This past week, we here at the Unreasonable Institute experienced our first full-fledged and very public failure as an organization. We launched our Finalist Marketplace, the online platform where the first 25 of our 35 finalists to raise the $6,500 are selected to attend the Unreasonable Institute. Unfortunately, the launch of the marketplace on January 25 was accompanied by a number of serious technical glitches that lost both the Unreasonable Institute and our finalists a good deal of credibility with online visitors. The experience has been emotionally difficult as we received a flood of emails from frustrated sponsors and finalists (rightfully so), but also a very educational and inspiring one. This blog post is a summary of the most important things we’ve learned from the experience.

Fail Fast. You may have read VC Jim Estill’s post “Fail Fast, Fail Often, Fail Cheap” which explains we ought to encourage risk-taking and failure in organizations to promote innovation. We have certainly taken the post to heart at the Unreasonable Institute, perhaps pushing toward achieving goals that were realistically out of our reach and the particular talents of our team. Without tremendous familiarity with the kind of website programming it would require to build it, we set out to design an online marketplace in a few months for a couple thousand dollars, and about 65% of it went right. Comparing the platform to similar online marketplaces, it should have cost about $200,000, taken years to build, and functioned perfectly (especially when people are contributing funds to support entrepreneurs). But, as Don Dodge writes in his recent post about how Google sets goals, “achieving 65% of the impossible is better than 100% of the ordinary.” Once this platform functions, it could enable entrepreneurs from every walk of life and every corner of the globe to securely raise the funds the need to attend the Unreasonable Institute at no cost to themselves, while garnering hundreds of supporters around the world. It could be expanded to a social investment marketplace to provide these entrepreneurs access to capital even after the Unreasonable Institute and be used by many organizations on an international scale to crowdfund promising, high-impact social ventures. We’re en route to realizing this vision, learning, as Thomas Edison said, the many ways that don’t work on our way to discovering what does work.

Admit it Fast. In the meanwhile, there’s no denying the negative consequences of our ambition. We dramatically failed to deliver what we promised in front of at least 8,000 people (who’d set up sponsor accounts on our Finalist Marketplace). Some of the problems with our marketplace, largely due to unexpectedly high traffic and holes in backend programming, included the fact that sponsors were making pledges to entrepreneurs on the marketplace that just flat out did not show up. Sponsors were also able to (though we were supposed to ensure that they could not) make multiple donations to the same entrepreneur. Many visitors reported to us that the online marketplace was difficult to navigate and that the user-experience was confusing and frustrating. There’s no excuse: we simply can’t put out a marketplace riddled with this many issues when 35 incredible entrepreneurs have rallied hundreds, even thousands, of their supporters around the globe to support them via this platform in good faith. Our team has never hit such a low.

But as Robert Frost reminds us, “The best way out is always through.” So we sent an email to every single user explaining the situation and the fact that it was completely our own misjudgments that this online marketplace that was far less than perfect. The reaction was truly surprising: people were understanding. One sponsor who had expressed frustration with our marketplace in the past told us our admission of failure restored her faith in our organization. Others offered words of encouragement through a difficult time. One of our finalists even sent us Rudyard Kipling’s poem “If” to help give us some perspective (I highly recommend you read it right now). We were amazed to see the same group of people we had frustrated profoundly respond to our open admission of failure with support and encouragement. We, learned, therefore, that openly admitting failure or weakness, as on a personal level, can show the human side of an organization and thus improve its relationship with the public. So long as you make it right as soon as possible.

Fix It Fast. While the support of the finalists and sponsors on the site has been incredibly inspiring and helpful, if we fail to produce a function marketplace again, we will lose credibility with them permanently. So we’ve taken specific steps to solicit and respond to all the feedback we’ve received (especially from our customers: the 35 entrepreneurs who are our finalists). We’ve acquired a new PHP programmer who’s tightening up the backend of the marketplace. We’ve integrated Amazon Payment Systems for secure and verified payments. We’ve adjusted the flow and organization of the site to make the experience more user-friendly and intuitive. Bottom line: we failed, but we’ve been doing everything we possibly can, working day and night, to get this marketplace fully functional. And we’re delighted to report that it is now up and running at http://unreasonableinstitute.org/finalists!

So What? Failure happens. And publicly too. But if handled with integrity and transparency, it cannot only be a tremendous learning opportunity, but a chance to form deeper human connections with your customers / beneficiaries and better serve their needs. All of us here firmly believe that we will be better off for this experience in the long-run because, as our homeboy George Bernard Shaw says, “…reputation grows with every failure.”

Failure is scary. You invest your courage, your time, your energy and come up short. It’s no fun. A fear of failure can be crippling, however, and being a social entrepreneur requires a willingness to take risks and to face a fear of failure. How can you see failure as a badge of honor so you can move past it? Here’s a story that inspired us at The Unreasonable Institute to think of failure as success.

A Tale of Successful Failure. 26-year old Ronald Sands from Philadelphia has never had a very good track record with women. In fact, he’s developed a terrifying fear of asking women out. Why? Because he’s afraid of being rejected, naturally. Poor Ronald starts to feel lonely and like his fear of approaching women was such a problem that he decided to visit a therapist. So he schedules an appointment with a Dr. Marci Holland in town.

At their first session, Ronald describes his problem and Dr. Holland nods understandingly. When he finishes, Dr. Holland says “All right Ronald, I can help you. But before anything else, I want you to promise me that you are going to do exactly what I tell you.” This sort of statement, understandably, makes Ronald a little nervous. “Don’t worry, Ronald,” Dr. Holland says. “I’ll give you all our sessions for free if this doesn’t work.” Ronald finds this offer appealing and he’s really curious about what Dr. Holland will suggest so he agrees. “Excellent! Here’s what you have to do: get rejected by 75 women in a row.”

Ronald is surprised, but slightly excited. He can get rejected! He’s great at getting rejected!

So Ronald wakes up the following Saturday and heads to the city mall. He asks a kind, beautiful waitress at a coffee shop if she’d like to go on a date with him. She smiles, but politely explains that she has a boyfriend. He asks a woman quietly reading A Call to Arms if she’d like to go out with him, but she too has a boyfriend. Ronald eventually asks 23 women on dates that day, all of whom say, “Sorry, not interested,” or “I have a boyfriend,” or “no thank you.” It’s not exactly easy to handle all this rejection, but by and large, Ronald finds that most everyone he asked was flattered and kind. On the way out of the mall, he walks by the flower vendor, someone he’s always taken a liking too. He asks her if she’d like to go on a date and she lights up and says “Oh! I’d love to!”

Whoa. That’s never happened before! Ronald shares the events of the weekend with Dr. Holland who seems uninterested in the date Ronald got with the flower girl. “How many women said no to you?” she asks. “23,” Ronald replies. “Now, Ronald,” she starts, “You promised me you’d do exactly what I said and you agreed to get rejected by 75 women in a row!”

Back to the drawing board…Ronald heads to the city park this time and tries his luck. This time, he asks 9 women on dates, all of whom say no. But the 10^th woman he asks out says yes! Ronald is shocked. He’s gotten two dates within the span of a week and his confidence is growing. He tells Dr. Holland how excited he is, but she sends him back out to get rejected by 75 women.

This time the first woman he asks on a date says she’d be delighted to have dinner with Ronald. This is unprecedented. He runs to Dr. Holland’s office, insisting that he’s cured! Dr. Holland smiles and says, “You know what Ronald, you are cured. Congratulations!”

Why did this work? The clever strategy that Dr. Holland devised was to turn what Ronald thought was failure into success. Every rejection he got brought him closer to his goal of 75 total rejections. But in the meanwhile, he was learning that getting rejected wasn’t really that bad. He made the day of every single woman he approached. His confidence in approaching them grew with each attempt. That’s why he was more himself when he asked out the women who did ultimately agree to go out with him.

Approaching investors, partners, the media, and potential mentors is a lot like asking people on dates. It takes a good deal of courage because you’re afraid of rejection. But truth be told, the more attempts you make, the more confident you’ll grow, and the more success you’ll achieve. As Silicon Valley entrepreneur Randy Komisar explains, the major league baseball players who hit the most home runs are also the ones who strike out the most. Achieving consistent success is closely tied with facing consistent failure.

Here’s a challenge for you: Go out and make 10 asks to investors, potential partners, whomever. Share your failure stories with us! The first person to get 10 rejections (starting from today) and to share their story with us in the comments section of this blog wins a free copy of The Power of Unreasonable People by John Elkington and Pamela Hartigan!

Related Posts:

• How to Fail: 25 Secrets Learned Through Failure – Taylor Davidson from Unstructured Ventures shares 25  insights learned from business failure
• Jason Mendelson Talks About Startup Failure - Venture Capitalist Jason Mendelson explains why failure, when done right, is attractive to VCs
• Embrace Losing – Mark Suster, an entrepreneur turned Venture Capitalist, outlines his major takeaways from painful failure in two startups
• Failure! – Paula Goldman explores the benefits of failure on SocialEdge.
• The Biggest Successes are Often Bred from Failure – Randy Komisar explains why failure is key for innovation in this 8-minute YouTube Video.