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The Art of Failing Well Admitting mistakes is how we stretch and grow. Make the most of these critical learning opportunities.

By Austin McChord Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.


To paraphrase a great writer, I believe all successes are alike but each failure is instructive in its own way. When we mess up -- when we get it wrong or falter -- we learn a lesson. If we have some brains and some grit we emerge stronger, smarter and better for the experience.

That's why I'm writing openly and proudly about the one thing most CEOs of billion-dollar companies assiduously avoid mentioning: my failures and the lessons I learned from each.

Never rush to market.

Early in my company's history, a competitor released a product we thought we could improve upon. So we did what many red-blooded startups would do: We quickly came up with our own version. Too quickly, as it turned out. Our new release was so hasty and imperfect, it disappointed some of our longest-running customers and nearly put us out of business.

We recovered, studied our mistakes, fixed them and eventually launched a product so good that it still accounts for a very large part of our business. The lesson, however, was clear as can be: Your reputation is everything. Never release a product unless it's 100 percent ready for market.

Related: 18 Ways to Bounce Back from Failure

Your clients might not be who you think they are.

A company must find a strong and sustainable client base that enables it to grow. I didn't know how to do that -- at least not at first. I thought my data backup and security device was the sort of thing small businesses needed, and I focused on marketing directly to them. It was painstaking work.

Without a chance call from an IT service provider, I'm not sure we could've outgrown my dad's basement. That call opened my eyes to an entirely new possibility. Selling in bulk to IT providers made perfect sense because they manage technology needs for many individual businesses. When it comes to figuring out who your clients are, your first hunch -- however logical -- might not be the right one.

Don't lose sight of your vision.

I started Datto because I wanted to make sure small businesses had the same continuity solutions the big boys enjoyed. I knew it was equally important for small-business owners to keep their data secure, backed up and available. But four years into the company's existence, I still was far from reaching my goal. A very large corporation, impressed by how we'd helped businesses recover after Hurricane Sandy, offered me $100 million for my company.

I called my lawyer. He said even if selling was a mistake, I could spend the rest of my life regretting it from a beach on my own private island. I almost believed him. After all, a nine-figure check is a difficult thing to turn down. But it would've been the biggest mistake I've ever made. Instead I wised up, turned down the deal and watched my company's value increase tenfold. I've never made a better decision in my life.

Related Book: Fueled by Failure by Jeremy Bloom

Crave customer feedback.

As a small startup, we took pride in getting things done quickly and nimbly. Sometimes, this meant we didn't always listen to customers' detailed comments. Our early products suffered greatly as a result.

This misstep stayed with me. So much so that we now have a dedicated customer advisory council. We spend a great deal of time thinking about every bit of feedback that comes our way. This feedback loop has led to not only only better products but also new ones. For example, customer complaints about network outages motivated us to develop a DNA router that addresses the problem. If we hadn't listened to the people who matter most, we never would've gained the insight we needed to provide a solid solution.

Related: To Sell or Not to Sell? 6 Steps to Take to Answer This Question

I think about my mistakes daily, but never bitterly or with anger. They've taught me everything I know and have prepared me for my most exhilarating and trying role: entrepreneur.

Austin McChord

Founder and CEO of Datto Inc.

Austin is the chief innovator and driving force behind Datto. He has a degree in Bioinformatics from Rochester Institute of Technology, and holds several patents. In 2014 he was named a Finalist for Ernst & Young Entrepreneur of the Year, as well as named a CRN Top 25 Innovator and a CRN Top 50 Midmarket IT Vendor Executive. Austin sits on the Board of the Connecticut Technology Council.

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