Recently, I read an interesting book by Peter Sims, “Little Bets,” which brings up a really important question: can failure, in fact, take us further than success? The answer is: yes, if we know how to deal with it. While interviewing the executives at Amazon, General Motors and Google, as well as successful musicians, architects and comedians, Sims discovered one thing they had in common. All of them used the same approach of relentlessly “making little bets” to test their new ideas, even if they were not sure about their success. Most of these bets ended up as failures, but five or six out of 100 turned out to be the breakthroughs. According to Sims, in most cases, there’s no mysterious genius behind the great achievement, but perseverance and the willingness to take small risks.
In this series of posts, I’ll analyze how failures nurture success and describe how learning through failures can help you develop your business into a real innovation machine. Through hardship to the stars!
The idea of “successful failure” is familiar to many successful software entrepreneurs. For instance, Randy Komisar names “the culture of constructive failure” as the main reason that Silicon Valley became the world’s innovation center.
In his “Getting to plan B” framework, Komisar suggests including in the business plan the ability to quickly adjust it. All plans have assumptions, and Komisar’s idea is to focus on the most risky assumptions first and devise your work in a way to test your risky hypothesis in the market as soon as physically possible. Businesses can hardly afford big failures financially, so the key is finding a way to minimize the cost of experimentation.
Getting feedback as fast as possible can save you a lot of time and money you could otherwise lose by going in the wrong direction. That sounds obvious, so obvious that you might be tricked into thinking that you are already doing your best job there. Sometimes it’s the case, but oftentimes some thinking out of the box can help you save a lot of effort and money. For example, in the software business, a traditional approach is to develop the software and then try to sell it. An approach in the spirit of Komisar’s ideas would be to create a quick prototype, a mock demo, or a simple “slideware” and sell a contract with an advance delivery date. That’s, of course, if your biggest risk is market adoption. If you can’t sell it because nobody needs it, well, you’ve just saved a lot of money on developing software that nobody needs.
Some people are defensive and want to buy more time to tweak their solutions before presenting those solutions to the real world. This big bet works for a selected few visionaries, and the media is always quick to highlight those stories. But the truth of the world (at least in the eyes of Peters Sims, Randy Komisar and yours sincerely) is that in most cases, you’ll get much further with small bets, fast feedback and applying your boldness to facing a failure, rather than to doubling the failing bets.
To be continued…