To make a new business into a success, you may feel pressure from a wide range of places and people, which can mean you end up compromising on something important. Other times you simply make the wrong call and regret it later. Errors in judgement often teach us a lot in the long run and any successful entrepreneurs will likely be able to recall the big mistakes of their careers.
While they may feel completely disastrous at the time, making mistakes can be useful for future progress. Here are five examples of well-known business people with some of the biggest errors they made and what they learned as a result.
(1) Elon Musk: Hiring the wrong people
When asked what his biggest mistake had been during a sterling career, the SpaceX founder floundered for a moment – not because he couldn’t think of one, but because there were so many and he was trying to work out which was the biggest one. Musk settled on his long-standing practice of hiring talented people without much thought for their characters. He said the biggest mistake was probably “weighing too much on someone’s talent and not someone’s personality. I think it matters whether someone has a good heart”.
It’s an interesting perspective when set against Richard Branson’s, who recently spoke about the value of hiring disruptive talent – specifically recruiting entrepreneurial people who may be a trouble to manage among other employees, but could be a worthwhile investment. The point remains that recruitment is of crucial importance to any business looking to get ahead – it’s worth spending time evaluating what qualities are most important to you and your business, and what effect hiring a specific person is likely to have on the firm and anyone else you’ve employed.
(2) Karren Brady: Rushing back to work too quickly
In a piece for the Guardian, Brady confessed that her greatest mistake was once taking a three-day maternity leave. “I had my daughter on a Wednesday and then went back to the office on Monday to sack a manager,” she admitted.
She said that 16 years ago, when her daughter was born, flexible working and the advancements in technology we’ve made hadn’t yet materialised, and quite simply, she “didn’t understand that a career lasts a lifetime”. She thought that if she didn’t get straight back to work, her career would suffer – that she’d be forgotten or could even lose her job.
Brady said she did things differently the second time around and would do things differently today too. “To be successful in business, you must not be afraid to make mistakes,” she pointed out. “And everyone makes their fair share of them.”
To become a respected and celebrated employer, Brady said it wasn’t enough to talk about flexibility and other notions, but “do them”. Those who are “genuinely flexible” stand a better chance of attracting the best people – and retaining them.
(3) Richard Branson: Inspiring competitors and not offering a different enough product
He’s a notorious jokester, but one of Richard Branson’s memorable pranks didn’t quite go to plan in 1986. In an exclusive published in Music Week magazine, he bragged about a secret invention of his called a Music Box which could store every song you wanted to listen to on a tiny device. Sound eerily like an iPod? Steve Jobs supposedly thought so too, and ribbed Branson, telling him the article helped inspire him in developing iTunes and the iPod.
“iTunes went on to change the music industry forever and resulted in the closure of Virgin Megastores,” Branson said. “Perhaps not acting upon my joke and creating the Music Box for real was my biggest mistake!”
He didn’t sweat the outcome too much however – a useful lesson in not getting so stuck on the idea that passed you by that you miss the next four that come your way. “Thankfully, the best things about ideas is that they are like buses – there’s always another one coming,” he said.
Branson’s other much-mentioned mistake was his ill-fated attempt to tackle multinational giant Coca-Cola with Virgin Cola. While he’s not at all against taking on a bigger company, Branson noted that if you’re going to take on a big name “you’ve got to be much better”. He acknowledged his product wasn’t differentiated enough – “I mean, two cans of cola – there’s not much of a difference there.”
(4) Arianna Huffington: Burning out too early
The founder of The Huffington Post said she’d love to tell her 20-year-old self to “stop worrying and get some sleep”. Huffington feels she “would have achieved whatever I achieved with less stress, less anxiety, less damage to my health and my relationships”. We hear the incessant debate over the work-life balance, but for an early-stage business, you can be putting in ungodly hours to run the firm.
Huffington said she wished she knew there would be “no trade-off between living a well-rounded life and my ability to do good work”. Creating time specifically for recharging and unplugging can help stress and exhaustion, while Huffington warned the biggest mistakes she made during her career came about as a result of burnout.
In 2007, she collapsed from exhaustion and lack of sleep, breaking her cheekbone as she hit the corner of her desk. It provided a necessary intervention for Huffington to reevaluate her lifestyle and reassess her priorities. Productive and impressive work can still be carried out alongside breaks for yourself – which may seem trickier to remember for a small business founder, but is a useful reminder to have.
(5) Warren Buffett: Thinking good management can trump anything and errors of omission
The renowned investor has made billions from his sensible approach to business – and regularly offers up advice from what he has learned during his time as Berkshire Hathaway’s CEO. He is well-known for his adherence to value investing, as well as being frugal in his own life. In his annual letters to shareholders, Buffett flags up numerous pearls of wisdom, including mistakes. One of the fundamental ones was appreciating that: “Good jockeys will do well on good horses, but not on broken-down nags.”
He pointed to Berkshire’s textile business and Hochschild Kohn’s, which he said both had “able and honest” people running them. In a business with good economic characteristics they would have established fine records, but “were never going to make any progress while running in quicksand”.
Similar to Musk’s hiring changes, Buffett also said that after some other mistakes, he now only goes into business with people he likes, trusts and admires. That in itself “will not ensure success”, but he feels a business owner can achieve wonders if they associate themselves with such people in businesses that possess decent economic attributes.
“We do not wish to join with managers who lack admirable qualities, no matter how attractive the prospects of their business. We’ve never succeeded in making a good deal with a bad person,” he said. Buffett feels when a brilliant management tackles a business with a reputation for bad economics, “it is the reputation of the business that remains intact”.
“I just wish I hadn’t been so energetic in creating examples.”
His other big mistakes tended to come from not making a purchase – the most famous of which was not purchasing Walmart stock that was going to work out incredibly well. His errors of omission meant Berkshire’s net-worth would have been at least $50bn higher if it had secured several opportunities it passed on in spite of them being virtually sure things.
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