“If you’re going to pursue difficult goals, you’re inevitably going to fall short sometimes. It’s one of the costs of ambition.” I repeatedly recite this line from What It Takes by Steve Schwarzman when I’m talking with anyone about hitting ambitious targets. If you’re not occasionally failing, then it’s unlikely you’re pushing yourself far enough. Think about this in the context of exercising - if you don’t push your muscles to the point of failure, they don’t repair to a stronger state. Failure has also been the topic of two of my favorite pieces of content lately. On a recent Tim Ferris podcast, Danny Meyer, founder and CEO of Meyer Restaurant Group -which includes ShakeShack - shared the story of his first failed restaurant, Tabla. Ironically, Meyer asked himself and his staff “what if we could be known for how well we closed a restaurant?” What if we fail as well as we succeed? The result was surprisingly phenomenal. Tabla didn’t just hold job fairs for effected staff, but instead invited chefs and managers of other restaurants work a shift at the restaurant to see the staff in action. They hosted three fundraisers for causes the staff cared about to keep the restaurant full. They brought in famous Indian chefs to raise money for earthquake victims in India. By the time the restaurant closed, the staff had jobs, the landlord didn’t miss a single payment, and investors got their money back plus some. Meyer is known for his relentless pursuit of hospitality and treating people the right way. Exhibiting these qualities when things are going well is easy, doing it when things are hard is difficult and differentiated. Kyle Harrison from Contrary recently wrote a great post on the hype and hot air of venture investing which explored why investors are reluctant to admit and learn from failures. It highlights one of the worst things about venture as a whole. and one of the best things about Energize at the same type. In a business that is all about taking credit for a deal, admitting failure is the exact opposite. So, for most investors, the goal is actually to distance themselves from failure for fear of ruining their track record. John, our managing partner has written on why we don’t have track records at Energize (INSERT LINK) and this is another upside - we don’t run from failures, instead we work to not make the same mistake twice. The less time we spent with failure, and failure can even mean things not going as planned, the less comfortable we become with it. If we aren’t comfortable with failure, we aren’t comfortable with learning and that’s the worst trait any investor can have. Charlie Munger has long been one of my favorite investors as so many of his principals apply to all markets. In the 1985 Berkshire Hathaway annual letter, Buffet highlights Charlie’s ability to emphasize the study of mistakes over success both in business and in life. Charlie’s famous for saying, “All I want to know is where I die so I’ll never go there.” You can’t know where “there” is without studying the instances where companies die. Berkshire and the firms I admire most are known for their transparency, I believe that transparency creates trust and trust creates permanent investible capital to take advantage of all market cycles. The market is full of failure it right now and it could potentially get worse before it gets better. To compound on it, we have a generation of investors and operators who’ve never seen a down market. The good thing about tough markets is that they create the opportunity to come out stronger on the other side, just like the muscle that’s been pushed past the point of failure. Handling failure in the moment is hard, but like anything else, if you have a framework to do so. For me that framework is simple, but simple doesn’t mean easy. Go above and beyond to treat people well in your moments of failure, and theirs. Be honest with yourself, study your mistakes and ask for feedback on where you failed. Don’t make the same mistake twice. Be transparent as early as possible with your team and stakeholders. It creates trust and the possibility of new solutions that can be enacted before it’s too late. Here’s to hoping we all face a minimal amount of failure in our lives and careers, but just enough that proves our goals are worthy of chasing!