The Up Side of Down: A Book About Failure

upsidedownFailure. Or as Megan McArdle puts it – “deep, soul-crushing periods of misery following stupid mistakes that kept me awake until the small hours of the morning in a fog of anxiety and regret.” Yup, I’ve been there.

I was afraid that the new book The Up Side of Down: Why Failing Well Is the Key to Success was just going to tell me “don’t give up” over 300 pages. I read it anyway because I enjoyed reading some of the author’s other online articles (mentioned here, here), and I’m glad I did because the book actually looks at failure from a lot of interesting and different perspectives. While sorting through my notes, I managed to batch them into three larger themes:

You shouldn’t hate failure so much. “Keep on trying” is indeed one of the themes (just not the only one). Failure is often a critical part of success. As such, we really shouldn’t be so afraid of it assuming the potential result isn’t truly catastrophic.

  • There are very few entrepreneurs with multiple big successes. Instead, there are a lot of entrepreneurs with a lot of failures both before and after their single big success. The rest of us just never hear about the failures. As they say, “you only need to get rich once”.
  • Good judgment comes of experience – and experience comes from bad judgment!
  • This reminded me of that fact that a huge part of website development these days is little experiments and iteration. Not sure which is better? Try both (A/B test) and see. Try lots of small incremental changes and see what works. Fail and learn quickly.
  • When you ask people “What is the best thing that ever happened to you?” the answer is often a failure. A divorce that leads to a great new relationship. Hitting bottom and getting sober. Being fired from a steady but boring job, which forces you to help start a small business.
  • I just read an interview with Howard Marks, a famous investor and founder of Oaktree Capital (I also read his book). Even he got rejected from his dream job – “If it hadn’t been for that bit of bad luck, I could have spent 30 years at Lehman Brothers”.

Still, people really hate failure. It may be evolutionary, but people have developed many behavioral and cognitive biases to protect them from the pain of failure.

  • Finding a job can be soul-crushing because it involves repeated attempts and repeated failures. This is why many people give up and simply stop looking after a certain period of unemployment. The prospect of all those rejections is also why many people don’t start looking until their unemployment benefits are about to run out.
  • Normalcy bias is the tendency to act as if things are fine when they are obviously not. The long, gradual decline of General Motors is presented as an example until they were finally forced into bankruptcy (failure!) and is now making a comeback. This reminded me of Warren Buffett’s warnings about the upcoming crisis in municipal pension obligations.
  • Confirmation bias is the tendency to only see evidence that supports your theory and ignore any contradictory evidence. Book examples include the Dan Rather Killian documents controversy and the NASA Challenger disaster.
  • This reminded me of Charlie Munger and his principle of inversion (read his book too!). Always try to look at things backwards. For example, instead of looking for things that you should do to achieve a goal, consider making a list of things you would do to make sure you never reach that goal. Then make sure not to do those things.

Therefore, attitude is very important.

  • The people most likely to find work are the ones who keep trying every day (treating job-seeking as a job itself) and those who are willing to compromise (lower pay, move cities). Unemployment is like a big, dark room with just one exit. Only the ones who keep looking will get out (unless you’re really lucky). The idle will stay in the dark room forever.
  • Studies have found that successful people believe that outcomes depend on their decisions. The key word is believe. Even if it isn’t actually true that it is all about your personal decisions, it helps when you believe it is true.
  • In order to help make people have a better attitude, it is best for the system to “punish” failures with consistent, immediate corrections with an emphasis on rehabilitation rather than retribution. If people admit that they were wrong, let them fail, hit them with a penalty, but give them the chance to pick themselves back up.
  • The paradox of forgiveness. It has been helpful for this country to have bankruptcy as an option (as opposed to debtor’s prisons or lifelong servitude), but only because as a whole our country places a large stigma on bankruptcy and fewer people take that option than you would expect using cold math.

Comments

  1. I think you make a great point about believing in your decisions, even if it’s not actually true. Lots of people- especially those that value science over religion- don’t believe in free will. Stephen Hawking and Einstein, based on their knowledge of science, believe free will does not exist. (One example- our brains are made up of molecules that follow the laws of nature- which are fixed- and since we are physical entities- we cannot alter how our molecules move or override the laws of physics).

    This is really depressing to a lot of people. They worry it means life is meaningless, and this knowledge could cripple someone’s ambition, interests, or passions. Author Sam Harris notes that he thinks everything in his life is still important and refreshing, even if he knows he isn’t the author of his own thoughts or actions. It can be tricky, but it’s important to still find value in your own behavior even if you can recognize that free will doesn’t exist!

  2. “Studies have found that successful people believe that outcomes depend on their decisions.” Is this causation or just correlation? Couldn’t this be an example of confirmation bias?

    • Hmm… good question. This is a quote direct from the book:

      “Successful people… fell that outcomes mostly depend on what they do. People who believe that they can control their fate are more likely to have happy futures even if they’re wrong about the extent of their control.”

      I guess another counterpoint is that successful people could attribute their success mostly to luck, but they don’t.

  3. One of my favorite quotes recently: “Doubt kills more dreams than failure ever will.” I’m definitely someone who hates failure and often will avoid taking chances and risks so I don’t have the chance to fail. Not a good way to live your life…I’d prefer to live my life with no regrets.

  4. Unfortunately, being fired from a boring but steady job probably leads to homelessness more often than starting one’s own business.

    These days, people are 1 layoff or 1 sickness away from losing everything. We literally can’t afford to fail.

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