WEBVTT

00:00:00.269 --> 00:00:03.420
[This talk contains mature language
Viewer discretion is advised]

NOTE Paragraph

00:00:03.897 --> 00:00:08.600
If we traveled back to the year 800 BC,

00:00:08.624 --> 00:00:12.403
in Greece, we would see
that merchants whose business has failed

00:00:12.427 --> 00:00:16.776
were forced to sit in the marketplace
with a basket over their heads.

00:00:17.815 --> 00:00:19.561
In premodern Italy,

00:00:19.585 --> 00:00:22.982
failed business owners,
who had outstanding debts,

00:00:23.006 --> 00:00:26.791
were taken totally naked
to the public square

00:00:26.815 --> 00:00:30.457
where they had to bang their butts
against a special stone

00:00:30.481 --> 00:00:32.822
while a crown cheered at them.

00:00:34.013 --> 00:00:36.807
In the 17th century in France,

00:00:36.831 --> 00:00:40.647
failed business owners were taken
to the center of the market,

00:00:40.671 --> 00:00:44.003
where the beginning of their bankruptcy
was publicly announced.

00:00:44.427 --> 00:00:47.676
And in order to avoid
immediate imprisonment,

00:00:47.700 --> 00:00:49.776
they had to wear a green bonnet

00:00:49.800 --> 00:00:53.291
so that everyone knew they were a failure.

NOTE Paragraph

00:00:53.879 --> 00:00:57.220
Of course, these are extreme examples.

00:00:57.244 --> 00:00:59.315
But it is important to remember

00:00:59.339 --> 00:01:02.644
that when we excessively
punish those who fail,

00:01:02.668 --> 00:01:05.819
we stifle innovation
and business creation,

00:01:05.843 --> 00:01:09.463
the engines of economic growth
in any country.

00:01:10.498 --> 00:01:15.861
Time has passed, and today we don't
publicly humiliate failed entrepreneurs.

00:01:16.235 --> 00:01:19.638
And they don't broadcast
their failures on social media.

00:01:20.228 --> 00:01:25.672
In fact, I think that all of us can relate
with the pain of failure.

00:01:25.696 --> 00:01:28.720
But we don't share the details
of those experiences.

00:01:29.101 --> 00:01:33.466
And I totally get it, my friends,
I have also been there.

NOTE Paragraph

00:01:33.490 --> 00:01:35.142
I had a business that failed

00:01:35.166 --> 00:01:38.603
and sharing that story
was incredibly hard.

00:01:38.919 --> 00:01:44.291
In fact, it required seven years,
a good dose of vulnerability,

00:01:44.315 --> 00:01:46.315
and the company of my friends.

00:01:46.998 --> 00:01:48.665
This is my failure story.

00:01:49.458 --> 00:01:54.395
When I was in college, studying business,
I met a group of indigenous women.

00:01:54.419 --> 00:01:59.760
They lived in a poor rural community
in the state of Puebla, in central Mexico.

00:01:59.784 --> 00:02:02.664
They made beautiful handmade products.

00:02:03.133 --> 00:02:06.069
And when I met them and I saw their work,

00:02:06.093 --> 00:02:08.187
I decided I wanted to help.

NOTE Paragraph

00:02:08.878 --> 00:02:12.179
With some friends, I co-founded
a social enterprise

00:02:12.203 --> 00:02:16.021
with the mission to help the women
create an income stream

00:02:16.045 --> 00:02:18.312
and improve their quality of life.

00:02:19.085 --> 00:02:21.839
We did everything by the book,

00:02:21.863 --> 00:02:24.505
as we had learned in business school.

00:02:24.529 --> 00:02:25.931
We got investors,

00:02:25.955 --> 00:02:31.242
we spent a lot of time building
the business and training the women.

00:02:31.641 --> 00:02:34.982
But soon we realized we were novices.

00:02:35.434 --> 00:02:38.712
The handmade products were not selling,

00:02:38.736 --> 00:02:43.426
and the financial plan we have made
was totally unrealistic.

00:02:43.450 --> 00:02:47.776
In fact, we worked
for years without a salary,

00:02:47.800 --> 00:02:50.075
hoping that a miracle would happen,

00:02:50.099 --> 00:02:52.760
that magically a great buyer would arrive

00:02:52.784 --> 00:02:55.526
and she would make
the business profitable.

00:02:55.855 --> 00:02:57.988
But that miracle never happened.

NOTE Paragraph

00:02:58.926 --> 00:03:01.720
In the end, we had to close the business,

00:03:01.744 --> 00:03:04.045
and that broke my heart.

00:03:05.014 --> 00:03:08.281
I started everything to create
a positive impact

00:03:08.305 --> 00:03:10.172
on the life of the artisans.

00:03:10.476 --> 00:03:12.913
And I felt that I have done the opposite.

00:03:13.786 --> 00:03:16.081
I felt so guilty,

00:03:16.105 --> 00:03:18.417
that I decided to hide this failure

00:03:18.441 --> 00:03:22.164
from my conversations
and my resume for years.

00:03:22.934 --> 00:03:25.379
I didn't know other failed entrepreneurs

00:03:25.403 --> 00:03:28.670
and I thought I was
the only loser in the world.

NOTE Paragraph

00:03:30.307 --> 00:03:34.768
One night, seven years later,
I was out with some friends

00:03:34.792 --> 00:03:38.307
and we were talking
about the life of the entrepreneur.

00:03:38.331 --> 00:03:41.609
And of course, the issue
of failure came out.

00:03:42.307 --> 00:03:46.593
I decided to confess to my friends
the story of my failed business.

00:03:46.903 --> 00:03:49.347
And they shared similar stories.

00:03:49.680 --> 00:03:54.958
In that moment, a thought
became really clear in my mind:

00:03:54.982 --> 00:03:57.315
all of my friend were failures.

NOTE Paragraph

00:03:57.339 --> 00:03:58.489
(Laughter)

NOTE Paragraph

00:03:59.276 --> 00:04:02.973
Being more serious,
that night I realized that

00:04:02.997 --> 00:04:06.450
A: I wasn't the only loser in the world,

00:04:06.474 --> 00:04:10.514
and B: we all have hidden failures.

00:04:10.538 --> 00:04:12.638
Please tell me if that is not true.

00:04:14.297 --> 00:04:17.875
That night was like an exorcism for me.

00:04:17.899 --> 00:04:22.869
I realized that sharing your failures
makes you stronger, not weaker.

00:04:23.450 --> 00:04:25.776
And being open to my vulnerability

00:04:25.800 --> 00:04:30.188
helped me connect with others
in a deeper and more meaningful way,

00:04:30.212 --> 00:04:34.279
and embrace life lessons
I wouldn't have learned previously.

00:04:35.220 --> 00:04:37.292
As a consequence of this experience

00:04:37.316 --> 00:04:40.653
of sharing stories
of businesses that didn't work,

00:04:40.677 --> 00:04:43.088
we decided to create a platform of events

00:04:43.112 --> 00:04:46.169
to help others share
their failure stories.

00:04:46.193 --> 00:04:48.326
And we called it Fuckup Nights.

NOTE Paragraph

00:04:49.577 --> 00:04:53.109
Years later, we also created
a research center

00:04:53.133 --> 00:04:54.942
devoted to the story of failure

00:04:54.966 --> 00:04:58.990
and its implications on business,
people and society

00:04:59.014 --> 00:05:03.705
and as we love cool names,
we called it the Failure Institute.

00:05:04.854 --> 00:05:07.077
It has been surprising to see

00:05:07.101 --> 00:05:10.251
that when an entrepreneur
stands on a stage

00:05:10.275 --> 00:05:12.347
and shares a story of failure,

00:05:12.371 --> 00:05:15.520
she can actually enjoy that experience.

00:05:15.544 --> 00:05:19.528
It doesn't have to be a moment
of shame and embarrassment,

00:05:19.552 --> 00:05:21.306
as it used to be in the past.

00:05:21.774 --> 00:05:24.266
It is an opportunity
to share lessons learned

00:05:24.290 --> 00:05:25.647
and build empathy.

00:05:26.125 --> 00:05:27.579
We have also discovered

00:05:27.603 --> 00:05:32.295
that when the members of a team
share their failures, magic happens.

00:05:32.673 --> 00:05:36.750
Bonds grow stronger
and collaboration becomes easier.

NOTE Paragraph

00:05:37.671 --> 00:05:39.917
Through our events and research projects,

00:05:39.941 --> 00:05:42.600
we have found some interesting facts.

00:05:42.624 --> 00:05:46.873
For instance, that men and women
react in a different way

00:05:46.897 --> 00:05:48.897
after the failure of a business.

00:05:49.347 --> 00:05:52.236
The most common reaction among men

00:05:52.260 --> 00:05:56.101
is to start a new business
within one year of failure,

00:05:56.125 --> 00:05:57.858
but in a different sector.

00:05:58.284 --> 00:06:01.061
While women decide to look for a job

00:06:01.085 --> 00:06:03.831
and postpone the creation
of a new business.

00:06:04.251 --> 00:06:06.492
Our hypothesis is that this happens

00:06:06.516 --> 00:06:10.823
because women tend to suffer more
from the impostor syndrome.

00:06:10.847 --> 00:06:15.807
We feel that we need something else
to be a good entrepreneur.

00:06:15.831 --> 00:06:21.318
But I have seen that in many, many cases
women have everything that's needed.

00:06:21.704 --> 00:06:24.029
We just need to take the step.

00:06:24.680 --> 00:06:26.212
And in the case of men,

00:06:26.236 --> 00:06:30.514
it is more common to see that they feel
they have enough knowledge,

00:06:30.538 --> 00:06:35.121
and just need to put it in practice
in another place with better luck.

NOTE Paragraph

00:06:35.958 --> 00:06:38.403
Another interesting finding has been

00:06:38.427 --> 00:06:43.091
that there are regional differences
on how entrepreneurs cope with failure.

00:06:43.735 --> 00:06:46.089
For instance, the most common reaction

00:06:46.113 --> 00:06:49.445
after the failure of a business
in the American continent

00:06:49.469 --> 00:06:51.148
is to go back to school.

00:06:51.680 --> 00:06:55.934
While in Europe, the most common reaction
is to look for a therapist.

NOTE Paragraph

00:06:55.958 --> 00:06:58.593
(Laughter)

NOTE Paragraph

00:06:58.916 --> 00:07:02.932
We're not sure which is a better reaction
after the failure of a business,

00:07:02.956 --> 00:07:07.170
but this is something
we will study in the future.

00:07:08.053 --> 00:07:11.085
Another interesting finding has been

00:07:11.109 --> 00:07:16.208
the profound impact that public policy
has on failed entrepreneurs.

00:07:16.784 --> 00:07:19.356
For instance, in my country, in Mexico,

00:07:19.380 --> 00:07:22.633
the regulatory environment is so hard,

00:07:22.657 --> 00:07:27.390
that closing a business can take you
a lot of time and a lot of money.

NOTE Paragraph

00:07:27.704 --> 00:07:29.839
Let's begin with the money.

00:07:30.419 --> 00:07:32.352
In the best possible scenario,

00:07:32.376 --> 00:07:34.966
meaning you don't have
problems with partners,

00:07:34.990 --> 00:07:37.680
providers, clients, employees,

00:07:37.704 --> 00:07:39.776
in the best possible scenario,

00:07:39.800 --> 00:07:43.985
officially closing a business
will cost you 2,000 dollars.

00:07:44.009 --> 00:07:46.088
Which is a lot of money in Mexico.

00:07:46.112 --> 00:07:48.335
Someone who earns the minimum wage

00:07:48.359 --> 00:07:51.959
would have to work for 15 months
to save this amount.

00:07:52.596 --> 00:07:54.663
Now, let's talk about the time.

00:07:55.147 --> 00:07:58.393
As you may know, in most
of the developing world,

00:07:58.417 --> 00:08:02.504
the average life expectancy
of a business is two years.

00:08:03.196 --> 00:08:08.807
In Mexico, the process of officially
closing a business takes two years.

00:08:09.744 --> 00:08:13.395
What happens when the average
life expectancy of a business

00:08:13.419 --> 00:08:18.432
is so similar to the time it will take you
to close it if it doesn't work?

00:08:19.149 --> 00:08:22.166
Of course, this discourages
business creation

00:08:22.190 --> 00:08:24.190
and promotes informal economy.

NOTE Paragraph

00:08:24.863 --> 00:08:27.435
In fact, econometric research has proved

00:08:27.459 --> 00:08:32.942
that if the process of declaring
bankruptcy takes less time and less money,

00:08:32.966 --> 00:08:35.688
more new firms will enter the market.

00:08:36.506 --> 00:08:39.317
For this reason, in 2017,

00:08:39.341 --> 00:08:42.768
we proposed a series
of public policy recommendations

00:08:42.792 --> 00:08:47.109
for the procedure of officially
closing businesses in Mexico.

00:08:47.133 --> 00:08:48.791
For a whole year,

00:08:48.815 --> 00:08:52.149
we worked with entrepreneurs
from all over the country

00:08:52.173 --> 00:08:53.601
and with Congress.

00:08:53.625 --> 00:08:57.307
And the good news is that we managed
to help change the law.

00:08:58.247 --> 00:08:59.442
Yay!

NOTE Paragraph

00:08:59.466 --> 00:09:02.482
(Applause)

NOTE Paragraph

00:09:02.506 --> 00:09:06.220
The idea is that when
the new regulation comes into force,

00:09:06.244 --> 00:09:11.330
entrepreneurs will be able to close
their businesses in an online procedure

00:09:11.354 --> 00:09:13.798
that is faster and inexpensive.

NOTE Paragraph

00:09:15.442 --> 00:09:16.632
(Sighs)

NOTE Paragraph

00:09:16.656 --> 00:09:18.867
On the night we invented Fuckup Nights,

00:09:18.891 --> 00:09:23.376
we never imagined that the movement
would grow this big.

00:09:24.173 --> 00:09:26.291
We are in 80 countries now.

00:09:26.744 --> 00:09:29.553
In that moment, our only intention

00:09:29.577 --> 00:09:32.644
was to put the topic
of failure on the table.

00:09:32.966 --> 00:09:36.681
To help our friends see that failure
is something we must talk about.

00:09:36.705 --> 00:09:41.276
It is not a cause of humiliation,
as it used to be in the past,

00:09:41.300 --> 00:09:44.433
or a cause of celebration,
as some people say.

00:09:44.943 --> 00:09:47.847
In fact, I want to confess something.

00:09:48.806 --> 00:09:52.988
Every time I listen
to Silicon Valley types or students

00:09:53.012 --> 00:09:58.640
bragging about failing fast and often
like it's no big deal, I cringe.

00:09:59.464 --> 00:10:04.395
Because I think that there is a dark side
on the mantra "fail fast."

NOTE Paragraph

00:10:05.036 --> 00:10:09.355
Of course, failing fast
is a great way to accelerate learning

00:10:09.379 --> 00:10:10.912
and avoid wasting time.

00:10:11.244 --> 00:10:14.791
But I fear that when
we present rapid failure

00:10:14.815 --> 00:10:17.655
to entrepreneurs as their
one and only option,

00:10:17.679 --> 00:10:19.746
we might be promoting laziness.

00:10:20.109 --> 00:10:23.844
We might be promoting
that entrepreneurs give up too easily.

00:10:24.315 --> 00:10:27.331
I also fear that the culture
of rapid failure

00:10:27.355 --> 00:10:31.180
could be minimizing
the devastating consequences

00:10:31.204 --> 00:10:33.137
of the failure of a business.

00:10:33.633 --> 00:10:37.069
For instance, when
my social enterprise died,

00:10:37.093 --> 00:10:42.610
the worst part was that I had to go back
to the indigenous community

00:10:42.634 --> 00:10:45.626
and tell the women
that the business had failed,

00:10:45.650 --> 00:10:47.387
and it was my fault.

00:10:48.284 --> 00:10:53.244
For some people this could be seen
like a great learning opportunity for me,

00:10:53.268 --> 00:10:56.342
but the truth is that
the closure of this business

00:10:56.366 --> 00:10:58.863
represented much more than that.

00:10:59.545 --> 00:11:02.863
It meant that the women
would stop receiving an income

00:11:02.887 --> 00:11:04.585
that they really needed.

NOTE Paragraph

00:11:05.736 --> 00:11:08.672
For this reason,
I want to propose something.

00:11:09.014 --> 00:11:13.149
I want to propose that
just as we put aside the idea

00:11:13.173 --> 00:11:16.339
of publicly humiliating
failed entrepreneurs,

00:11:16.363 --> 00:11:21.753
we must put aside the idea
that failing fast is always the best.

00:11:22.379 --> 00:11:25.006
And I want to propose a new mantra:

00:11:25.030 --> 00:11:27.037
fail mindfully.

00:11:27.538 --> 00:11:31.424
We must remember that businesses
are made of people,

00:11:31.448 --> 00:11:34.816
businesses are not entities
that appear and disappear

00:11:34.840 --> 00:11:36.974
magically without consequences.

00:11:37.575 --> 00:11:40.535
When a firm dies,
some people will lose their jobs.

00:11:40.863 --> 00:11:43.260
And others will lose their money.

00:11:43.284 --> 00:11:46.696
And in the case of social
and green enterprises,

00:11:46.720 --> 00:11:50.958
the death of this business
can have a negative impact

00:11:50.982 --> 00:11:54.585
on the ecosystems or communities
they were trying to serve.

NOTE Paragraph

00:11:55.363 --> 00:11:59.013
But what does it mean to fail mindfully?

00:11:59.498 --> 00:12:04.220
It means being aware of the impact,
of the consequences

00:12:04.244 --> 00:12:06.377
of the failure of that business.

00:12:06.895 --> 00:12:09.497
Being aware of the lessons learned.

00:12:09.998 --> 00:12:13.442
And being aware of the responsibility

00:12:13.466 --> 00:12:16.387
to share those learnings with the world.

NOTE Paragraph

00:12:16.411 --> 00:12:17.574
Thank you.

NOTE Paragraph

00:12:17.598 --> 00:12:20.984
(Applause)