

“You are now witnessing the beginning of a great epoch in history,” he proclaimed, standing in front of the burned building, surrounded by national media. He used the occasion to declare an all-out war on terrorism, originating, according to him, in the Middle East and in their religions.

Four weeks later, the nation’s now-popular leader had pushed through legislation – in the name of combating terrorism – that suspended constitutional guarantees of free speech, privacy, and habeas corpus. Police could now intercept mail and wiretap phones; suspected terrorists could be imprisoned without specific charges; police could sneak into people’s homes without warrants if the cases involved terrorism. To get his patriotic “Decree on the Protection of People and State” passed over the many objections of concerned legislators, he agreed to put a four-year provision on it. Citizens who protested the leader in public – and there were many – quickly found themselves confronting the newly empowered police, jail cells.

He wanted to stir a “racial pride” (based on eugenics of Gobineau) among his countrymen and began referring to the nation by “Heimat” (Homeland). Playing on this implicitly racial nationalism, he argued that any international body that didn’t act first and foremost in the best interest of his nation was neither relevant nor useful. He withdrew his country from the League Of Nations in 1933, and in 1935 negotiated a naval armaments agreement with England. To further consolidate his power, he reached out to industry, bringing former executives of the nation’s largest corporations into high government positions.

His propaganda minister orchestrated a campaign to ensure the people that he was a deeply religious Christian. Every then German soldier was sporting a belt buckle with “Gott Mit Uns” (God Is With Us). Along the same lines, he declared that the nation had clear Christian roots, that any nation that didn’t openly support religion was morally bankrupt. Many government functions started with prayer.

His speech on April 12, 1922 included:

“My feeling as a Christian points me to my Lord and Savior as a fighter. It points me to the man who once in loneliness, surrounded only by a few followers … was greatest not as a sufferer but as a fighter.

“As a Christian … I have the duty to be a fighter for truth and justice…”

But after an interval of peace following the terrorist attack, voices of dissent again arose within and without the government. Students (later regrouped as White Rose) had started an active program opposing him and leaders of neighboring nations were speaking out against his racially discriminatove rhetoric. His propaganda minister ntensified the nationalistic campaign. Those questioning him were labeled “anti-German” or “not good Germans.” Another technique was to “manufacture news,” through the use of paid shills posing as reporters, seducing real reporters with promises of access to the leader in exchange for favorable coverage, and veiled threats to those who exposed his lies.

In 1939, to “attenuate” the economic decline and re-unify the nation, he pointed at an external threat: Czechoslovakia (despite English warnings). Shortly after, Poland was invaded in a “defensive, pre-emptive” action.

As his propaganda minister said:

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

This dictum not only became reality in Germany but also with it, the leader’s popularity grew as the nation plunged into yet another world war.

The leader of the nation was Adolf Hitler who put an end to the first democratic experiment in Germany.

Any conversation, casual discussion or even a short encounter might and usually is accompanied by a story. Some stories talk of peaks; some – of lows. All stories have one thing in common: their structure. Stories start by setting a context (location, main “players,” initial conditions), then proceed with developments (events, interactions) and conclude with an endnote. Many stories, like parables, impart not only useful information but also the between-lines, and unconsciously, an inevitable “conclusion.”

Below are two stories, which Ford Harding, the founder and President of Harding & Company, came across during his long and successful career path.

Bob Hillier, an architect who knows how to bring in business, showed how powerful the sadder-but-wiser anecdote can be, when a prospective client said to him, “I’ve had some bad experiences with architects. How can I be sure you’re going to bring this project in on budget.”  Everyone in the room knew that the engagement hung on the answer to this question.  I looked at Bob.  He responded with the following story:

When I had only been in business a short time, I won a project to help renovate a classroom building at a local university.  Our design substantially exceeded the client’s budget, but I thought it was so beautiful that I could talk them into spending the money. When I met with the facilities manager, he looked at my design and immediately asked what it would cost. I told him, and he handed me back my drawings and told me the engagement was over. I said I would redo the work to fit his budget, but he said no, he couldn’t work with someone who didn’t listen to him. I’ve never forgotten that lesson.

With that story, so much more effective than promises or statistics, he won the engagement.

Similar incidents litter professional careers and lives of everyone. Tale-like, informative and full of powerful implications, such events leave an indelible mark on those affected first-hand and make an unforgettable impression on those hearing their account.

Here is a story that I heard an attorney tell to an accountant he was hoping to get referrals from:

When I was a young lawyer, I was trying a case in front of the judge with a reputation for being hard-nosed. I found myself getting so wrapped up in my client’s case at one point that I stopped and apologized. The judge got mad at me right there in front of my client. “How dare you apologize,” he said. “If you don’t feel emotional about your client’s case, why should I?”  Ever since then, I have never felt embarrassed about being emotionally committed to my clients’ cases.

This story is far more persuasive than a statement like, “I will really fight for any client you refer to me.”

These two anecdotes were illustrative of two people who had learnt from their previous mistakes the hard way.  Stories are also a cure when facing awkward/frustrating but critical moments. There are many such stories associated to rainmakers. There is something visceral in our fascination with stories, especially when we feel relating to or identifying with them.

Stories can be inspirational and funny. In the business world, for example, Bill Gates is notorious for his association to a plethora of stories – some true, some exaggerated and some utmost lies. Here is one at the same time informative and entertaining.

“Bill Gates and the president of General Motors have met for lunch, and Bill is going on and on about computer technology. ‘If automotive technology had kept pace with computer technology over the past few decades, you would now be driving a V-32 instead of a V-8, and it would have a top speed of 10,000 miles per hour,’ says Gates.

“‘Or, you could have an economy car that weighs 30 pounds and gets a thousand miles to a gallon of gas. In either case, the sticker price of a new car would be less than $50. Why haven’t you guys kept up?’

“The president of GM smiles and says, ‘Because the federal government won’t let us build cars that crash four times a day!’”

Many other business anecdotes can be found here, here and here.

For all of those in the business world, remember that many stories, especially those with bad ending, are caused, ironically, by what Ambrose Bierce once defined in his Devil’s Dictionary.

Corporation: An ingenious device for obtaining profit without individual responsibility.

Happy storytelling.

Current financial crisis starts showing growing signs of migrating to other industries and already causing anticipative layoffs and cuts in many well-established as well as small/startup businesses.

The figure on the left comes from the book by Scott Shane Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By. The data comes from a special tabulation by the Bureau of the Census produced for the Office of Advocacy of the US Small Business Administration. While these data look at the 1992 cohort of new single establishment businesses, the failure rate percentages are almost identical for all the cohorts that researchers have looked at. These are the averages (considerable differences across industry sectors in business failure rates).

William Bygrave, Professor Emeritus of Entrepreneurial Studies at Babson College, in his book The Portable MBA in Entrepreneurship made the following assertion in 1997:

If you intend to start a full-time, incorporated business, the odds that the business will survive at least eight years with you as the owner are better than one in four; and the odds of its surviving at least years with a new owner are another one in four. So the eight-year survival rate for incorporated startups is about 50%.

The failure rate is high due to inclusion of sole proprietorships in the statistics. Sole proprietorships push up the failure percentage due to:

• Many startups and new business venture are sole proprietorships.

• Sole proprietorships are very easy to form and are a typical start for small businesses.

• Many of the owners of sole proprietorships leave the business startup for different reasons, not including bankruptcy.

• It is sometimes difficult to find external funding for sole proprietorships (VCs and angel investors have preference for limited liability partnerships with few competent and experienced founders).

Two-thirds of new employer establishments survive at least two years, 44 percent survive at least four years, and 31 percent survive at least seven years, according to a recent study. The same research found that businesses that survive the first four years have a better chance of surviving long-term.

Small Business Growth: Searching for Stylized Facts written by Brian Headd of the Office of Advocacy and Bruce Kirchhoff in October 2007 examines small business dynamics. It notes that growing firms tend to be a constant percentage of all firms and as a general rule, new employer businesses have a 50/50 chance of surviving for five years or more. Among other things, the authors’ analysis determined that:

• Growing single establishment small firms are generally a constant percentage of industries and the economy

• Over time, the percent of growing firms tends to be greater than that of decliners;

• Fast growing firms tend to grow in spurts, then revert to average growth;

• No significant relationship exists between fast growing industries and the number of fast growing firms with in those industries; and

• Industries with many growing firms also tend to have many decliners.

And considering recent developments in the financial markets and their subsequent repercussions on the corporate world, Jason Calacanis, the founder  of Weblogs Inc. and Mahalo asserted “that 50-80% of the venture-backed startups currently operating will shut down or go on life-support (i.e. 3-4 folks working on them) within the next 18 months.“

Which one of the estimates and forecasts (mentioned or not mentioned) above will eventually prove to be accurate remains to be seen. In the meantime, what all entrepreneurs and startups have to do is to focus their energies, finances and best of their efforts on meeting market and customer needs efficiently and effectively and keeping in mind not to repeat some of commonly made mistakes because any or combination of such mistakes, perhaps not critical in past, might become become so in present and not-so-far future.

The Fund for Peace is an independent nonprofit research and educational organization founded in 1957 by investment banker Randolph Compton. Since its inception, it aimed at prevention of conflicts and alleviation of causes of conflicts. Due to its historic role and analysis conducted in socio-economic, political and demographic fields, the Fund came up with the idea of evaluating countries based on indicators such as demographic pressures, economic development, and deterioration of environment, among others. From 2005 co-operating with Foreign Policy magazine, the Fund publishes its annual “Failed States Index” that provides results of analysing a large set of factors causing/contributing for a state to fail or become weak. While generally a good starting point of information for decision-makers, few criticize the notion of “a failed state” because its frequent references to countries considered a threat to the US government.

The index provides assessment only for sovereign states (determined by membership in the United Nations). Territories such as Taiwan, the Palestinian Territories, and Northern Cyprus are not figuring on the list until their political status and UN membership is ratified. Ranking is measured based on 12 indicators, which are divided into three categories: social, economic and political. For each indicator, the ratings are placed on a scale of 0 to 10, with 0 being the lowest (most stable) and 10 being the highest (least stable). The total score is the sum of the 12 indicators and is on a scale of 0 (least failed) to 120 (most failed).

Social Indicators

I-1. Mounting Demographic Pressures
I-2. Massive Movement of Refugees or Internally Displaced Persons creating Complex Humanitarian Emergencies
I-3. Legacy of Vengeance-Seeking Group Grievance or Group Paranoia
I-4. Chronic and Sustained Human Flight

Economic Indicators
I-5. Uneven Economic Development along Group Lines
I-6. Sharp and/or Severe Economic Decline

Political Indicators
I-7. Criminalization and/or Delegitimization of the State
I-8. Progressive Deterioration of Public Services
I-9. Suspension or Arbitrary Application of the Rule of Law and Widespread Violation of Human Rights
I-10. Security Apparatus Operates as a “State Within a State”
I-11. Rise of Factionalized Elites

I-12. Intervention of Other States or External Political Actors

In the words of the people from Foreign Policy:

Because it is crucial to closely monitor weak states—their progress, their deterioration, and their ability to withstand challenges—the Fund for Peace, an independent research organization, and FOREIGN POLICY present the fourth annual Failed States Index. Using 12 social, economic, political, and military indicators, we ranked 177 states in order of their vulnerability to violent internal conflict and societal deterioration. To do so, we examined more than 30,000 publicly available sources, collected from May to December 2007, to form the basis of the index’s scores. The 60 most vulnerable states are listed in the rankings, and the full results are available at ForeignPolicy.com and fundforpeace.org.

According to this year’s Index, Somalia is the number one failed state in the world while Norway is the most prosperous. Moreover, seven out of the ten most failed states in the world are from Africa (only exception being Afghanistan, Pakistan and Iraq). There are currently 35 failed states (marked in red) of which 19 are African.

The report claims Somalia is the most failed state in the world. Many researchers believe that Somalia is a collapsed state since the collapse of its national government in 1991. Somalia scored a record amount of points this year: 114.2 (out of maximum possible 120), which is also the closest a state got to complete failure since the Failed States Index was first published. The country report shows that none of Somalia’s indicators improved since the last year’s index.

Due to ongoing crisis in financial markets, Iceland (172nd on the 2008 list), considered one of the least failed or best countries in the world (the best country to live according to the UN Development Index 2007) turned in a matter of few weeks (mainly due to its almost exclusive economic reliance on the global financial markets) into a state on the verge of national bankruptcy.

Iceland is a glaring example of how “well” globalization works its magic in the modern era of interconnectedness and interdependence.

It is not easy for most entrepreneurs and businessmen to talk about their own failures. When they do, they tend to be indulgent or lenient about their past experiences and are inclined to shift some of the “blame” on environment, tendencies, people or just plain luck (lack of it). Only few speak candidly and admit their errors openly with intention of contributing to the accumulated business wisdom and in hope of providing useful information for those aspiring and resourceful entrepreneurs who are at the beginning of their paths. The first step to overcome a failure starts by admitting that we are not perfect.

Jeremy Schoemaker, the founder of ShoeMoney Media Group, is one of the entrepreneurs who had many ideas, which could potentially lead to business successes but instead turned out to be business failures.

Anyway I came up (in about 10 minutes) my top 10 worst ideas to make money that totally were a waste of time and effort (and money in some cases).

Below are some of his top 10 worst money making ideas he came up with.

10 – FireFox Forum (firefoxforum.com) – I purchased this site on digitalpoint ($800) after getting some inside information that FireFox was going to team up with Google on a per download affiliate program. Well all that happened and I think I made about 50$ the first year. FLOP

7 – Omaha-Used-Cars.com – Now here we go! This is easy. Just make a used car site and charge dealers a .25cent per car listing fee right ? ehhh none interested… FLOP

6 – SMS Text Dating textdating.com/texting.com – I was soooooooo sure this one was going to be it! The concept is simple basically you subscribe to this dating website. Make a profile then you could send a message to the person from the website to there mobile phone without having to know there phone number. I had this totally done and nobody every signed up… FLOP

5 – St. Marry’s Bar & Grill – Ok this has nothing to do with the internet. After the Hooters closed down in Lincoln I tried to re-open it then when that did not work out I thought about making a restaurant called St. Marrys where it was like a church and the waitresses dressed like catholic school girls and like the nuns would be the managers and spank the waitresses if they were bad?!? Yes I know bad idea and I never really pursued it…. I like in one of the most conservative catholic communities in the country so no way it would fly… and yes i know im going straight to hell.

3 – Ads Or Not
Simple concept. There is 5 ads on a webpage only one of them is NOT REALLY A AD! Each time you successfully spot the fake ad you get some money built up into your account. – I had issues finding advertisers who were down for this =P FLOP

1 – ShoeMoney Petroleum Company -
(I cant believe im actually telling these in public)

Ok Follow me here -
I want to purchase a Gas Station and Give away Free Gas
The catch is like the gas would come out really slow and also you would be limited as to how much you could get per week. (Like max 50 gallons a week).
How do I make money ? EASY – I would setup paintball guns around the gas station with webcams that would let people from the internet take shots at the people filling up there cars with gas. You could charge per shot or a xxxx amounts of shots per month for a set fee. PROBLEM – I talked to a city council member about this and he told me there was a “no flying ordinance” or something rule within city limits however I could maybe do it in the country…

As you see the breadth and width of ideas is not lacking in originality and ambition. Some of the ideas above would surely seem killer to me and many other entrepreneurs. However, not all, even brilliant and innovative, ideas become equally successful and growing businesses. In face of the ongoing financial crisis and shrinking funds, quite a few investors and VCs go as far as clearly outline what an idea needs to have to obtain a backing. For those who cannot reach VC/investor pockets or are simply willing to build their business without initial VC/investor funding, there is also a way. Whichever way you choose, make sure to check out the startup rules of Loic Le Meur, the founder of Seesmic, and those of Sequoia Capital, a leading VC firm, and do not be afraid to fail. Embrace your failure, learn from it, and remember the words of one of the most profound thinkers of 19th century, Friedrich Nietzsche, who mused, “What does not kill you makes you stronger.”

Good luck.