When I look at systems of people the first thing I look at is failure: how does the system/individual fail, what sort of feedback loop is there, and how are changes made?
So Steve's statement about the culture not accepting failure was a red flag. His statement that the government was the prime investor was another red flag. (Governments are notorious for not admitting failure. To do so would challenge the their authority and ability) And once he said that bankruptcy laws there were draconian? The red alert started going off. It's simply non-doable.
It's a shame. I love the scenery, and the people are terrific. But a million small failures make a great success, and if you can't fail easily, quickly, and learn from it? You're never going to develop much of anything.
I have been living and working here in Chile for the last 11 years. From my perspective, the biggest obstacle is the shaky, scrabbling middle class (to which I belong). The class separation here is rather pronounced. There's the rich class, which consists of a small share of the society which concentrates obscene wealth (compared to the rest) and is attainable almost exclusively through birth or marriage. Then there's the poor class, which is full of people with scarce resources; they excel at poverty because there's little or no "credit culture" (or whatever it's properly called) here, so they live in debt.
The rest of us belong to the middle class and are being kept on our toes, lest we suddenly join the poor. Any bill that gets passed usually favors either the poor or the rich. If you default on your debt or anything like that, your name and info will end up in Dicom (the local Equifax), which is often enough to bury your prospects of employment indefinitely, even after you've paid off your debt and normalized your situation.
So you see, that's where the fear of failure comes from: if you have a stable, well-paid job, there's not much incentive to risk it for a startup.
To me the right solution is to have an 'umbrella company' - that startups can live under. By law, they'd be divisions (so bankruptcy law would never get involved). But, internal to the umbrella company, there would be a culture of experimentation & iteration.
Like rejection therapy, the 'umbrella' employees could be encouraged to fail often : Not enough failure implies not enough risk-taking / innovation.
If you're having to rely on the ability to walk away from a commitment (to a supplier, say), then that needs to be built into the contract initially.
In California (say), where the culture is 'built for failure', the contracts already embed that optionality - meaning that the pricing already has the possibility of default built in. Negotiating the same flexibility elsewhere should just increase the pricing. Just as offering gold-plated guarantees in California should reduce the pricing.
Comments
When I look at systems of people the first thing I look at is failure: how does the system/individual fail, what sort of feedback loop is there, and how are changes made?
So Steve's statement about the culture not accepting failure was a red flag. His statement that the government was the prime investor was another red flag. (Governments are notorious for not admitting failure. To do so would challenge the their authority and ability) And once he said that bankruptcy laws there were draconian? The red alert started going off. It's simply non-doable.
It's a shame. I love the scenery, and the people are terrific. But a million small failures make a great success, and if you can't fail easily, quickly, and learn from it? You're never going to develop much of anything.
I have been living and working here in Chile for the last 11 years. From my perspective, the biggest obstacle is the shaky, scrabbling middle class (to which I belong). The class separation here is rather pronounced. There's the rich class, which consists of a small share of the society which concentrates obscene wealth (compared to the rest) and is attainable almost exclusively through birth or marriage. Then there's the poor class, which is full of people with scarce resources; they excel at poverty because there's little or no "credit culture" (or whatever it's properly called) here, so they live in debt.
The rest of us belong to the middle class and are being kept on our toes, lest we suddenly join the poor. Any bill that gets passed usually favors either the poor or the rich. If you default on your debt or anything like that, your name and info will end up in Dicom (the local Equifax), which is often enough to bury your prospects of employment indefinitely, even after you've paid off your debt and normalized your situation.
So you see, that's where the fear of failure comes from: if you have a stable, well-paid job, there's not much incentive to risk it for a startup.
Excellent comment. I fear the US is heading down a similar road...
To me the right solution is to have an 'umbrella company' - that startups can live under. By law, they'd be divisions (so bankruptcy law would never get involved). But, internal to the umbrella company, there would be a culture of experimentation & iteration.
Like rejection therapy, the 'umbrella' employees could be encouraged to fail often : Not enough failure implies not enough risk-taking / innovation.
How does that solve the problem of not being able to unilaterally write off a debt obligation?
If you're having to rely on the ability to walk away from a commitment (to a supplier, say), then that needs to be built into the contract initially.
In California (say), where the culture is 'built for failure', the contracts already embed that optionality - meaning that the pricing already has the possibility of default built in. Negotiating the same flexibility elsewhere should just increase the pricing. Just as offering gold-plated guarantees in California should reduce the pricing.