Page 185 - 6 Secrets to Startup Success

164 6 SECRETS TO STARTUP SUCCESS

Warren Buffett, regarded as one of history’s best business minds,
knows that his own carefully honed judgment is permanently fallible.
In his 2007 annual letter to shareholders (the net worth of his firm in-
creased by $12.3 billion that year) he outlined a series of mistakes.
“And now it’s confession time,” he wrote. “It should be noted that no
consultant, board of directors, or investment banker pushed me into
the mistakes I will describe. In tennis parlance, they were all unforced
errors.” He goes on to explain in detail a couple of questionable in-
vestment decisions. “The only explanation is that my brain had gone
on vacation and forgot to notify me,” he writes. “One thing is for sure.
I’ll make similar mistakes in the future.”12

The day after J.C. Faulkner and his management team decided to
close down Home Free was an exercise in humility. “It was one of
those unforgettable moments when I had to acknowledge my mistake
and lay off ninety-five people in one day, which was the hardest thing
I ever had to do,” J.C. says. “Then, I got in front of the other hundred
people[in D1’s home office]. We admitted the challenges in the mar-
ket. We admitted the mistakes we had made . . . we just came clean.
There was no positive spin. I was obviously concerned that I would
lose credibility when I explained I was wrong, but what I learned was
that people appreciated the honesty. They felt good that we under-
stood our mistakes; and it kind of humanized us a little bit.”

An investor friend of mine once explained to me why he was will-
ing to stand behind the expansion plans of a young restaurateur. “He’s
young and passionate; he has great ideas and an incredible work ethic,”
he said. “But the thing that sets him apart is his humility. Although he
knows a lot about the restaurant business and he has great instincts,
you would never know it from how he interacts with people. He is a
learning machine, and he is incredibly driven to find out what other
people know. He has surrounded himself with highly experienced
people, people who have accomplished great things in the industry,
and he becomes a student at their feet—teach me, show me, help me un-
derstand what I can learn from you.”

American Management Association • www.amanet.org