Like many entrepreneurs, Pepe Villatoro didn’t like to talk about his failures – at least, not without mentioning the successes that came after. But one night in Mexico City, fuelled by a few drinks, he and a group of friends decided to share their worst business failures, and Villatoro experienced a powerful sense of freedom. He realised that Silicon Valley’s “fail fast” mentality had popularised the idea of failure as a learning opportunity but not addressed the enduring stigma att
attached to it. He wanted to help others take ownership over their mistakes instead of downplaying or hiding them. Thus, in 2012, the first Fuckup Night was born. The idea was simple – to get people to talk about their professional failures in a deeply personal and authentic way – and it quickly became a global phenomenon. Often called the punk version of TED Talks, Fuckup Nights are now held in more than 300 cities around the world. And Villatoro has gone on to create The Failure Institute, a social enterprise that helps organisations change how they think about failure. Here, he shares what he has learned about the ‘F’ word over the past decade. Inside Retail: When you founded Fuckup Nights, it took off because talking about failure was taboo. Do you think that’s still the case? Pepe Villatoro: Sadly, yes. There are two types of conversation around failure. The first is the transactional one, where people who mix their identities with their jobs use failure as another excuse to talk about the success that came after. The second is the one we try to be a part of, where people are vulnerable and authentic enough to analyze the actual failure [by] digging deeper on the emotional and societal implications. IR: Failure is often discussed in the realm of startups and entrepreneurs. What have you observed about the way the corporate sector treats failure? PV: Big human groups from any walk of life have a harder time getting along than smaller ones. That includes corporations. We have worked with more than 300 corporations on the need for building cultures where people celebrate trying, instead of stigmatising failure. The average corporation or team treats failure as garbage, as something useless and to avoid as much as possible, even in conversation. This comes from old-school practices like only rewarding results, but not rate of progress, learning, or personal and professional growth of the individual. If by sharing something that’s not working – or didn’t work – I’m going to get fired or tagged as unpromotable, I’m going to hide information and become political. Multiply this behaviour by a few people and you get corporate cultures of back-stabbing and unfair competition – more importantly, cultures that aren’t resilient or innovative because people don’t speak up and need to look after themselves only. More and more corporations are realising this and changing the way they treat failure. We work with them to create experiences that change actions and behaviours through vulnerability, authenticity and storytelling. That way, we help them build spaces of psychological safety, which is the number one characteristic of high-performance teams – a place and environment where people feel safe to speak up and be themselves. IR: What are the risks of not doing this? PV: I’m not sure, but we can ask Kodak, Blackberry and Blockbuster. Jokes aside, we see that corporations have a harder and harder time every day hiring and retaining talent, fostering bottom-up innovation and generally creating ownership and accountability. These are all symptoms of organisations that are falling behind because they lack resilience and innovation. In times of accelerating change, we need to design resilient organisations. That starts with culture. IR: Do you have any tips or advice for people facing a potential failure right now? PV: Failure can happen because of things that we do and things out of our control. In my opinion, there’s always something to learn if we give enough perspective by understanding history and cycles, as well as trying to think from first principles. My two pieces of advice are to think long term and to find what makes them (and their companies) weird. The first is even more relevant than in calmer times because we need to make difficult decisions based on our purpose and values. Otherwise, we can fall for the bright shiny new trends and technologies, which will steer our companies towards saturated and commoditised activities where we don’t have expertise. The second allows us to realise what our super powers are beyond our companies’ traditional pitches and SWOT analyses. For example, at Fuckup what makes us weird is that we like to be vulnerable and can’t stop being authentic. That turns some people and clients off, but allows us to pivot while maintaining our character, strengthening our brands and focusing on what we love so much that we’ll end up doing it with very high quality and impact. IR: Are you still learning new things about failure and the role it plays in life and business today? PV: After years of listening to vulnerable and authentic stories of failure, I’ve reached a much deeper understanding of failure than I had before. I’ve realised that failure is subjective and that it mostly depends on expectations. Someone might feel like a failure because their business went bankrupt and they don’t have savings at age 50, while someone else might feel like the biggest rock star because they got out of debt at the same age. In terms of the role failure plays, the first thing that comes to mind is a quote by the philosopher Émile Durkheim: “The feel of being a failure is the particular burden of life in modern capitalism.” He said that more than one hundred years ago. Imagine what he would think about today’s globalised hyper-competitive societies with information overflow and people basing their identities on the work they do. In other words, failure’s role can be that of the boogeyman, or that of a great tool for self-awareness and living life to the fullest. We think in terms of end states, instead of being present and enjoying the ride: “when I get that promotion/salary…”, “when I sell my company”, etc. When we don’t achieve those end states, we tend to feel like we’re worthless. In my opinion, the most important thing we need to have in mind is that failure is not an identity. We’re not failures, we live through failures. Just rephrasing it becomes easier to think of it as a valuable experience that we shouldn’t put under the rug. This story first appeared in the December 2023 issue of Inside Retail US magazine.