Tragic Accident or Series of Compounding Bad Decisions?

by on April 11, 2013

heliMy worlds collided today as the Mosby helicopter crash was reported in tech news. @verge tweeted, “Texting contributed to fatal helicopter crash, US transportation board rules“.

In fact, the pilot simply didn’t put enough gas in the tank.

Pilots are given to dissecting accident reports in a cold, analytical manner, not for lack of empathy but simply due the overriding imperative to learn from the mistakes of others. Starting a mission without adequate fuel is akin to starting a company without enough cash in the bank. Given good management of the situation — and a board that knows how to operate — there is no reason for it to cause loss of life.

I can assure you that no engine start happens on a casual, “that should be enough gas”. For me, fuel is a, “stick my finger in the tank, do the mental math to measure, calculate range in gallons then a cross-check in pounds, write it on the day log and sign my name beside it” item. The NTSB cited fatigue as a contributing factor and mistakes do happen. And certainly he may have allowed himself to be distracted by that addictive “bleep” of a text message at the wrong time. Humans do not multitask well. The accident report press release did cite distraction as having “likely contributed to errors and poor decision making”. But this merely started a chain of events that warrants closer inspection.

As VCs, we’re similarly diligent about a capital plan for our investments, including building effective syndicates that can accommodate the kind of contingencies that we’ve learned to expect in building category-leading company.

This initial error was compounded by a failure to monitor the fuel level and act accordingly. Fuel is not a one-time checklist item prior to each flight, piloting is a constant review of assumptions and mental preparation of Plan B. And Plan C. And Plan D.

This is like that part of the board meeting where the independent director — having drank less Kool-aid than the CFO — winces at the CEO’s revenue hockey stick and asks, “exactly how long is our cash runway if this miraculous jump revenue doesn’t materialize?”. That’s called doing the range calculation.

Is the weather still adequate enroute and at my destination? What if I don’t get the airspace clearance I’m looking for? Are my instruments all giving me valid information? Does everything sound right? What’s my alternate if headwinds increase my estimated time enroute beyond the threshold? How much daylight do I have left? Is there any traffic on my course? Does my fuel consumption match what it should be? What factors would need to collude against me to compromise my legal minimum 20 minute fuel reserve on landing?

Are customers really delighted and likely to continue buying our product? What if Google decides to compete in our sandbox? Am I getting the straight goods from the CEO or do I need to go talk to a couple VPs? How long is our revenue runway if version 2.0 is delayed another quarter? What milestones must we hit for new investors come to the table? What “soft landing” exits are available if we can’t hit those milestones? 

The NTSB report notes that the pilot did become aware of his fuel level, and in fact reported that he had more fuel than he knew he had to the base operator. I’ve seen people tell a “white lie” so as not to look stupid, but clearly he should not have started the mission. It’s funny how a benign error can become an emergency when we succumb to that human foible of wanting desperately to look good at all costs.

This is the second board meeting after a fundraise, where the CEO knows the current year plan isn’t going to happen, but fundamentally the business still has every reason to be winner in its category. Why bother the board with minor details that shouldn’t ultimately affect the outcome? Experienced board members are thinking, “What acquirers have we built a relationship with?”

Now the pilot made a decision to take-off on the second leg of his mission, with three innocent souls on board trusting his good governance. Knowing fuel was inadequate, he changed his destination to a closer airport with fuel. But his only closer option was a mere 2 minutes closer than the original.  He must have been in a cold sweat, doing the fuel calculation every 30 seconds or so, hoping rather than knowing that it would be enough. And perhaps spending more mental energy thinking about how to not be caught having allowed the situation to get this far rather than focusing on how to not let it go any further.

At this point, it’s like the board that secretly knows the plan is flawed, but the CEO is putting up a good front and shows huge passion for one more pivot to a new business model that will really pay off. Everyone agrees it’s tight, so in a decisive act… management agrees to cut expenses by, by, by 10%!. 

As you might expect, it’s generally straight-forward to land a helicopter almost anywhere if there is a problem; it’s actually unlawful not to land immediately if the low fuel warning light illuminates. Ah, but it is very hard when you’re close to your goal and the whole team is mentally committed to Plan A.

Board members are wondering, “What would a wind-down of operations cost? What fiduciary obligations are outstanding?

The pilot did not land. He kept flying when the machine when told him it was out of fuel. He was only one mile from the airport when it suddenly became very quiet.

I really hate it when a CEO suddenly gets very quiet. Then comes the emergency board meeting where everyone realizes there was no Plan B. 20-20 hindsight reveals that it was a “bet-the-farm on a long shot”.  Too late for a “soft-landing” sale of the Company because the engine is no longer producing power.

Unlike a startup out of money, helicopters actually glide quite nicely. Provided the pilot knows what to do, has practiced recently and has some favourable terrain in mind. Now landing without power is a sphincter test to be sure, but I’m baffled as to why this pilot didn’t have the wherewithal to enter an autorotation. No you can’t get to your goal today, but everyone gets out alive and the aircraft may even fly again.

If a board has the integrity and experience of winding down a company, I’ve seen everyone walk away without any lawsuits or blood on the floor. Unfortunately that requires skilled operators around the table, else the aircraft stops flying rather than being guided to a nice power-off landing. This is a sale of assets. 

I am in no position to judge a professional who has paid the ultimate price for his mistake.  I’ve reviewed the report over and over to ensure I won’t fall prey to the same sequence of events. And I believe that any pilot who truly internalizes this tragedy can escape a repeat of it.

The corresponding question becomes, can we internalize the spectacular startup failures we see in such a way as to assure the companies we’re involved with don’t fail in the same way?