Studying failure to succeed. The great philosopher Yoda once said: “The greatest teacher, failure is.” I don’t remember when or why studying failure became such a key feature of my business planning, but it did – and it saved my ass.
I like to cheekily say that I play dress-up and swing swords at my friends for a living. Cheeky, but true. I own Sherwood Forest Faire near Austin, Texas, a medieval theme park set in late 12th century England. Think Robin Hood and the Sheriff of Nottingham. We recently had our 15th annual faire in the spring of this year, where we entertained 167,000 patrons in 17 operating days.
When I was 36 years old, I put a calendar appointment in my Blackberry (yes, the one on my belt holster) on my 40th birthday. It just said “STOP”. That meant to stop doing what the economy expected me to do and, instead, start following what I truly wanted to do, which was to marry my business skills and my passions. I didn’t know what that really meant at the time, but I had four years to figure it out.
It didn’t take long to realise that the Texas Renaissance Festival was the one thing, other than my mother, that I’d loved my whole life. After trying and failing to purchase two different fairs, I ended up co-founding Sherwood Forest Faire near Austin. We opened in February 2010, when I was 40 years old.
So, where does failure come into this story? Well, I have eight companies, and I’m rather rigorous about writing up a formal business plan for every one that I launch. In each of those business plans, I always make sure to include a slide on reasons for failure and what they could mean for the company I intend to build.
For example, before Sherwood Forest Faire launched in 2010, I found over 70 cases of renaissance festivals that had failed, and I categorised each of them by their reasons for failure. A pattern emerged: in over 70% of these failure cases, the reason was that the landowner and the business owner were different people, and that they had had a falling out.
You can easily imagine the scenario: the faire grows and starts to succeed, and so the landowner wants to raise the rent or get in on the action. Very often, they’ll want to open a bar. Once that conflict begins, it rarely ends well.
As well as understanding reasons for failure, I also wanted to know how to avoid it. So, I interviewed the owner of the Texas Renaissance Festival and asked him what his top three key success factors were. He said: 1. Own your own land, 2. Flushing toilets, and 3. Free parking. So, I developed a strong conviction that I would not buy or build a faire without also owning the land.
Admittedly, this kind of resolve can lead to deep and painful conflicts, as it did when Sherwood Forest Faire was being created. You see, while my soon-to-be business partner owned half the land, there was a silent partner who owned the other 50 percent. Consequently, I insisted on buying out the silent partner. I stood so firm on this point, that my co-founder ended up ending his relationship with the silent partner, who had been a long-time friend! Still, I know I have no regrets about it, and I’m pretty sure my co-founder, while feeling sad about the situation, understands that it was the right move.
So, here’s the rub. I don’t think you’ll find a popular business plan template that has a section on “reasons analogues fail”. You might find “common pitfalls”, but frankly I rarely see that either. You will see: Mission & Values, Value Proposition (the problem you’re solving), Competitive Advantage, Sales & Marketing Strategy, Organisational Structure, Total Addressable Market, and Financial Forecast. You won’t see “mistakes others have made which we won’t make”. Why is that?
I think it’s because business plans so often double as investor pitch decks. The point is to paint an exhilarating picture of the unicorn future. Founders don’t want to talk about the potential for failure. But the reality is that check writers want to see that you have thought about what could go wrong. They want to see that slide on how others have failed – and how you will learn from those mistakes.
I teach teens at another company of mine called Sherwood Forest Summer Camp. It’s basically a Robin Hood summer camp where kids learn blacksmithing, leather working, archery, swordplay, and more. One of my themes is wisdom. I teach the kids that it’s easy enough to learn from your own successes and failures, but that it can be much harder to learn from other peoples’. And that is where real wisdom comes from, in setting your mind to learn from other peoples’ stories.
So be wise. Be like Yoda. And let failure, your greatest teacher be.
