Analysis of My First Failure

or How did I reach that low point of despair at Eagle Creek?

Looking back at my first failure (while I was in my Twenties), all I see is youthful ignorance and foolishness (aka stupidity). Alas, that alone is not helpful for root cause analysis of my first business failure. There are three causes, however, which do stand out and serve as an object lesson throughout the early part of my business career.

All three of these root causes were congealed together into a lump which both blinded and controlled me. Let’s look briefly at each before we jump into the purpose of this chapter.

1. Ignorance of Business Mechanisms

2. Cargo Cult Business Mimicry

3. Thinking process dominated by feelings rather than reason

1950 Ford Tudor Coupe (image public domain)

An incident from when I was seven years old might illustrate the situation better than explanation (although, rest assured, explain I will!).

At the time, my father had an old 1950 Ford Tudor Coupe. It was always parked on the street. Those cars did not have keyed ignition, just a starter button for the starter motor. I must have both wanted to drive it and thought that I could drive it, because one day I got into the driver’s seat and started the engine.

Well, I tried to start the engine. I don’t even think my feet reached the pedals, but I kept pushing the starter button making the starter motor whine, turning the steering wheel, and trying to shift the gears. Each time I activated the starter, the car strained against the parking brake and trembled, trying to move forward.

This all caught the attention of the neighbor across the street, who chased me out of the car and into trouble with my father.

Why didn’t my sincere efforts get the car to start and move?

→ Ignorance of the mechanisms of an automobile. Obvious, right?

But what about all my vigorous activity? (Pushing the starter button and turning the steering wheel?)

→ Mimicry (aka Cargo Cult Science) of my father’s actions.

What about my vision process? (and getting in the car in the first place and desiring to drive?)

→ An immature childish thinking “process” dominated by feelings and impulse.

This example shows exactly
what went wrong with my first business venture …
and understandably why it failed.

Everything stems from the first fundamental flaw: Ignorance of Business Mechanisms. If one is ignorant that Business Mechanisms even exist and need to be understood, then Business appears as though it were something amorphous, mysterious and random. This resembles how humans used to view weather. They perceived atmospheric events as astounding: something that only a gifted few could discern through divination or augury.

Because the outwardly complex form of business hides any of its mechanisms, then it is easy for a naive business newbie, like my younger self, to foolishly fall into both mimicry and actions dominated by capricious feelings when trying to be a “businessman”.

And it is also easy to understand why failure would quickly follow such folly. Being ignorant of the Mechanics of Business is like trekking the wilderness without a compass, without a guide, without experience. Even the most passionate entrepreneur is doomed to wander lost in circles until his demise.

(This is an excerpt from my up-coming book on The Mechanics of Business.)

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