Even the most successful careers include a misstep or two. But instead of retreating when times get tough, the most resilient businesspeople embrace, analyze, and learn from their setbacks to bounce back stronger than ever.
We’ve all been there. That presentation you thought would knock the boss’s socks off? Backfired. That stock you thought would skyrocket? Plummeted. That expensive website redesign you thought would generate lots of new traffic? Didn’t. While the natural tendency may be to slink back to our caves and lie low after a setback, the savviest businesspeople face their failures head-on, gleaning valuable lessons from them that they can apply to their careers for even greater success in the future. As Winston Churchill is believed to have said, “Success is not final, failure is not fatal: it is the courage to continue that counts.”
Four highly accomplished alumni of Columbia Business School in New York City open up about their most difficult setbacks, explain how they recovered, and share the lessons they learned.
Alicia Thomas ’07
Six years ago, longtime exercise buff Alicia Thomas ’07 knew the fitness world was ripe for change. Startups were introducing concepts beyond the standard gym-membership model, from pay-per-class spin and yoga studios to in-office wellness programs. Bitten by the entrepreneurial bug, Thomas was introduced to a potential business partner through a friend, and the two launched KiwiSweat, which brought pop-up workouts with sought-after instructors to unique spaces around New York City. While the company debuted in early 2011 to much fanfare in outlets such as the New York Times, it folded just four years later. A misalignment of expectations between the co-founders was mostly to blame, Thomas says.
“When we started the business, advisors asked us, ‘Do you both want the same thing?’” she says. “I remember thinking, ‘Why do they keep asking us this? Does it really matter?’ We both really liked each other and wanted to start a business together. It sounded like such an irrelevant question. But fast-forward to four years later: it became a huge problem.”
The Setback
“I wanted to build a scalable business, while I think [my partner] was looking to build a business that fit within her lifestyle. For me, the business was my lifestyle. I got feedback from investors saying that it was obvious we wanted different things and that the partnership wouldn’t work. KiwiSweat did fail, but the failure wasn’t really the company; it was the fact that [my business partner and I weren’t aligned] that made it impossible to take the business past a certain point.”
The Rebound
In the summer of 2015, Thomas applied her knowledge of the fitness industry and her 10 years of web development experience to start a new endeavor. Dibs Technology allows fitness studios to use dynamic pricing — that is, real-time market rates — for their classes, meaning they can charge more for popular classes and offer discounts on others, depending on factors such as how far in advance the customer books. While dynamic pricing had existed for years — think about the last time you booked a flight online — it had never been applied to the fitness industry. Dibs incentivizes customers to try new classes and encourages positive behavior such as early booking, while helping studios maximize revenue without relying on heavy discounts, which can damage the brand. Widely publicized in the Wall Street Journaland other media outlets, Dibs has raised over $1 million in seed funding and already has 19 studio clients across five cities.
The Lesson
“If you’re building a business, the business has to come first. At Dibs, we never prioritize one person over the team, including myself. For example, there was one person who was consulting for us — a great, brilliant guy. But he wanted to remain a consultant. [As such,] he was not tied to the company’s success; he would be paid whether we won or lost. It became clear that the relationship would not work when I couldn’t afford to offer a prospective employee a more competitive salary because we were paying the consultant. And it hit me: I was making a hiring decision based on another person who’s not as committed to Dibs. I gave a proper offer to the prospective employee and phased out the consultant.”
Ron Doornink ’79
© John Davidson
In 2003, video-game publisher Activision was on a roll. Its Tony Hawk’s Pro Skater games were thriving, and it had just released the first installment of its widely acclaimed Call of Duty franchise. The company was working on its next big thing: an action-adventure game to rival a competitor’s popular Grand Theft Auto series. “We brought in a really talented group of people to develop this game where you could drive through the entire city of Los Angeles — something that nobody had ever done before,” explains Ron Doornink ’79, who was president of Activision and CEO of Activision Publishing at the time.
The game, True Crime, was intended for release in November 2003, in time for the holiday shopping season. But as the release date approached, Doornink faced a tough decision. “It wasn’t ready,” he says, noting that the polish on the game — making sure all the controls worked and that the user experience was robust and intuitive — was lacking. But many consumer-products makers count on December sales to meet their projected profit margins for the year. If Doornink pulled the game, Activision would miss its numbers. “So you have a choice: you can push this game out knowing that it’s marginal in terms of where you want it to be, or you can postpone it in the hopes that more time will make it better,” he says.
The Setback
“We were at the point where we thought more time wouldn’t necessarily produce higher quality. [I thought,] ‘What can I do that might influence the odds of the success of this game?’ One answer is you spend a lot of money — you will it to succeed. You say, ‘We will make this thing work by really smart marketing and spending enough money so that everybody knows about it.’ We went out there with that strategy. It didn’t work. The drivers in the gaming world are the hardcore gamers — people who play 40, 50, 60 hours a week. When they like something, the word gets out virally, and it drives success. We saw that the hardcore gamers were very mixed on the game. They were disappointed that it wasn’t as well polished as they expected it to be. They were disappointed that there wasn’t as much to be done in the game as they had expected. The game went out in early November, and by Thanksgiving we knew that it was not going to succeed. We missed our sales numbers that quarter.”
The Rebound
Helmed by Doornink, Activision went on to create many commercial hits, including the wildly successful Guitar Hero series. He served as chairman for Activision Publishing and its subsidiaries until 2012 and is now chairman of Turtle Beach, an audio technology company, as well as an operating partner at the private equity firm Stripes Group.
The Lesson
“You cannot will something to succeed if the fundamentals aren’t sound. In addition to being creative, innovative, and fun, you also need to deliver polish and an experience that [works]. We rethought our quality-assurance strategy — the way that the QA department works with the development teams and development timeline.”
Greg Stone, MS ’84
© Mark Ostow
As a three-time Emmy-nominated print and television journalist, Greg Stone, MS ’84 (’80JRN), had always created content that wows. He began his career as a writer at Time Inc. in New York, eventually becoming a TV reporter in Minneapolis, Boston, and on PBS before being offered an anchor position at CNN, which he turned down to found his own communications firm, Stone Communications, in 1989. Yet despite his success to that point, Stone had yet to apply his skills to one area he’d long wanted to pursue: film. “It was always my dream to do indies,” he says. “When I worked in news, I always looked at every news story I did as a mini movie. I’d get an assignment at nine or 10 o’clock in the morning and, by the end of the day, have to produce a 90-second or two-minute piece. I tried to hone my skills as a writer, producer, and director over the years.”
In 1995, he took the leap. Using his own money as well as investments from his personal and professional network, Stone produced Sentenced to Life, a film about abortion rights that he wrote and directed. “It was a documentary within a movie within a movie,” he explains. “It was the story of a filmmaker who’s trying to pitch a movie about the whole controversy to a studio, and it contained some interviews with real people who had direct experiences with the issue, with their sound bites sprinkled throughout as a sort of Greek chorus.” Despite sending the film to every distributor he could think of, Stone couldn’t get anyone to pick it up.
The Setback
[Sentenced to Life] really was a failure. There’s no other way to explain it. I’m proud of the film, but it was never released. I tried and tried and tried. I lost partly my own money, partly some investors’ money — people I know. That’s tough.”The Rebound
Stone built his communications and media-consulting firm into a thriving business, through which he has written and directed hundreds of productions ranging from 30-second commercials to documentary-style client videos. He continues to produce independent movies in his spare time, but he now approaches them differently. For example, for his next project — a mystery set in a movie theater — he is pooling resources with a screenwriter friend to share expenses, no longer relying on fundraising. “This time, I want to do it totally out of pocket. I finally said, ‘I’m just going to do it on my own.’”
The Lesson
“It was a very painful learning experience but a very deep learning experience. The problem with the film was that it didn’t take a position [on the abortion issue], and people couldn’t categorize it. Our society is one of taxonomy — we have to classify everything and everybody. In that respect, I think I needed to pay some attention to the market. I’ve also learned over the years to try to keep my emotions out of it. I talked to an advisor once who said, ‘The best hitters in baseball only hit the ball three times out of 10.’ If you strike out, say to yourself, ‘How did this happen?’ Adjust your swing. Adjust your stance. Don’t just sit there and say, ‘Oh, I struck out. I lost the game. Woe is me.’ Say, ‘OK, what do I do differently next time?’”
Jim Keyes ’80
© Dan Sellers
Having spent more than two decades as an executive at 7-Eleven, Jim Keyes ’80 knows how to weather a storm. During his tenure, he helped guide the convenience-store chain out of bankruptcy and into 36 consecutive quarters of revenue growth with a tenfold increase in equity value. It came as no surprise, then, that in 2007 Keyes took on the challenge of breathing new life into ailing video-rental company Blockbuster. Burdened by debt, a depressed stock price, and weak performance, Blockbuster was facing tough competition from new entrants to the field like Netflix and Redbox. Keyes saw an opportunity “to take one of the best-known brands in media entertainment and transform it from a physical presence into a digital presence,” he says, explaining that the goal was to create a video-content powerhouse that would dominate both the brick-and-mortar and online-streaming arenas. By September 2008, Keyes had helped Blockbuster increase its sales, bump up its debt rating with Moody’s and S&P, and purchase a digital-streaming company called Movielink, “which put us on the path for the strategic plan we were talking about,” he says.
And then, the financial crisis hit.
“In 2009 we were forced from being on the offense — trying to reposition the company strategically and leapfrog Netflix into streaming — into defensive mode,” he says, noting the company suspended its plans to convert to a digital-streaming business. This change in strategy resulted in one major missed opportunity.
The Setback
“Shortly after acquiring [Movielink], the next big question was the availability of content. At that time we had the opportunity to acquire, in an exclusive fashion, about 60 percent of the available subscription content on the market. So most of the content that you see on Netflix today would have been — could have been — acquired in an exclusive fashion for Blockbuster. In mid-2008, people were not yet streaming in significant volume, so the economic model was uncertain. The board of directors declined [the opportunity for] exclusivity in digital content. That was the single biggest opportunity that we missed. That is a decision I’d like to have back.”
The Rebound
Ultimately, because of the strong brand he had helped build at Blockbuster prior to the economic collapse, Keyes was able to orchestrate a sale of the company to Dish Networks in 2011, preserving 15,000 jobs — roughly 90 percent of Blockbuster’s workforce — and giving the brand “another chance of success by being a wholly owned subsidiary.” Keyes continued to serve as a senior advisor to Blockbuster until 2013, when the company shuttered its remaining stores, then he moved on to become chairman of organic food company Wild Oats Marketplace.
The Lesson
“Number one is the ability to respond to change. Change can be frustrating, it can be frightening, but it can also present tremendous opportunity. Business is not a ‘win-lose’ proposition. Instead, success in business is ‘win — or learn and adapt.’ The ability to adapt is the ultimate measure of success. The second lesson, which is probably just as important, is the ability to have the confidence to stay the course. When you find yourself having to deal with a tremendous amount of change, there ends up being a requisite amount of personal pressure. If you recognize what you’re trying to accomplish and you understand the strategy behind your moves — [even when] the press [or the public] hasn’t really seen or understood those strategies — then you have to have the confidence to weather the storm.”
This article was originally published in Columbia Business, Columbia Business School’s alumni magazine. Learn more about Columbia Business School.
