Success and failure are quite similar. Just as there is only a fine line between genius and madness there are a few striking similarities between failure and success. In general people think that success is a matter of having a good idea and working hard. In reality there are 5 components of any success and failure story.

Heinrich’s Domino Model of Accident Causation is a theory that is being used in Risk Management. It explains that any accident can be broken down in 5 components that follow each other as falling dominos that lead to an accident. Here are those components:

Social Environment:
Those conditions which make us take or accept risks.

Undesirable Human Traits:
Anger, carelessness, tiredness, lack of understanding, inattention.

Unsafe Acts or Conditions:
Poor planning, unsafe equipment, hazardous environment.

The Accident:
The accident occurs when the above events conspire to cause something to go wrong.

The Injury:
Injury occurs when the person sustains damage.
Social Environment, Undesirable Human Traits, Unsafe Acts or Conditions, The Accident, The Injury.

If you want to examine an accident (from Plain crash to Dropped Ice-cream) you can start with looking at the different factors that caused the accident and use the Domino Theory to find out what actually happened.

My theory is that you can also apply Heinrich’s Domino Model of Accident Causation to success. So here is my Domino Model of Success Causation:

Social Environment:
Those conditions which make us try a new service and accept change.

Desirable Human Traits:
Frustration, readiness, understanding, attention, the desire to try something new.
The right Acts or Conditions:
Good planning, good equipment, adaptable environment.

The Success:
The success occurs when the above events cause something to go right and grow virally.

The Exit:
The exit occurs when the entrepreneur sustains wealth through a liquidity event.

If you want to know if a certain (your?) new internet company is going to be successful or if you want to know why a company failed it might be helpful to look at these 5 factors.

An example:

In 1996 I downloaded a software package that would enable me to make free Voice over IP telephone calls to other people using the same software with my Mac and an internet connection.

In fact, VOIP has been around since the Network Voice Protocol was first described in 1973 and there have been dozens of companies that did what Skype does.

So why was Skype a success and why did all the other similar products fail? The other companies were first to market, had similar technology and their elevator pitch must have been indistinguishable from Skype.

It wasn’t just the timing was it? Or maybe it was the team? The answer is that Skype scored well on all the 5 factors. Just as with any accident it was a collection of factors and components that led to the eventual success.

In Skypes case the social environment was ready for change. We were all increasingly frustrated with the telephone companies and ready to adopt something new. They planned the process extremely well and were able to keep innovating as they grew. There was a critical mass of people with broadband access and the interface of the product was just easy enough.

And the final factor that makes this a success: they had their liquidity event. You can have millions of users, be famous and very innovative but your company is not a true success until there is some kind of liquidity event.

So based on this knowledge you could conclude that all you have to do is make sure you score well on each factor to build a successful company. This is true but also impossible to predict in advance. You can only hope that your timing is right, that the market is ready, that people are willing to try something new.

In Risk Management if you understand the components of an accident you might be able to prevent one in the future. Hopefully, now that you understand the components of a success you might be able to predict one better.

Just remember to apply the Domino Model of Success Causation.

A few years I sold my small company to a big company. One of the first thing they wanted to do was ‘professionalize’ our processes.

Improvement is always good so I happily complied.

We started with the helpdesk and they asked me how this was organized. I answered

‘When the phone rings the whole office races to it. The one who gets there first gets to answer it’

It was kind of an office running gag to see who could get the phone first and people were often surprised to get someone (out of breath in some instances) before the phone rang twice.

The big company guys smiled politely and pointed out that that wasn’t very professional and wouldn’t scale and that we would hire a professional helpdesk service. So we did.

The result was terrible. It cost thousands of euros a month and the quality of the service was no where near what we offered in the past. The service would let people wait for minutes until someone would become available and then the person who answered didn’t know anything about the problem or didn’t seem interested.

The other effect was that we didn’t hear about problems directly from clients anymore. The helpdesk service acted like a Berlin wall between the customers and the company.

After a few months I suggested to the bigger company to get rid of the helpdesk company and get back to answering the phone ourselves. They thought I was crazy and answered that this was now a professional company and that it was unthinkable and impractical to just have everybody answer the phone personally.

I figured that everyone in the company would have phone duty once a month, answer between 10 and 30 phonecalls a day, still be able to work and feel a lot more responsible and connected to clients. But no matter what I said, it just wasn’t professional in their opinion.

I think every industry, product, service and technique goes through the same phases:

- interesting
- improved
- perfected
- boring
- personalized
- interesting again

I’ll give you an example: Art.
At first humanity tried to reach perfection. The perfect painting, indistinct from reality. But when we reached that point we started experimenting with reality and suddenly reality seemed less interesting than the interpretation of the artist. That is how we got to cubism, pointilism and abstract art.

Another example: Virtual reality.
At first, we tried to mimic reality as much as we could. But not until we added lens flare and other small imperfections did we really achieve it. And now we want to go beyond reality and shape new worlds instead of recreating our current one. Perfection just doesn’t cut it anymore.

The last example: Amateur Porn.
The first popular porn images (And I don’t mean the ones found in Pompeii) were black and white photographs that people took of each other and distributed among friends. This became a popular industry which strived to perfection. They tried to improve the images by using more muscular actors who could do things most people can’t and who had seemingly ‘perfect’ bodies. No hair where it shouldn’t be, no celulite and oversized… ehm… tools.

Until that became boring. It turned out people were fed up with looking at ‘perfect’ bodies having sex for hours in positions that required impossible flexibility. They wanted amateur porn that looked real. And they got it.

So what is the point of this story?

If you are starting a business you might think ‘I need a typewriter so I can send professional letters’. Now imagine how your clients would feel if you would send them a handwritten letter on a simple but elegant piece of paper. My guess is you will impress the hell out of them.

I think ‘professional’ is not always better than ‘amateur’. And it is always better to be a well meaning amateur than an uninterested professional.

Most blogs die after a few months. Its a fact of life. Some people think it is a matter of writers block - or Bloggers Block in this case - and you can find a lot of great articles on how to find inspiration for your blog and battle BlogBlock.

My guess (and experience) isn’t that people run out of inspiration or things to write about. I think the reason they stop blogging is because of the Hiatuses Increasing Aversion Effect.

This is how it works; let assume you post 3 articles, every day. Then you miss a day or two. Instinctively you feel that your next post should make up for the lost posts and better be pretty interesting. This raises the bar for your next post so you decide to think about it for an extra day. The next day you want to post something again but this time you have an even greater responsibility to write a good post! And the longer you wait, the higher you feel the expectations will be. In other words: The Hiatuses Increasing Aversion Effect.

Guess I overcame that one…