Why Business Mistakes Are Necessary for Success

This article is an excerpt from the Shortform book guide to "Delivering Happiness" by Tony Hsieh. Shortform has the world's best summaries and analyses of books you should be reading.

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Are you beating yourself up over a business mistake that you made? Did you learn anything from this miscalculation?

Part of having a career is taking creative risks. Tony Hsieh, the former CEO of Zappos, emphasizes the importance of his own risks and mistakes when building Zappos as a successful company. He further claims that business mistakes should not be seen as a personal failure, but as a step to success.

Keep reading to learn more about how business mistakes are natural and should be acceptable in the workplace.

Innovation Relies on Risk and Mistakes

Part of innovation is taking risks and making business mistakes. Zappos encourages employees to take risks and make mistakes because that’s the only way to learn, according to Hsieh. Over time, people who make mistakes have better instincts for which projects will succeed or fail and can choose successful ventures accordingly. Furthermore, trusting your employees to learn from their mistakes lets them better themselves and put their new experience and skills to work for the company, which in turn increases your profits. 

(Shortform note: Hsieh claims that making mistakes—or failing—is the only way to learn. However, others argue that you learn less from personal failure than success. To learn from your failures, you need to accept that you failed. However, your brain sometimes refuses to accept failure because doing so damages your self-esteem. To overcome this, remember that failure is normal and not a sign that you’re incompetent or bad—as Hsieh encourages through his mistake-positive perspective. Remembering this trains your brain not to see failure as a threat to your self-esteem, which lets you accept your mistakes, learn from them, and improve.)

Hsieh Learned From His Mistakes

Hsieh understands the importance of people making mistakes and rising from them. Through trial and error, Hsieh himself learned the keys to running a successful business. Mistakes aren’t what defined him and didn’t let him give up. Instead, Hsieh learned from them and avoided those mistakes in the future, gradually improving his business sense. This dedication to learning from his business mistakes formed the core of his belief in innovation and continual education.

He Didn’t Follow His Passion

One business mistake Hsieh learned from was not initially following his passion. Hsieh learned the importance of following your passion shortly after graduating college and starting full-time work. As discussed above, Hsieh wanted to find happiness by directing his own life. He believed making money was the solution, so he selected a job based on salary rather than interest in the company’s mission. However, rather than making him happy, taking a job he didn’t care about left him bored and miserable.

Hsieh realized that money alone couldn’t build a fulfilling career: He had to be passionate about the way he made money as well. Thus, Hsieh quit his well-paying but unfulfilling job, focusing on finding happiness through self-direction, rather than money. This passion led him to start his first company, LinkExchange (an internet-based advertisement company), rather than finding another traditional job. While establishing LinkExchange was a demanding task, requiring long hours and hard work, Hsieh’s passion helped him persevere and succeed.

He Was Overconfident

Overconfidence is another dangerous business mistake for entrepreneurs to make, Hsieh says, as it encourages reckless decisions. Hsieh struggled with overconfidence throughout his life: When one business decision succeeded, he would approach the next opportunity as if it was guaranteed to succeed as well. He wouldn’t consider whether the market or his circumstances had changed since his initial success and made bad investments as a result.

Hsieh says this experience taught him to carefully weigh the risks and benefits of a decision before making it, rather than expecting success because he succeeded in the past. While Hsieh warns against avoiding your passion and being overconfident, it’s okay for people to make these mistakes along the way. No one truly knows what’s right for them until they know otherwise.

Why Business Mistakes Are Necessary for Success

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Like what you just read? Read the rest of the world's best book summary and analysis of Tony Hsieh's "Delivering Happiness" at Shortform.

Here's what you'll find in our full Delivering Happiness summary:

  • Former Zappos CEO Tony Hsieh's guide to workplace happiness
  • The three principles that turned Zappos into a billion-dollar company in a decade
  • An exploration of the psychology behind happiness and why it leads to success

Katie Doll

Somehow, Katie was able to pull off her childhood dream of creating a career around books after graduating with a degree in English and a concentration in Creative Writing. Her preferred genre of books has changed drastically over the years, from fantasy/dystopian young-adult to moving novels and non-fiction books on the human experience. Katie especially enjoys reading and writing about all things television, good and bad.

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