On Understanding and Dealing with Massive Failure and Bankruptcy

This is a blog about contending with failure. First, a story about dragons.

For all my many misgivings as a father, I’m satisfied with the one thing I do consistently well — read a bedtime story to my children almost every night. I suspect one of the reasons I do this is because I often find the simple metaphorical wisdom in children’s stories surprisingly helpful in providing some levity to my own “adult” problems. A book by Jack Kent called “There’s No Such Thing as a Dragon” is one such story.

In the book, a boy wakes up to find a small Dragon on the edge of his bed. With the innocence and honesty of a child, he tries to tell his parents that there is a dragon in the house, to which his always busy and preoccupied parents respond, “There is no such thing as a dragon.” As the story progresses, and the boy’s attempts to inform his parents about the dragon remain in vain, causing the boy to ignore the dragon himself. Eventually, the dragon takes up the entire house, lifts it up, and moves it down the block. It’s only then that Billy’s parents notice the very big Dragon, which is the exact magic required to reverse the spell and bring the dragon back to a more manageable size in this case the size of a kitten.

The metaphor is — by ignoring our problems, they become so large and detrimental that eventually they can no longer be ignored.

In an essay titled “The Psychology of Invisible Monsters,” Elizabeth Knox explains this well: “The things the invisible monster represents are things we don’t want to acknowledge. Like our fear…Like our paltry measures to make ourselves safe, we’ve made our monsters invisible.” She continues, “With an invisible monster, you don’t know when you’re in danger and when you’re safe — even if you retreat to your fortress, you can’t be sure you haven’t locked the monster in with you.”

One of my own invisible monsters was the fear of having one of my companies fail. To be clear, I don’t mean failure to launch. I mean the failure of having actually made a go of it for many years, and then watch it crash and burn into what is otherwise referred to as “going under” — aka — bankruptcy.

Bankruptcy, to me, was akin to the word Voldemort. I would cringe at the sound, or even the thought of it. As a lifelong entrepreneur, I knew it existed, but would give it no credence. It only existed as something that could happen to someone else — the ultimate sign of weakness, unwillingness, and incompetence of an entrepreneur. That was until it happened to my business Kosan Travel.

In my business career, I’ve always flown close to the sun. My friends call it “redlining” which just means I operate and live with a great amount of “risk” in the spirit of chasing opportunities. “Nothing risked, nothing gained”; “Fortune favours the bold”… You know, that type of mentality.

At this point in my career, I can’t even count the number of times I’ve pulled through with much-needed capital for a business in the eleventh hour of an otherwise total collapse.

I would not ever let a business fail. Of course, that is the proper attitude for a founder and CEO. You are responsible for your shareholders’ money; it is your fiduciary responsibility to deliver the absolute best results you can — something that should never be taken lightly.

This is honourable.

I realised, however, that the dark side of honour is egoic pride, and a fine line exists between the two.


After nearly 24 months of fighting tooth and nail to keep one of my businesses alive during the pandemic, an effort that financially and mentally costs me dearly, I realised I wasn’t just acting honourably for my shareholders. I was also acting out of fear that if this business went under, I’d be personally embarrassed, my cherished reputation would be tarnished, and I’d be greatly challenged to recover and start another business ever again.

I can still feel my nervous inner chills in those final weeks and days when the bank said, “No more. We’re seizing the accounts.” Sometimes, I’d even feel nausea and vertigo from standing on the edge of the proverbial cliff. Other times, I couldn’t breathe under the perturbing weight I felt on my shoulders and chest. At night my heart raced at such a pace that I felt like I was running a race, and I’d wake up in a cold sweat. I could never shake the  visions of a catastrophic, “cinematic” ending — where it all erupts in my face and I’m blown to smithereens — played repeatedly in my mind.

Clearly, I’ve watched too much TV.

Once it happened, it was, in a way, anticlimactic. In fact, the bankers were incredibly sympathetic. They said this happens all the time and offered their services and guidance. They even offered their time and attention to just “listen” on a few occasions. Most shareholders, who are professional investors and able to rationalise risk-reward, understood the quite literal bad luck of a once-in-a-lifetime pandemic on my business. There certainly was no public spotlight highlighting my incompetence (frankly most people didn’t care because they mostly had better things to do), and my business colleagues simply responded to the news with, “Okay, what are you doing next?”

Through the past 15 years, I’d turned the failure of a business into a large dragon. And once it happened, much like in the story, the dragon became kitten-sized again.

Let’s be clear, it wasn’t fun and it’s not something I want to ever go through again; however, I now know I can. Not to mention, I learned a tremendous amount about the process of insolvency and the many opportunities to restructure therein.

In Canada, we don’t have the infamous Chapter 11 form of bankruptcy they have in America. Here, we have what’s called insolvency, it’s a purgatory of sorts. A place to go for the sins of your entrepreneurial ineptitude, but where the company’s soul can still be redeemed by the almighty gods of capitalism.

As such, and for the sake of complete clarity, this purgatory is where my business finds itself. Although it’s been almost a year since the bank took possession, I’m still working on a solution to reclaim it. These are very, very slow processes, and challenging to operate within, making a divine resurrection possible, not probable. With that said, I’d like to digress back to the realities of business failure, as well as the mental side of experiencing it.

In Brad Pitt’s acceptance speech at the Screen Actors Guild Awards, he said, “I’ve been banging away at this thing for 30 years. I think the simple math is, some projects work and some don’t. There’s no reason to belabour either one. Just get on to the next.”

One of the reasons somethings work and others do not  has to do with the reality of luck playing into outcomes.

In his bestselling book “The Psychology of Money”, Morgan Housel talks about how luck and risk are siblings. “Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. You are one person in a game with seven billion other people and infinite moving parts.”

This is counter intuitive to both the power and the ego of will and my tendency to think I can control a business’s fate — if not through smarts, then through willpower alone.

One of the problems with that is that when things don’t work, I place the blame squarely on myself. I beat myself up by overthinking the bad decisions that certainly must have caused the bad outcomes.

In his book, Housel also cites the story of Bill Gates and one of his original business partners, Kent Evans. As teenagers, both had the tremendous, good luck of a one-in-a-million chance of having early access to a computer. Sadly, Kent Evans had the tragic bad luck of a one-in-a-million chance of dying in a mountaineering accident. An extreme example that luck cuts both ways.


According to Nobel Prize-winning economist Robert Shiller, we can’t know “the exact role of luck in successful outcomes.” This is why, Gates points out, “Success is a lousy teacher.” And, inversely, so is failure, because as Housel concludes, “ it reduces thinking that decisions are terrible [good or]  when sometimes they just reflect the unforgiving realities of risk.”

According to Forbes Magazine, about half of all small businesses fail within five years, and only about a third of the survivors make it long-term after that. To drive this perspective home, and make myself feel even better in the process, according to data released by banking behemoth J.P. Morgan Asset Management, since 1980, 40 percent of public companies in the Russell 3000 Index lost 70 percent of their value and never made it back.

In business and investing, and again, according to Housel, a lot of things work this way. It’s not always the meat and potatoes of a business that drives the big success. Contrarily, as Housel explains in “The Psychology of Money”, “It’s the long tail — the farthest ends of a distribution of outcomes have tremendous influence, where a small number of events can account for the majority of outcomes.”

He cites Snow White and the Seven Dwarfs being the game-changing tale for a struggling Disney. The iPhone for  Apple, and Amazon Web Services for retail giant Amazon. And for every tale, there is massive failure. One example that comes to mind is the incineration of investor capital that was the Amazon Fire Phone. Bezo did not apologise for this wildly expensive failure and, in fact, he doubled down, saying there would be more to come in the spirit of creating massive wins.

This is why great CEOs continue to take risks, creating and acquiring new verticals in their businesses. And this is why my colleagues simply pulled me out of the ashes of my burnt down business and said, “What’s next?” Eventually, something will work, and it will work very well. Of course, it would be wonderful for that to happen, but to focus on that outlier success alone would grossly miss the greater lesson in failure.

Distress is how we learn to handle the world and, as I recently heard a friend say, angst is the price of admission. Healthy stress and struggle are not to be avoided at any cost. This is my biggest qualm with the mental-health awareness movement. My view is that for all the good the awareness of our mental crisis in society addresses, it sends the wrong message overall — that good mental health is equated to total happiness, relaxation, no triggers, and bliss. Nothing could be further from the truth. Good mental health is the ability to understand, and be able to accept, that life is hard, that we will experience a spectrum of emotions, and that we can exist in that balance. Furthermore, by facing stresses and fears head-on, we free ourselves from them because we learn to handle them. This brings us back to our metaphor about invisible monsters. They become bigger when we don’t acknowledge them and, unfortunately, our societies — and I cannot stress this enough — have turned safety into a profitable business that is sold back to us daily.

Ultimately, the idea that we can’t handle stress and obstacles is a limiting belief that sabotages our personal growth and potential. As human beings on planet Earth, we will constantly be defeated; then, we will learn, grow, take on new challenges, and be defeated again. Like the seasons, this cycle of personal growth is a natural part of the human experience over the course of a lifetime. The question is, will we heed the lessons or wallow in the defeat?

From my experience, two things are clear: There is a human tendency, a primal disposition even, to create large metaphorical dragons for future failures where there are either none at all or they are very small. And once we experience them, devoid of personal ego, there is a simple process of defeating them and growing: Acknowledging the problem, knowing when to call it quits and leave good enough alone, experiencing the associated emotions of rage, pain, sadness, regret and even guilt, and then move on.

The journey down the yellow brick road is one of many small trips, with many destinations, where the long tales of success are unexpected, and luck and risk are equal travel companions. No one thing will define your success or failure unless you let it.  Ultimately, you only control your effort and response to the events of your life and while your travel down the yellow brick road, as podcaster Rich Rolls once said, “It only unfolds two bricks at a time.” You have to choose to keep going!

Thanks for reading

Be Well