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On the Success of Failure

“You did not respect your end of the contract either. You took a few days off during the acceleration program, clearly you did not deliver on your promise of adding value to my startup!” were a founder’s famous last words to my exasperated partner as he tried to rationalize breaking his word. He was reneging on a contract to pledge advisory shares to our organization in return for participating in our acceleration program. His startup was taking off; he got greedy.

It is difficult to find a highly successful individual who attributes a big part of their achievements to that time when she broke a promise, walked away from a contract or betrayed a partner. Yet it seems that people mistake these unethical actions as early tough choices a leader faces. Too many urban legends intertwine impactful personalities with ruthlessness just as too many large fortunes in developing economies are from shady beginnings. In societies around Latin America that turn the other cheek to corruption, ‘the end justifies the means’ is business-as-usual and influences founders and investors to act unethically.

The entrepreneurial journey should be different.

For one, luck is the most cited reason of success by entrepreneurs. Some may call it false humility but in my opinion it is completely true. Being in the right place at the right time explains many of the largest wins in our ecosystems. One of our best financed founders got a check from a new and promising VC that moved onto his street. Another had her best 10 minutes of the year while pitching to YC. Others got a big break due to an environmental emergency or the outcome of a presidential election. Luck is the cornerstone of entrepreneurial success. Following your passion makes you lucky. Showing up makes you lucky. Preparation makes you lucky. Social networks make you lucky. Hard work makes you lucky.

Next in line for reasoning success are contacts. Some trace the start of a transformational story back to finding a co-founder in a long-time friend, a spouse or a sister. It can be a more fortuitous encounter: a team member in hackathon, a classmate or a colleague during an internship. It may also happen when you have already started your endeavor. An early investor, a mentor or a client can potentially change the future of a startup. In our hyperactive Mexican ecosystem, we all seem to meet a great share of people every week. Unfortunately, the sum of all small talk always falls short of a good conversation. Important things happen when you slow down and truly listen to each other. And yes, you may already know the person who will help you build a great company.

Finally, some explain victory because of their sheer perseverance and determination despite facing high odds. In recent years, the Mexican ecosystem has made progress in fostering a culture that accepts failure. More and more entrepreneurs are starting new companies, all willing to take a different amount of risk. Most agree that truly innovative projects appear riskier both to founders and investors. After investing in dozens of startups overthe past five years, our conclusion is different. Innovative projects tend to fare better than ‘safer’-deemed bets such as copy cats. Once you decide to launch down this path, you may want to go for that impossible bet. If founders and investors persevere in taking on more innovative endeavors, the next great startup might very well be a ‘unicornio’.

At the end of the day, you may succeed at your first try, after several intents or never. What matters most is how you got there. Not only because it is the basis of your reputation, your most valuable asset, but because you areyour own actions: how you treat your team and employees; how you reciprocate the trust that investors invested in you. Most importantly, your actions reflect on your community, country and culture. In the end, if luck did not suffice, if your willingness to face risk was not enough, you can still be that someone of someone else’s success story. You can be the lucky break of the next true leader.

Successful or not, that’s who I strive to become.

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I write about my work as an investor, a lecturer, and a mentor. In general, musings about Latin American tech, VC and life.

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