The Audacity of Massive Failure - If You Are Going to Fail in Business, Fail Big

It's become increasingly clear to me that if you are going to fail in business, you better make sure you fail as big and spectacularly as you can. There's really no sense in failing with a small business since large failure is much more respected and understood in the US.

Take the case of Lehman Brothers. It was a truly epic and spectacular failure as the largest bankruptcy in global history. For perspective, Lehman had $691 billion in assets. The next biggest bankrupty was Washington Mutual at $328 billion. Enron had assets of $65.5 billion.

It's now becoming clear that Lehman engaged in deceptive accounting practices at the best, and fraudulent behavior at the worst. According to a report issued by the Southern District Court of Manhattan on the bankruptcy:

"“Lehman employed off-balance sheet devices, known within Lehman as ‘Repo 105’ and ‘Repo 108’ transactions, to temporarily remove securities inventory from its balance sheet, usually for a period of seven to ten days, and to create a materially misleading picture of the firm’s financial condition in late 2007 and 2008.”

As far as I can tell, no Lehman execs are in handcuffs or are on the front page of the WSJ for these tranfressions.

Now, let's switch to Park Avenue Bank which was shut last Friday by the FDIC. The community bank which had $500 million in assets specialized in real estate loans and piled up $27 million in losses over the past year. Its CEO and President Charles J. Antonucci Sr. is accused of making false statements to regulators in an effort to obtain about $11 million from the U.S. government's Troubled Asset Relief Program.

There's a picture on the front page of the WSJ online of him being led out in handcuffs and looking frumpy and unshaven, wearing a red hoodie.

Now, this isn't the only example. I've noticed that the entrepreneurs behind the biggest failures, or the ones that lose venture capitalists the most money, are usually successful at raising money for another business. Those that have modest successes or lose a small amount are forgotten.

The bottom line is that society appreciates the audacity of failing big. To change the title of a book written by President Obama, our society respects the Audacity of Massive Failure.

So, if you are going to start something or do something, do it big. Because even if you fail, your massive failure will be viewed as a success in and of itself.

Sam Cass
Sam Cass: Sam Cass, MBA, JD, University of Texas at Austin. Always a fan of Leonardo Da Vinci.

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Comments

  • JRodgers

    March 16, 2010

    Our society encourages big failures and makes them possible. Heck, we've just exited a decade where anybody in California who was clean-shaven and can speak intelligibly could get a loan to buy a $1 million house without any paperwork.

  • Ridgelo

    March 17, 2010

    My father had a saying. If you think small you'll succeed or fail small. If you think big you'll succeed or fail big. Big risks entail the chance of big losses. Americans like big risks. It's part of the country's entrepreneurial spirit.

  • bankalchemist

    March 22, 2010

    His appearance is an act. He wants everyone to believe he is a regular joe just like every other working person who steals $11 million. Charles has been trying to weasel into bank ownership with no money of his own. At this level you begin to associate with investors that have their own agenda for "using the bank". He had sufficient knowledge of the workings and accounting within a bank to stay ahead of those who may be watching. He deserves the 260 years he purchased.

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