How to Harness the Power of Failure


For a startup, “failure” is often a dirty word. But without failure companies can’t grow.

The reality is that for startups — where lasting triumph immediately after first product launch is a rarity — failure can be a powerful driver of innovation and success within organizations of all types. It just takes the right approach.

Here are three ways you can turn your failures into innovation and opportunities.

Fall in Love with a Problem, Not Your Solution

Paul Sloane, an author on innovation, creativity and lateral thinking, says one of the hardest lessons that startups learn is that their initial idea is always wrong. This means, he says, that founders need to focus relentlessly on the problem they are solving and avoid becoming enamored with the notion of a silver-bullet technology or idea.

Even if your company has a concept or a business plan for a wonderful new device or service that’s going to change the world and attract huge numbers of customers, the first step is to show it to customers and get their feedback. If it fails with the customer, find out why.

“The people that do badly are the ones who fail and then keep trying the same thing, only harder,” he says. Sloane says it’s natural after a failure to fall into a mindset of “if I only I tried harder” or “if only I spent more money.” But that’s a trap. “In fact, it would never have worked — you just needed a different approach,” he says.

Learn From What Worked — And What Didn’t

This type of feedback-iteration loop is at the heart of the lean-startup method for building companies, a philosophy popularized by author Eric Ries that encourages founders to make better and faster business decisions.

The idea is for startups to use the lean approach to evolve quickly and create a viable product that customers want to use. In this approach, failure that happens quickly and cheaply is a valuable tool for improvement.

“It’s accelerated Darwinism,” Sloane says. “You’re trying to adapt quickly enough to survive. You’ve got a limited amount of money, time, resources and energy to put into this project — and you’re trying to find the solution quickly. That involves repeated learnings.”

He says the most successful firms are those that are fastest at learning, most adaptable and most creative in taking the feedback they get from the marketplace and adjusting their idea.

Even if an idea wasn’t workable in the first place, he says, it often has a seed of something valuable within it and it just needs to be refined and adapted in order for it to succeed.

He notes that the smash hit mobile game and entertainment brand Angry Birds was the 53rd product released by Finnish company Rovio. “They had 52 games which were either flops or not great successes before they got to Angry Birds,” he says. “That’s the lesson for innovative companies and startups. Your first several efforts are very unlikely to succeed.”

Check Your Ego

Sloane says the opposite approach to this method of rapid iteration is to try and develop your product or service in secret, secure patents, then launch the final product and hope that it is a success in the marketplace. As an example, he cites the early-2000s unveiling of the Segway, which was developed in secret and overhyped before it fell flat with consumers.

“Although it had some modest success, it didn’t quite work,” Sloane says. “That’s probably because they didn’t show it to the right people early enough and get broader involvement in it,” he says. “They were so worried about someone else stealing their idea that they just kept it all under wraps.”

Sloane says ego can be a barrier for entrepreneurs to accept failure and feedback — or to even seek it out in the first place.

“You need a big ego to be an entrepreneur because you get so many knockbacks. They’ve got a tremendous, driving personality, which means they don’t delegate, they don’t listen to other people, they don’t share the way they should,” he says. “They don’t hire people who disagree with them — they hire people who get things done and follow instructions because they think they have all the answers and they just need doers.”

However, even strong-willed founders need people that will challenge them and say, “I think there’s a better way of doing this, I think we can find a better solution here.”

“They need people who are constructive rebels within the organization who will challenge their way of thinking,” he says.

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