Silicon Valley embodies all that’s good about American capitalism – unbridled energy and optimism, a relentless work ethic, and a visionary streak a mile wide. But it also has a dark side: outsized egos, wasteful spending, and a capacity for self-destruction. Both are portrayed in stark detail in ALMOST: Twelve Electric Months Chasing A Silicon Valley Dream by Hap Klopp, perhaps best known as founder of The North Face, one of the world’s great outdoor companies, and journalist Brian Tarcy.
The story of Ardica Technologies, a manufacturer of a groundbreaking portable fuel cell technology that can power your phone or heat your outdoor clothing, is a far more typical one than that of a Google or an Apple. Ardica’s downward spiral became embarrassingly public when U.S. and Canadian authorities issued a recall for jackets and vests that had been equipped with the company’s Moshi power system. It was discovered that electrical connections in the warming components in the jackets and vest could overheat, posing a burn hazard to consumers.
What’s most astonishing about the downfall of Ardica is its suddenness: in the space of twelve months it went from industry darling to messy failure. The Stanford PhDs and MBAs who had flocked to the company seeking quick riches, as well as the seasoned entrepreneurs who ran the company, saw their goals dashed when the company barely escaped bankruptcy.
The essence of Silicon Valley, as captured by ALMOST, is that the path to success is paved with failure, often multiple ones. Most of Ardica’s brilliant young engineers embarked on successful careers elsewhere. If anything, they became even more valuable commodities because of the hard lessons they learned. While companies outside of Silicon Valley generally view failure as a career-ending disgrace, in Silicon Valley failure is worn like a badge of honor.
“In Silicon Valley, those who have failed are very attractive prospects for the next venture, particularly when given a second chance,” says Klopp, who witnessed Ardica’s undoing first hand as a member of its Board and head of marketing and sales. Proof of this can be seen in the portfolios of most Silicon Valley venture capitalists. A common VC portfolio is based on a formula that three of ten investments will be home runs, three will be write-offs, and the remaining four will be mediocre and have to be sold off.
The story of Ardica Technologies would be a powerful metaphor were it not also real. A great American brand in an emerging area of need could have been built, and it almost was. The story in ALMOST provides a real-world case study answer to the perennial and difficult business question:
Do you sell what you can build or do you build what you can sell?
Featuring a cast of gifted geniuses and seasoned entrepreneurs involved in a classic split, ALMOST colors in the real-life metaphor while the lessons are revealed:
· Invention without commercialization creates a stillborn company
· When a company runs out of money, it makes bad decisions
· Multiple cultures cannot co-exist in a single company
· Get rich quick is not a strategy
· Failing to plan is planning to fail
Silicon Valley is replete with stories such as Ardica’s. After Steve Jobs was ousted from Apple, he founded Pixar, then rejoined Apple and resurrected the company. Pixar and Apple are quintessential examples of Silicon Valley successes arising from the ashes of personal failure. Thus is the ultimate lesson of ALMOST: The sting of failure for the Silicon Valley innovator comes along with the true prize of wisdom, resilience, and an electric desire to get it right the next time.
For anyone interested in business, leadership, high-tech, entrepreneurship, innovation, and the world of startups and venture capital, ALMOST reveals the dark side of the American dream.
ABOUT THE AUTHORS
Hap Klopp, with an MBA from Stanford University, was the founder and 20-year CEO of The North Face, one of the world’s great outdoor companies. Subsequently he has managed his global consulting company, with clients from start-ups to billion dollar corporations, and travels the world teaching and lecturing on entrepreneurship. He is currently Executive Chairman of Obscura Digital, and serves on numerous Boards.
Brian Tarcy is an acclaimed ghostwriter and book collaborator, journalist, and author. Born and raised near Cleveland, he holds a BS in journalism from Ohio University in Athens, OH. He resides in Falmouth, MA.
Twelve Electric Months Chasing
A Silicon Valley Dream
By Hap Klopp and Brian Tarcy
Publisher: FG Press
Publication date: February 2015
Price: $24.95 / hardcover