Learning from business mistakes
Richard Branson and other big names of British business discuss the mistakes...
James Dyson, Dan Wagner, Martin Sorrell, Gerry Robinson, Richard Branson and Rita Clifton reveal the mistakes and missed opportunities they experienced over the course of their careers, and an insight into how they learned from them.
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I've made lots and lots of mistakes and loved all of them but, and don't forget I did nearly five and a half thousand prototypes to make my vacuum cleaner work, therefore four hundred and ninety nine were mistakes from which I learnt.
I mean they were frustrating but I learnt from them, so those are probably the greatest number of mistakes I've made, but I think the greatest mistake was to, having invented, developed and produced, made my vacuum cleaner, was trying to go and licence other companies with it thinking that they would want something new, something that innovated and did away with the horrible bag.
But of course they didn't, and I wasted eight years going around showing it them and you know they really wanted to have a look at it and, and if you like give them the intelligence on it, but none of them wanted it and I wasted eight years of my valuable patent life doing that.
Another mistake I made with the wheelbarrow company when I was making the Ballbarrow was in assigning my patent to the company but I didn't control the company so I really got no value therefore for my invention.
It suddenly became the company's property and I wasn't a majority shareholder in the company and so I couldn't control what the company did or what they did with my patent so I vowed never ever again to do that. It's all right to assign the patent to the company if you own a hundred percent of the company uh but otherwise you should receive proper value for assigning your patent, your invention.
Because on the whole companies don't value inventions and patents and people who make them. They value other people in the business but not the inventors who really make the company successful.
Brent Hoberman came to see me offering me 50% of lastminute.com for just a million pounds, which of course I had to turn down, unwisely in hindsight, because it didn’t seem to me at that time that I could value a start up for 2 million pounds which at the time had nothing.
The same is true unfortunately of the founder of eBay who worked for me in California and offered me a share of his business for a million dollars, for 30%, which today would be worth in excess of 20 billion pounds. I have to say that I’m guilty of not taking advantages of those opportunities but if you... well, hindsight is a great thing and for everyone of those I must have had many others that would’ve just been a waste of money.
It’s difficult I think to accept how valuations were derived for businesses back then when although the opportunity may have been large on the back of an idea, the making that a reality requires a great deal of experience and capability as a business person, which wasn’t always the case with these entrepreneurs.
Every day I'm sure I make mistakes, every day I'm sure that people in the hundred and forty thousand people inside WPP make mistakes and they should go on making mistakes because if they didn't make any mistakes they'd never take any risks, right?
Which I think is very important, and people will accuse us of being too risk adverse. They would say we're too bureaucratic, we've got too many systems, we've got too much process and that prevents people from being entrepreneurial, often by the way they mean autonomous, autonomous means leave me alone, give me a target and leave me alone, entrepreneurial means taking a risk.
They say they're being entrepreneurial but they're not taking risks with their own money. Entrepreneurial means taking a risk with your own money. So listen everybody should make mistakes and, and I hope the benefit of this program is not to do, to discourage, or sort of say look these are the mistakes and to punish those people who've made a lot of mistakes, that would be ridiculous.
It's healthy to make mistakes. It's not unhealthy and every day we make them. Hopefully they're not big ones and the trick is to make more good decisions than bad decisions.
You know, for me, probably one of the biggest nightmares, and it was right at the end of my time at Granada, was what happened with On Digital which was a competitor for Sky. You know, at the time everything in me said we shouldn't... we really, really shouldn't be doing this and that came about because of an undue weight given to a competitor. Sky were actually talking to Carlton Television at the time.
And we heard about it and thought: we should be in on that, and we got involved in the competition, and I think it was more driven by that than what I would have called the 'cold bucket of water' moment where you ask, you actually asked yourself, because I honestly thought that we were going to struggle to come up against Sky to find something that we could really make stick against Sky on either the sport side or the film side in any serious way, and that it probably wouldn't work. And that's always dangerous because you are always smart afterwards, but I honestly feel I thought at that time: well, I should have stopped it, and I didn't; and it didn't work.
As an entrepreneur if you don't a mistake, you don't make anything. So, you know, so you've got to try lots of things. I've missed lots of things. We were offered 49% of RyanAir, in exchange for a tiny little airline we had in Brussels. We wanted 50%. It's cost us a few million a few billion actually (laughs).
Somebody rang up and said there was this great game in Canada, you've got to jump on a plane and go and sign the rights. I was meant to go on the Wednesday, I delayed till the Friday, and on the Thursday they signed the rights to somebody else, and that was trivial pursuits.
So, anyway, we've had lots of fun, lots of near misses, but fortunately we've had a few successes as well.
Well I guess over the years I've had a few not great days at the office, but the incident that is still the one that makes me wake up going, ahh, like that, which I guess we all have from time to time was one actually that took - took place several years ago in fact before even I was doing the job at Interbrand, I was at Saatchi and Saatchi, and to cut a very long story pretty short, Maurice Saatchi had asked me to commission some research on behalf of one of his business contacts. I commissioned the research it all seemed to be fine, I was very busy, I thought I'm just going to fix up a research debrief and arrive and we can have a conversation with the client about what all that means and what we should do.
Anyway, I come into the research debrief, and the first thing that the research company said was, there's been a problem with the research and it doesn't prove the point that you were hoping to prove. This was the first time I had heard that. And what's more, Maurice's business contact turned to me and said, what you mean you've taken our money and the research hasn't even worked?
Now there were a number of things wrong with that and he was so angry it still gives, gives me the screaming abdabs. A number of things were wrong with that, number one is I hadn’t kept my eye on it properly; number two, I had assumed that things would be okay; and number three, I hadn’t even created the right expectations with this gentleman that actually I was commissioning research as opposed to I was doing it, so of course he held me entirely responsible.
Not an unfair thing I have to say - so, my lesson for the future is, never assume, never assume that anyone is going to know exactly what to do, never assume that people know exactly what your role is in anything, and never assume that just showing up to a meeting is going to be okay. Check, check, check and check again if you don't want to be waking up in twenty years' time in a cold sweat.
Copyright & revisions
Originally published: Tuesday, 19th April 2011
Last updated on: Tuesday, 19th April 2011
- Body text - Copyright: The Open University
- Video - 1: Copyrighted
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