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Don't Let a Startup Failure Hold You Back Noted entrepreneur Vinod Khosla bounced back from several failed attempts at business before finding success with Sun Microsystems.

By Peter Daisyme

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

James Duncan Davidson/O'Reilly Media, Inc. | Wikimedia Commons
Vinod Khosla

What do Thomas Edison, Henry Ford, Milton Hershey, Walt Disney, Bill Gates, Steve Jobs, Oprah Winfrey and Arianna Huffington all have in common? Here's a clue -- it's not that they all immediately achieved high levels of success.

They actually all experienced some sort of failure during their careers. Bill Gates first company Traf-O-Data failed. Steve Jobs was booted from Apple. Henry Ford started two automobile companies before the Ford Motor Company. Arianna Huffington was rejected by 36 publishers.

Related: 10 People Who Became Wildly Successful After Facing Rejection

But, if there was one entrepreneur who was known for the trials and tribulations of Silicon Valley more than most, it would be Vinod Khosla, who failed several times before he founded Sun Microsystems. The thing is, nobody remembers his failures -- because failure doesn't matter if you succeed. And, that's a valuable lesson for entrepreneurs who believe that they're being held back by the failure of their startup.

It's claimed that Vinod Khosla dreamed of owning his own tech company at the age of 16 after hearing about the founding of Intel. After earning a bachelor's degree in electrical engineering from the Indian Institute of Technology (IIT) in New Delhi, Vinod attempted to start his first company at the age of 20. His soy milk company, which would have provided a source of milk to the people of India who didn't own refrigerators, failed to take off.

In an interview with The Economic Times, Vinod recalls:

"It was a failed venture, because it never got off the ground. I was very interested in soya milk, because I had to go get milk every day in those days, and there was an institute in Nainital that had developed this soya milk technology to make milk from soya beans. I remember vividly approaching people like the small-scale industries corporation in Delhi, and I forget exactly what it was called, and then I remember when I called to see what it would take to get a telephone and it was like seven years wait, the time to get a telephone. And I said I don't have patience, that is like half my life. I decided then that it made sense to go to Silicon Valley and do something there and do a startup there."

Before going to Silicon Valley, he received a master's degree in biomedical engineering from Carnegie Mellon University and a master's of business administration from Stanford University in 1979. While at Stanford, Vinod co-founded a computer-aided design company named Daisy Systems in 1981. Despite being a pioneering company and experiencing significant revenue, profits and even an initial public offering, Daisy eventually filed for bankruptcy.

According to one former employee, who joined Daisy in 1988, it was stated that Daisy failed because of "some bad financial decisions, a botched merger and acquisition and a new management team that didn't quite understand the company or its market" and, most importantly, failing to embrace "Open Systems."

According to Vinod: "For Daisy Systems days, we built computer-aided design applications, computer-aided engineering applications and computer-aided design. We developed, spent most of our money, and we had raised some venture capital developing the workstation and then a little bit of money developing the applications, and so it occurred to me that other people who wanted to develop applications wanted a platform too. So the idea for Sun came from the idea that companies like Daisy did not have a computing platform, a computer on which they could develop their applications, that they had to do everything, hardware and software."

Related: How Quitting Can Get You Exactly What You Want

Vinod could tell that Daisy was heading down the wrong path and was frustrated "of having to design the computer hardware on which the Daisy software needed to be built."

After Daisy, Vinod teamed up with Scott McNealy and started a company called The Data Dump, which Scott described as a "huge disaster."

In 1982, just three months after receiving funding for Data Dump, Vinod launched Sun Microsystems, and the rest is history. Vinod made his fortune and left the company in 1984 to become a venture capitalist at the firm Kleiner Perkins Caufield & Byers. In 2004, he formed Khosla Ventures "to focus on both for-profit and social-impact investments."

During his career, Vinod has made his way onto the The Midas List despite his past and current failures. Even though he is best known for funding Sun Microsystems, Vinod has also been a part of some major failures. These epic failures include Asera, Corio, BroadBand Office, Ethnic Grocer, Centrata, 3DO, and Excite@Home, which Wired called the "$7 billion delusion."

Perhaps his biggest failure was the Dynabook, which VentureBeat stated was similar to "a 1980s version of an iPad with a pen." Despite having prominent investors, a catchy tagline ("the pen is the point"), and a team that "started believing that bullshit," Dynabook failed -- because users wanted mobility.

What most of us love about Vinod Khosla is that he's brutally honest about his past failures. He has said, "I like to say my willingness to fail is what gives me the ability to succeed." He has said, "failure does not matter, it's success that matters." People remember Vinod for Sun and not failed companies like his soy milk idea, Daisy or the Data Dump.

If you have the failure of a startup that is holding you back, take these final pieces of advice from a man who has experienced both success and failure and used them an advanced learning tool.

1. Don't be afraid to take risks.

"No failure means no risk, which means nothing new." He adds, "If everyone stuck to being well-behaved, there would be no progress."

2. Learn from your mistakes.

"The key is to make the consequences of each failure small and the learning from each failure large. So as you try startups, be cognizant that what you're trying to do is learn as much as possible for the least amount of money and resources spent."

3. Embrace failure.

"Don't take failure lightly. Don't be afraid to fail. But that doesn't mean be casual about it. A license to fail isn't a license to not work hard."

4. Start your business for the right reasons.

"There are a lot of different valid goals. It may be important to not have to answer to somebody else. That's a reasonable goal. Maybe you want to make enough money to not have to balance your checkbook. Maybe you want to work with friends. All those are valid goals to be an entrepreneur. The trouble is when you confuse those goals."

5. Be flexible.

"The CEOs who make it a long way have a lot of flexibility and surround themselves with really great people. And really diverse people with multiple points of view. A good CEO's job is to build a team and make sure it stays on vision. A good CEO's job involves very little else."

6. Surround yourself with talent.

"If [entrepreneurs] want to build a kick-ass team, you know they'll start doing some interesting things. A company becomes the people it hires. If you're just using a bunch of consultants to get to a place, you're not going to build that team."

Most of all, when you fail, not if you fail, pick yourself up and dive in again with your next great idea. Don't let anything- -- especially a startup fail -- hold you back.

Related: Real Leaders Own Their Mistakes

Peter Daisyme

Entrepreneur Leadership Network® Contributor

Co-founder of Hostt

Peter Daisyme is the co-founder of Hostt, specializing in helping businesses host their website for free for life. Previously, he was co-founder of Pixloo, a company that helped people sell their homes online, which was acquired in 2012.

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