“Failure is a prerequisite to learning.”
Counterintuitive, right? Not according to The Lean Startup, where this outlook on failure is integral. As this methodology, which focuses on failing fast, failing often and failing forward, gains acceptance across the country, it increasingly shapes product development and drives startup growth.
Still, converting the fear of failure into a compelling force for further innovation demands a significant shift in thinking.
Eric Schweikardt, founder and CEO of Modular Robotics, which creates robotic construction tool kits for kids, has embraced the power of failure through his individual experiences – so much so that he posted the “fail early, fail often” principle in the company’s offices and builds it into every company product.
“I only get middling results from hearing other people’s stories,” Schweikardt said. “It’s executing on ideas, marshalling a team, figuring out what’s necessary and failing forward on all of those ideas that are the hard part. It’s an extremely powerful way to help people succeed: to give them the tools and the context to solve problems on their own.”
But how can entrepreneurs respond when a failure seems catastrophic and insurmountable? Barbara Corcoran, real-estate mogul and Shark Tank investor, spent all of her first year’s profits on making videotapes that advertised homes for sale – only to be left with a failed marketing tactic and a collection of unsold tapes. What she learned is that, if you examine them carefully and capture the critical lessons, even flops can be the source of tremendous inspiration.
“I can take a hit and it’s almost like my IQ is too low to lay low,” Corcoran said. “I kinda pop back up and am like, ‘hit me again, I’m pissed now.’ I remember thinking, ‘What an ass I am! How could I have pissed away our only profit?’ That night, my husband … a Navy Captain … had just come back from South Korea, where he played war games every year. He said, ‘It was amazing this year. We played it on this new government thing called the internet.’ As he started telling me what it was, it clicked. I registered corcoran.com, and it was almost four years till my first competitor put their listings online. That ability to pop back up is true of anyone who succeeds in their field.”
Sometimes, fear of failure can be even more paralyzing than the reality of failure itself. In a recent Harvard Business Review article, “Increasing Your Return on Failure,” authors Julian Birkinshaw and Martine Haas highlight a risk-averse culture as a key obstacle to innovation and success of a company. As Birkinshaw and Haas put it, those who become too overwhelmed by the idea of failure overlook the value to be extracted from measuring and improving the failure ratio as a company.
They write that, “In a return-on-failure ratio, the denominator is the resources you’ve invested in the activity. The numerator is the ‘assets’ you gain from the experience, including information you gather about customers and markets, yourself and your team and your operations. Increasing these is the other way to boost your return. We’ve found that when people adopt the right mindset, they can increase this ratio – not just by minimizing the downsides of projects but also by maximizing the upsides.”
See? It’s simple math.
It’s not just about failing fast and failing often. As an entrepreneur, it’s about being aware of your failures and creating a culture willing to capitalize on them. By drawing critical lessons and scientifically reshaping your products methodology, your startup can fail forward.