My Favourite Failure: How a Navy SEAL Transforms Failure into Opportunity - Alden Mills

0:00One of the thorniest parts of managing people is managing their pay. How often do you end up misaligned with your team? Someone thinks they deserve a raise, but you have a different view. This is where our partner Personio comes in. Personio is the all-in-one HR platform you need to scale your business. And they've just released a feature for compensation management. It makes salary reviews so much easier because it ties salaries to performance reviews, which also happen to be handled by Personio. Managers can do stuff like see their allocated budget for promotions and distribute them across their teams.

0:35Personio constantly adds new features like this to make your life easier and your company more successful. You can get set up with them incredibly quickly, which is great if you're time poor. So, if you're leading a growing business and want to offer a better employee experience for less effort, then book a demo at personio.com forward slash secret leaders. That's personio.com forward slash secret leaders. There's a link in the show notes. And a lot of times I find entrepreneurs, they think about all the potential sunny days of being an entrepreneur, but that's not the day that you get paid for.

1:19Where the real earning happens is on all the rainy, struggling days when you're wondering if this will even work. And when you're there in that spot, never forget your passion and your purpose of why you're doing this in the first place. Alden Mills is a former Navy SEAL who's had some big business wins. peppered with failures. This doesn't bother him in the slightest, because as a SEAL, you're trained to have a unique relationship with failure. He argues you should look at failures as a genuine positive. I know that's easier said than done, but Alden's got the insights and frameworks to back it up.

2:05Alden was taught several lessons on failure in SEALs training. The first one was in the sixth week of training. It was called Hell Week. And Hell Week is this period of time that goes from a Sunday afternoon evening to a Friday afternoon for a total, and they give you a total of about three and a half hours of sleep for the entire week. and I was the class leader. And at this point, it was Tuesday, no, it was Wednesday morning at about two o 'clock in the morning. And the instructors pulled me aside and they all huddled around me and they said, sir, do you know why everybody's quitting? Now we started, the original class up was 122 people.

2:59And so now we're down to 18. And I'm exhausted. I've been up for over 48 hours straight. And I was like, I don't know, they don't want to be here. And he goes, no, sir. That's not why they're quitting. They're quitting because you're a bad leader. And let me ask you a question. How do you honestly think you can lead a SEAL platoon if you can't even lead your class through hell week. Sir, it's time for you to quit. We want you to walk over here and ring this bell. It's over. And I have to tell you, when he created that hypothetical of, if you can't do it now, why do you think you could do it later?

3:45It immediately got me thinking like, well, my gosh, I don't want to get people killed. I don't want to be a bad leader in SEAL team. and if that's what's happening now, maybe I should quit. And he was playing on what I call a negative hypothetical. And I remember thinking for about a second or so as I shifted my weight from the rear of my feet to the balls of my feet, as I started to think about moving towards that bell, well, wait a second, I've got time between now and then. If I'm that bad of a leader, I'll figure out a way to get better. I don't have to be the greatest leader right today. I'll keep looking at ways to get better.

4:29And just then my mind switched and I was like, no, I'm not quitting, but thank you. I'm going to my class. And all the instructors gathered around, they're like, oh, we almost had him. And I bring that point up because one, they were calling me out as a failure, as a leader, as I was the only officer of the class. And two, many times we psych ourselves out by creating our own negative hypothetical of like, ah, I keep trying this and it's not working. And why should I keep trying? Because if it doesn't work now, it won't work in the future. And that particular line of thinking causes a lot of people to quit before they really get started.

5:18And I call that line of thinking creating our own negative hypotheticals and ambushing ourselves before we get started. Alden thinks entrepreneurs often don't put their failures in perspective. We emphasize our failures too much rather than recognize they are speed bumps. And things got bumpy for Alden near Gibraltar. My first two tours of duty were driving classified combat mini submersibles. And by the way, the only other nation that we share this technology with is England. And in particular, with our brothers over with the special boat service, they have one or two of our mini subs. They're called sealed delivery vehicles.

6:12And we were experimenting with how to stay hydrated underwater for long periods of time because you could be up to 12 hours in this flooded submarine. And I thought it would be a great idea to take a Camelback, get all the air out of it, and Camelback is an air bladder of water that you wear on your back. and I stuffed it full of Gatorade mix. And I had put way too much Gatorade mix into this. And we were practicing for a mission that we needed to be prepared for in the Adriatic. And where we were practicing was off the Straits of Gibraltar, literally at Gibraltar, working with some of our British friends.

7:02And I got so sick underwater because I had totally messed up the mixture that I started vomiting underwater in a closed circuit rebreather where we had to come to the surface and I had to get medical attention. And I totally failed the mission because I was experimenting on a way to stay hydrated. That was a real embarrassment. We had a submarine involved, a major submarine involved. We had ship traffic, all kinds of service support. And my actions were the reason that we failed. You could not feel like an idiot when they're like, what were you thinking? However, what I did prove was that you could drink water out of one of these airbags of a Camelback and you were able to, we cracked the code on how to stay hydrated underwater for long periods of time because that was a real problem and people were becoming hypothermic.

8:14What we learned on that was I had totally the wrong mixture. And ironically, as disappointing as it was to fail on that mission, what they appreciated and what became now a standard operating procedure is the ability to use these water bladders underwater. Another example, we're in Bosnia and we're trying to take a picture of a war criminal so we could send it to higher headquarters. And the problem was the autofocus on this first generation digital camera wasn't working. By the way, we worked this time around with the SAS and we kept failing on getting the autofocus to work. In 12 days, to be honest, we never got the autofocus to work.

9:11What we had to do was stop worrying about the autofocus and figure out ways to slow down the cars so we could get a slower pace for the camera to catch up with the vehicle, which allowed us to go at it from a different way. So that was a failure until we figured out a way to turn that failure into a success. Auden has three principles on failure that he learned from his time in the SEALs. When I went through SEAL training, that was 1991 to 1992. I was 22, 23 years old. I'm now 55. And there isn't a day that goes by that I don't think about how to apply one of these three things. Number one, never fear failure.

10:03The moment you fear failure is the moment you won't push yourself to your full potential because you're too worried about the downside risk of something. Now, I appreciate there are some limitations to that where you don't want to put yourself in such harm's way. But before you even start, if the fear of failure is a driving force for you, it can decide actions that may never allow you to be fully committed to what you're doing. Number two, no failure is a failure if you've learned from it. You know, Thomas Edison, the inventor of the light bulb used to say, I learned 10 ,000 ways not to make a light bulb.

10:55And if you really think about that from that perspective, then it's just the opposite side of the negative coin. You're looking at it from the positive perspective that you've learned something from it. And the third piece about failure is regardless of what your failure is, I want you to have the appreciation that you're failing forward. If you appreciate the fact that you've learned something, that means you've taken a step forward. And as long as you're failing forward, you're making progress. And if you look at it from those three perspectives, you can use failure as fuel for you to move forward.

11:46Auden ultimately moved from the SEALs into entrepreneurship and ended up in one hell of a business pickle. I had created my first business and that business idea was connecting antiquated pieces of fitness equipment with Bluetooth technology. But that was back in 2003. I had raised$65 ,000 to do a proof of concept, and that failed within less than three months. And then I went on and shifted to creating a product that was a handheld product that I affectionately called the world's greatest fat-burning device, the BodyRev. And that's when I raised a million and a half dollars from 37 of my closest friends and family to only spend $1 ,475 ,000 worth of ways not to launch that product over the next four years.

12:51And I was literally, so now you have to appreciate, I'm totally out of money. I have now had two failures behind me. And to add insult to injury, I had a new product that I had finally decided to make a change after four years. It took me a little while to get the message. And I introduced a new product to a small subset of those five investors, of the 37 investors, there were five of them. And I'm asking for a little more money. And they stopped me in my contracts and they hold up a cashflow statement and they're like, Alden, don't tell us about new products. Let us show you this cashflow statement.

13:38You don't have any. You're over half a million dollars in debt to a manufacturer. You can't afford to pay back the lawyers, the accountants, the designers. There is only one option for you. It's to go bankrupt. That's it. That's all there is. We don't want to hear about new products. It's time for you to go get a job. And by the way, you're starting to embarrass yourself. Like that was helpful. Oof. No one wants to hear that. But what did that feel like? It was a total gut punch. You know, these were investors that I thought were going to be more supportive, but I understood their position. You know, they were trying to keep me safe.

14:25My wife was pregnant with child number three at the time. We were broke. I was using her credit cards. And I had a small team of five people waiting for me back at the office, hoping that I had raised another$200 ,000 that we figured would get us just enough to get one container of the new product. And I sat in that parking lot in my car for a good hour after that meeting, trying to decide what would I tell my team and how could I convince them to stick around for 90 days to see if we could launch this next product. And I walked, you know, The drive back to the office was only about 20 minutes.

15:17When I got there, they were all standing. Did you get the money? They would nearly yell at me. And I was like, no, no, I didn't. But I got something that I think is even better. And they all rolled their eyes. And they naturally did the instinct that you'd think most people would do when you're out of money. They're like, oh, it's over. Forget about it. We got to go bankrupt. I got to go get a job. Now, I had just enough money to pay their benefits, and I still had equity left. And I was like, look, if we go bankrupt, we know exactly what's behind that door. We know exactly what's going to happen.

16:04But if we stick this out for 90 days, that should be just enough time to figure out if we can launch this next product. And they immediately came up with some very logical reasons why we wouldn't be able to do it. Like, Alden, you can't cut steel in 90 days, which would be the mold for this next product. We don't even have the design complete. That was true. And we don't know what kind of intellectual property we can get. We didn't have enough money to pay for the patent wear. And why do you think the manufacturer is going to do this? we're already$500 ,000 in debt. Another valid point. And they had a few others.

16:46And I was like, look, imagine just for a moment what it would be like if at the end of 90 days, this product works. And imagine six months from now when this product is selling, what this will be for a storyline for all of us in this business. Now, I hear you on those points. How about if you stick with me for a week and let's see if we can make it through the week of getting through some of these problems? Well, they did. They stuck for a week and one week turned into two weeks and then to four and then eight. And then we got to 87th day and we launched a product called the Perfect Push-Up. And that perfect push-up, two and a half years later, generated nearly 100 million in sales and put us as the fastest growing consumer products company in the United States.

17:50It's what startup dreams are made of. Your back's against the wall. One final pivot. And bang. Now, let's roll forward to the next big failure. Then the conversation turned from, hey, you're going bankrupt to, whoa, you're making a lot of money now. Now's the time to sell your business. And we actually did take their advice about two years later, and we started the process of selling the business. And that's when we came across another massive failure. And you have to think of the time period. This is 2008 going into January of 2009. We've run a process against about 40 different private equity firms that expressed interest in buying our business.

18:49and we settled on one that was offering us around$150 million for our business. And we were two weeks from closing on selling the business for$150 million. We missed our numbers. We got some poor advice, I think, and we made numbers higher than they probably should have been that we were trying to go to. And for a goal, we should have made it more conservative. But regardless, we missed our target EBITDA number. At the same time, President Obama takes office, calls it the second Great Depression. Two of the portfolio companies in the private equities portfolio go bankrupt and the deal's off. Three months.

19:48And by the way, at the same time, Inc. Magazine lists us as the fastest growing consumer products company, number four overall. We were looking at$150 million for sale of the business. People were already starting to count their money. Three months later, the bank that I had used to finance the company has decided they would no longer want to fund us. They froze our account. And I had co-signed for the bank loan using my house along with two of our key founders. And the banks were now evaluating our house to repossess them to pay back the loan of$9 million. Four, what a ride. They managed to get through it, which is a whole other story.

20:38But the way Alden reframed the loan problem is how he'd advise a struggling founder to look at their business. When I was looking at that, I found myself one evening coming in on the weekend, sitting in my office by myself and just thinking about how am I going to get through this. And as I was thinking about it, I started flipping through the mail. And one letter stood out to me. It was written in pencil, clearly by a child. And the address said, Mr. Perfect Push-Up Man. And I opened the letter and it says, Dear Mr. Perfect Push-Up Man, thank you for inventing the perfect push-up. My grandmother gave it to me for Christmas.

21:36I followed your workout routine four times. Now, the workout routine is three weeks long, so that means he did 12 weeks of workouts. And I made the junior varsity football team. Next year, I'm trying out for varsity. Thank you, Johnny number 25. And I remember sitting there reading that, and it reconnected me, or I should say rekindled the whole reason I went into this business in the first place. And that reason was to help people take control of their bodies and in some way make an improvement in their life. And that was the original reason I was doing this. It wasn't to sell millions of units to Walmart or Asda or Carefor or Tesco.

22:37it was to help people do something that was important to them, to go beyond what they originally thought was possible. That was the whole idea behind the business. And we were using fitness as the vehicle to do that. And the reason I share that story with all entrepreneurs out there is there are going to be these times, these times where they feel like totally insurmountable obstacles. And the way you're going to bust through all the different walls and rocks of nose out there is by never forgetting why you're doing this business in the first place. By connecting your passion and your purpose together to give you that fuel to press on.

23:32That was Alden Mills, the former Navy SEAL, founder and font of Wisdom. Thanks for listening to this episode. I've been your host, Dan Murray-Surter.

23:46If you enjoyed this episode and found it useful, please write us a review and subscribe wherever you listen to your podcast. It makes a real difference and we genuinely love reading what you think. We read every single review. I've been your host, Dan Murray-Serta, and we'll be back next week with more lessons for entrepreneurs and leaders. See you next time.