What a $9 Million Failure Taught Me About Taking Smarter Risks

I'm going to tell you about the most expensive education I ever received. It cost me $9 million, two years of my life, and nearly destroyed my confidence. But it also taught me more about taking smart risks than a decade of success ever could.

This isn't just a startup story. It's about the fundamental mistakes in thinking that can derail any ambitious project, whether you're a founder or a leader within a large organization.

In 2007, I had what seemed like a perfect business opportunity. Early sales were strong, investors were interested, and every metric suggested we were building something significant. So I did what many ambitious people do: I scaled everything. Bigger team, bigger vision, bigger promises. Within 18 months, we had contracts worth $9 million. From the outside, we looked like a massive success. On the inside, we were making three critical errors.

The Mistakes That Matter in Any Career

The business ultimately failed, but not because of market changes or competitors. It failed because of flawed thinking that applies to any high-stakes project.

1. Confusing Activity with Impact: We were generating millions in revenue, which made me feel successful. But our costs were higher than our revenue. I was so focused on the vanity metric of growth that I ignored profitability. In any role, it's easy to get addicted to being busy and creating impressive-looking reports, but none of it matters if you're not moving the needle on the outcomes that truly count.
2. Building for the Vision, Not the Reality: I wanted to build a sophisticated technology company. But our customers just wanted simple solutions to immediate problems. I spent millions building capabilities they didn't value. This happens all the time in corporate settings—a team builds a complex, "perfect" solution that stakeholders ignore because a simpler, "good enough" fix would have sufficed.
3. Letting Fear Drive the Wrong Decisions: Having survived a spectacular failure, I was no longer afraid of it. This new relationship with risk is key to Taking Action Despite Fear. It allows for clearer, more calculated decisions on future projects.

The Psychological Aftermath

The financial loss was devastating, but the psychological impact was worse. Failure on that scale forces a difficult, identity-level change. It's a painful process, but learning how to navigate that internal turmoil is an essential part of Overcoming Change Anxiety. You have to separate the lessons from the shame to move forward.

What I eventually learned is that this experience didn't make me a "failure." It made me "failure-hardened."

The Advantages of "Failure-Hardened" Experience

The business I built after that failure was more successful because I wasn't making the same expensive mistakes. But the real benefit was psychological.

• Accurate Risk Assessment: You learn the difference between a recoverable risk and one that can destroy everything.
• Customer-Centric Focus: You learn that stakeholder satisfaction matters more than internal metrics.
• Emotional Resilience: You can handle setbacks that would devastate someone with a "perfect" track record.

The goal shouldn't be to avoid failure—it should be to fail intelligently, recover quickly, and apply the lessons. The best way to do this is to take smaller, smarter risks. Don't bet your entire career on one massive project. Instead, run small pilots and test ideas in ways that the lessons are cheap and the potential upside is huge.

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FSTEP is designed to be a training ground for taking smarter risks. You'll practice in small, career-safe ways that build the resilience needed for bigger challenges. Learn more about the 6-week FSTEP program.

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