“Success is the ability to go from failure to failure without losing your enthusiasm.”
attributed to Winston Churchill.
Is the 'fail fast' culture creating irresponsible entrepreneurs? "Fail fast, fail often" is the mantra that echoes everywhere in the startup universe. Startup gurus, investors, and aspiring entrepreneurs are trying to embrace failure as part of the learning process and building resilience in early-stage ventures.
But, how genuine is this? Does the entrepreneurial community really accept failure? Or is it just hype?
asks Anastasia Haralabidou.
But, how genuine is this? Does the entrepreneurial community really accept failure? Or is it just hype?
asks Anastasia Haralabidou.
The Fail Fast! philosophy seems to work well in the startup culture of Silicon Valley [, but] there is a context in a Silicon Valley start up that simply doesn’t apply in the corporate world. [...] There are 3 key subcontexts to the concept of Fail Fast! paradigm that are missed in the typical corporate discussion and execution:
- Avoiding Analysis Paralysis - Experimentation & agile development
- Startup Darwinism - Risk-reward trade-off
- Counterculture Reactionism- Backlash against punishing failure
Avoiding Analysis Paralysis
[...] The need to think through the potential solution from beginning to end, uncover and address any likely issues, present your plan, make revisions and get approval to move forward. [...] By the time you’re through that process the need for your product has probably passed and your competition has made its money and moved on. [...]Sometimes it costs less and takes less time to just try it than it does to develop a formal design and testing plan. [...] A similar [iterative learning process] process can be found in in software development. Agile development also involves the rapid iteration and evolution of the software through short term goals, learning and moving on. It is a process of continuous learning and improvement along the way. Setback are expected and addressed rapidly to move the product forward.
Start-up Darwinism
Startup Darwinism refers to venture capitalists and entrepreneurs rapid exploration of business ideas and either quickly grow the business or shut it down. It’s a strategy where you can win big or cut your losses quickly and move on to the next big idea. There are parallels between the roles of VCs with corporate shareholders or executives as well as entrepreneurs and employees or, as is now vogue, intra-preneurs. [...]There are, however, important differences and perhaps none as important as the mindset. For the entrepreneur and founding employees the success or failure of the project is personal. [...] In the corporate world where such investments are made there are frequently many layers insulating the investors and those doing the work.
Startup Darwinism refers to venture capitalists and entrepreneurs rapid exploration of business ideas and either quickly grow the business or shut it down. It’s a strategy where you can win big or cut your losses quickly and move on to the next big idea. There are parallels between the roles of VCs with corporate shareholders or executives as well as entrepreneurs and employees or, as is now vogue, intra-preneurs. [...]There are, however, important differences and perhaps none as important as the mindset. For the entrepreneur and founding employees the success or failure of the project is personal. [...] In the corporate world where such investments are made there are frequently many layers insulating the investors and those doing the work.
Even so, venture capitalists don’t just through money at projects with the expectation of failure. The expectation is success.
Counterculture Reactionism
Entrepreneurs enjoy taking risks, taking ownership of a project and the results. [...] The fail fast concept provides an acceptance of risk taking, learning and accountability if your ideas and direction don’t work out.
Entrepreneurs enjoy taking risks, taking ownership of a project and the results. [...] The fail fast concept provides an acceptance of risk taking, learning and accountability if your ideas and direction don’t work out.
Values and Watching Your Language
Values define the way we make decisions, approach problems and go about our daily business. [...]Corporate values will often include: Excellence, Innovation, Creativity, Curiosity, Respect, Teamwork and the like. Have you ever seen a corporate value of Failure, Fail Fast or Fail Often?
Values define the way we make decisions, approach problems and go about our daily business. [...]Corporate values will often include: Excellence, Innovation, Creativity, Curiosity, Respect, Teamwork and the like. Have you ever seen a corporate value of Failure, Fail Fast or Fail Often?
PwC suggests both cultures can be bridged and elaborates on "How to bring a fail-fast culture to a slow-move company".
In "Failure is the Mother of Innovation" Baba Shiv argues that
Experimentation and failure are essential to innovation because, by its nature, an innovation is an unknown that can only be discovered through trial and error. Still, for all the startups that follow the mantra of “fail fast,” there are many corporate leaders who see failure as something to be avoided, not embraced. [...]
In corporate hierarchies there is a tendency to give greater weight to the opinions of leaders rather than their subordinates. However, those opinions are usually based on instinct rather than information. The one thing that can trump a higher-up’s opinion is data, and repeated experimentation and failure lead to a lot of it. [...]
Data can also win over the opposition. Those with a risk-averse mindset generally oppose innovating through experimentation, like rapid prototyping or continual iteration. [...]
Organizations also tend to reward big breakthrough successes rather than smaller ones, but those game-changing innovations generally happen after, or in tandem with, the incremental ones. [...] This two-pronged approach relies on exploitation and exploration.
Exploitation [...] means honing competencies [a company] already has to reduce costs and improve the value for customers — incremental innovations. At the same time [a company] invests in exploration, which enables breakthrough innovations.
In corporate hierarchies there is a tendency to give greater weight to the opinions of leaders rather than their subordinates. However, those opinions are usually based on instinct rather than information. The one thing that can trump a higher-up’s opinion is data, and repeated experimentation and failure lead to a lot of it. [...]
Data can also win over the opposition. Those with a risk-averse mindset generally oppose innovating through experimentation, like rapid prototyping or continual iteration. [...]
Organizations also tend to reward big breakthrough successes rather than smaller ones, but those game-changing innovations generally happen after, or in tandem with, the incremental ones. [...] This two-pronged approach relies on exploitation and exploration.
Exploitation [...] means honing competencies [a company] already has to reduce costs and improve the value for customers — incremental innovations. At the same time [a company] invests in exploration, which enables breakthrough innovations.
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