WPC cover story
“I just kind of fell in with the wrong crowd and got good at making bad decisions.”
— Michelle Cirocco (MBA ’08)
It’s OK to say the F-word
In entrepreneurial circles, ‘fail’ is not a dirty word — and it’s often an essential part of growth and success.
By MATTHEW DEWALD
A

decade ago, Aaron Matos (BS Management ’95) was riding high on eight straight years of 100% growth with his human resources web service, Jobing.com. The company had grown to have a presence in six markets, and he was rolling out the addition of a dozen more.

“Then we overexpanded right in what was the teeth of the recession” of 2008, Matos says. “We won what I affectionately call ‘the bad timing award.’” What had appeared to be a sea of plenty dried up in front of him as the economy crashed and hiring markets disappeared.

“You go from being a genius to an idiot in about three months,” he says.

If you visit any company’s website, you’re unlikely to read about moments like this, when everything’s gone wrong. Executives’ bios on “About” pages dependably construct a concurrent narrative in which people go from one success to another. Failure is not part of the story.

But as these alumni from ASU’s W. P. Carey School of Business will tell you, failure inevitably is part of the story. Bad timing, wrong choices, misaligned skillsets, and misunderstood problems all come with the territory when leading a business. As their experience shows, what matters is how we fail, what we learn from it, and how it makes businesses stronger and leadership more capable over the long term.

Take Matos as Exhibit A. Today he is the founder and CEO of Paradox.ai, which provides an assistive intelligence platform that helps companies improve their interview acceptance rates, exceed hiring goals, and reduce hiring time. It serves more than 400 organizations in more than 60 countries. Among them: McDonald’s, Delta Air Lines, and CVS Health.

“I just kind of fell in with the wrong crowd and got good at making bad decisions.”
— Michelle Cirocco (MBA ’08)
WPC cover story
“I just kind of fell in with the wrong crowd and got good at making bad decisions.”
— Michelle Cirocco (MBA ’08)
It’s OK to say the F-word
In entrepreneurial circles, ‘fail’ is not a dirty word — and it’s often an essential part of growth and success.
By MATTHEW DEWALD
A

decade ago, Aaron Matos (BS Management ’95) was riding high on eight straight years of 100% growth with his human resources web service, Jobing.com. The company had grown to have a presence in six markets, and he was rolling out the addition of a dozen more.

“Then we overexpanded right in what was the teeth of the recession” of 2008, Matos says. “We won what I affectionately call ‘the bad timing award.’” What had appeared to be a sea of plenty dried up in front of him as the economy crashed and hiring markets disappeared.

“You go from being a genius to an idiot in about three months,” he says.

If you visit any company’s website, you’re unlikely to read about moments like this, when everything’s gone wrong. Executives’ bios on “About” pages dependably construct a concurrent narrative in which people go from one success to another. Failure is not part of the story.

But as these alumni from ASU’s W. P. Carey School of Business will tell you, failure inevitably is part of the story. Bad timing, wrong choices, misaligned skillsets, and misunderstood problems all come with the territory when leading a business. As their experience shows, what matters is how we fail, what we learn from it, and how it makes businesses stronger and leadership more capable over the long term.

Take Matos as Exhibit A. Today he is the founder and CEO of Paradox.ai, which provides an assistive intelligence platform that helps companies improve their interview acceptance rates, exceed hiring goals, and reduce hiring time. It serves more than 400 organizations in more than 60 countries. Among them: McDonald’s, Delta Air Lines, and CVS Health.

In other words, he’s doing just fine and thinks he’s probably a better leader today because of the mistakes he made in 2008.

“One of the things that people fail to understand is everything can look like a failure in the middle,” he says. “The converse of that’s [also] true: Everything can look like a success in the middle. We’re all playing in a long game of life. No one wants a failure. You don’t play to make a mistake. I’ve never made a purposefully bad decision, but it is ultimately how you look at how the world reacts to it. I think partly we sometimes believe that we control way too much of the world. We don’t. We control what we can do.”

We asked Matos and other alumni about the business lessons they’ve learned from enduring cautionary tales.

Lesson 1: Own the failure
As stories of failures go, Michelle Cirocco (MBA ’08), chief social responsibility officer at Televerde, has one that cuts to the core of her personal and professional identity, one she spent decades not talking about. When she got her entry-level position with Televerde, she was incarcerated.

After moving as a young woman from upstate New York to Arizona, she says she “just kind of fell in with the wrong crowd and got good at making bad decisions. … I describe it as a deep desire for upward mobility and a misguided entrepreneurial spirit. I wanted more out of life than what my life was going to allow for, so I made the choices that put me in place for the day that changed my life forever, and that was when I was sentenced to seven years in prison.”

She calls the experience “shattering” and says her first step in changing directions came from taking honest stock of the gap between who she was and the better version of herself she wanted to be. She stopped concerning herself with fitting in with the people around her, set goals, and focused on education, earning an associate’s degree while she completed her sentence and snagging a job with Televerde, which helps companies drive, target, and engage sales prospects. Part of the company’s success comes from partnering with the corrections departments of Arizona and Indiana to provide job training and employment opportunities for women looking to build new lives for themselves after incarceration. They begin in sales roles from the inside and, like Cirocco, have the opportunity to go where their talent takes them after they get out.

In David Freedman’s case, owning a failure meant acknowledging a weakness in his skill set. Fresh off his undergraduate degree, Freedman (BS Real Estate ’05) launched Tempe 12, a swimsuit calendar featuring ASU students. It took off, expanding throughout the Pac-10 and bringing millions of visitors to a website that Freedman didn’t know how to monetize. That’s when he met Chris Stark (MRED ’11), and the two figured it out and created Freestar to work together monetizing more websites. Initially, the pair started scooping up other online content developers to turn them into moneymakers, but there was a problem.

“We realized quickly that we’re not great at editorial, and we’re not great at content,” Freedman says. “We drove those sites into the ground, and they became worth nothing.”

Rather than double down on the bad bet of their editorial skills, they accepted it and recognized they had gotten good at monetizing a website. They pivoted to a business model of providing that service to others, and Freestar is now thriving. It landed the No. 1 spot on the 2019 Inc. 5000 list as the fastest-growing private company in America. Inc.’s accompanying headline about the company told the story: “How Did This Phoenix Tech Company Achieve a Staggering 36,000 Percent Growth? A Mistake Had a Lot to Do With It.”

“It’s tough to accept failure,” says Freedman. “At the same time, I think it’s not necessarily failure. This maybe sounds a little odd, but you can’t be the best at everything. And I think it taught us to focus on what we’re best at and be world-class at that, instead of trying to be everything to everyone.”

Freedman applied the same mindset of honest self-examination when Freestar’s success in landing new clients wasn’t matched by its success in retaining them. They were losing one of every two new customers.

“We took a look in the mirror and said, ‘Hey, you know, it doesn’t matter how great we are at selling and bringing people in. If we can’t keep them, then this business is never going to succeed.’”

They increased investment in account management and customer service, “and since we’ve made that change and adapted, we haven’t lost a client — not a single one — in 13 months and counting,” he said in late 2019.

“I’ve never made a purposefully bad decision, but it is ultimately how you look at how the world reacts to it. I think we sometimes believe that we control way too much of the world. We don’t. We control what we can do.”
— Aaron Matos (BS Management ’95)
“I’ve never made a purposefully bad decision, but it is ultimately how you look at how the world reacts to it. I think we sometimes believe that we control way too much of the world. We don’t. We control what we can do.”
— Aaron Matos (BS Management ’95)
In David Freedman’s case, owning a failure meant acknowledging a weakness in his skill set. Fresh off his undergraduate degree, Freedman (BS Real Estate ’05) launched Tempe 12, a swimsuit calendar featuring ASU students. It took off, expanding throughout the Pac-10 and bringing millions of visitors to a website that Freedman didn’t know how to monetize. That’s when he met Chris Stark (MRED ’11), and the two figured it out and created Freestar to work together monetizing more websites. Initially, the pair started scooping up other online content developers to turn them into moneymakers, but there was a problem.

“We realized quickly that we’re not great at editorial, and we’re not great at content,” Freedman says. “We drove those sites into the ground, and they became worth nothing.”

Rather than double down on the bad bet of their editorial skills, they accepted it and recognized they had gotten good at monetizing a website. They pivoted to a business model of providing that service to others, and Freestar is now thriving. It landed the No. 1 spot on the 2019 Inc. 5000 list as the fastest-growing private company in America. Inc.’s accompanying headline about the company told the story: “How Did This Phoenix Tech Company Achieve a Staggering 36,000 Percent Growth? A Mistake Had a Lot to Do With It.”

“It’s tough to accept failure,” says Freedman. “At the same time, I think it’s not necessarily failure. This maybe sounds a little odd, but you can’t be the best at everything. And I think it taught us to focus on what we’re best at and be world-class at that, instead of trying to be everything to everyone.”

Freedman applied the same mindset of honest self-examination when Freestar’s success in landing new clients wasn’t matched by its success in retaining them. They were losing one of every two new customers.

“We took a look in the mirror and said, ‘Hey, you know, it doesn’t matter how great we are at selling and bringing people in. If we can’t keep them, then this business is never going to succeed.’”

They increased investment in account management and customer service, “and since we’ve made that change and adapted, we haven’t lost a client — not a single one — in 13 months and counting,” he said in late 2019.

Lesson 2: Apply the lessons
Karen Marshall (MBA ’18), entered ASU’s MBA program intending to propel her 20-year corporate career in high-end travel and financial services. She graduated as an entrepreneur.

Two days before she got her degree in 2018, Marshall bought Colletti Design, an Arizona-based designer and fabricator of handcrafted iron doors, steel and glass doors and windows, driveway gates, iron railings, and more for upscale homes. In January 2020, the company became Colletti Doors, a name change that reflects how she is streamlining and focusing Colletti’s operations in response to areas in which the company was not performing optimally so that the company can significantly scale up its operations.

“I like to say that we had to scale back to scale up,” says Marshall, Colletti’s president and CEO. The company has stepped back from a broader product mix to focus on doors, paid more attention to documenting processes that were mostly in people’s heads, and adjusted how it addresses quality issues, such as a defect in a door or damage to it during installation.

“Our customers have high-quality standards, as do we,” she says. “When we discover a quality issue, we fix it. There was a time where we were fixing it but not looking closely enough at the root cause. I had to experience that before focusing the team’s efforts, shifting their attention away from just firefighting and into root-cause problem-solving.”

She also had noticed overlooked opportunities to improve the supply chain. When a door was ready to ship, the company’s highly talented artisans were heading to a local hardware store for supplies so they could build a custom shipping crate that would get torn apart at the destination. The company now outsources that work.

Marshall resists describing such instances as “failures,” but she says it’s important to apply the lessons they offer.

“A failure is when you don’t learn from mistakes, or you don’t look at it as an opportunity to improve,” she says. “I look at this business and every time something doesn’t go right as an opportunity to improve.”

Matos, the CEO and founder of Paradox, says he spent a lot of time thinking about what his company could have done differently after his experience with what he calls his “bad timing award.” One lesson that he took away is just how much having a resilient business model matters.

“Be prepared for anything,” he says. “Even when the sun is shining brightly, life can change. When the music’s playing so perfectly, you sometimes forget to invest in the next stage. You need to be thinking about what’s next and what’s coming.”

“A failure is when you don’t learn from mistakes, or you don’t look at it as an opportunity to improve.”
— Karen Marshall (MBA ’18)
Lesson 3: Move on
One of the first employees that Freedman ever hired erred in a way that cost the young company about $250,000.

“He made an honest mistake, and we learned from it,” Freedman says.

At a company-wide retreat in the summer of 2019, that same employee got a gift related to his favorite NFL team to mark his third anniversary with Freestar: a Green Bay Packers football jersey with his nickname on the back, “Quarter Mil.”

“It’s one of those things when you’re celebrating and you can laugh,” Freedman says.

“Hopefully, it encourages the team to push the envelope and realize, ‘Hey, if this guy cost the company a quarter of a million and they’re celebrating this, then if I make a mistake, A, it’s going to be OK, and B, I don’t need to pretend I didn’t do it. I can raise my hand and talk about it so everybody can learn from it.’”

Cirocco, the chief social responsibility officer with Televerde, spends her days evangelizing for the benefits of moving on from failure and allowing others to do so. She meets with business and political leaders, does public speaking, is a guest on podcasts, and otherwise speaks to anyone willing to listen about the benefits of what she and Televerde call “second-chance hiring,” both for the women themselves and for companies that are having trouble filling positions as the unemployment rate stays low.

“Everybody who goes to prison needs a job when they get out,” Cirocco says. “The No. 1 predictor for recidivism, which is the rate at which people go to prison, is joblessness. If we can enable people to develop and build meaningful and rewarding careers and be able to be financially independent and take care of themselves, they would be less likely to return to prison.”

The benefits extend beyond the businesses and their employees to the communities in which we all live, she suggests. “If more businesses would get involved in doing what Televerde is doing in some fashion, it can make a huge difference in our society,” she says.

If helping others move on from failure — whether with a funny but reassuring Packers jersey or with a life-changing employment opportunity to an incarcerated person — is good for the professional development of others, it is equally good for one’s own professional development. That’s the foundation of advice that Cirocco got from a counselor when she was overwhelmed by her first term in the MBA program at ASU, a place she wasn’t sure she even belonged.

“He said to me, ‘Look, Michelle. The MBA isn’t designed to be easy. This is a top school, and it’s designed not just to tell an employer that you’re smart enough to do the work, but that you’ve got what it takes to do the work.’ I was like, Wow. That was one of those moments. I went home that day and had to make a decision.” In finding the wherewithal to persevere, she added to the professional skill set that continues to serve her well today.

Although the stakes have been different for Paradox’s Matos, he credits a version of the resilience lesson for the success he’s had on his entrepreneurial path.

“You’ve got to fall, and you’ve got to be OK falling and knowing that you’re going to be OK,” he says. “That’s the thing that comes with years of doing this. You realize [that the] ‘If it doesn’t kill you, it does make you stronger’ thing is probably true.”