Don’t fall for the “fail fast” fantasy – take intelligent risks instead

Contrary to what you’ve been told, successful entrepreneurs don’t embrace or celebrate failure – they do everything humanly possible to avoid it

May 31, 2018

Don’t fall for the “fail fast” fantasy – take intelligent risks instead
  • Being told to celebrate and embrace failure is bad advice based on myths
  • Successful entrepreneurs usually succeed before they fail (and the most successful don’t fail at all)
  • Failing fast and often isn’t an option in several legal jurisdictions
  • Genuinely innovative people and businesses take intelligent risks – not reckless ones

If you’re anything like me, your social media feeds spend quite a bit of time telling you about the virtues of failure. Every week or so another business leader, brand or blogger will pop up with a post encouraging me to “fail fast and fail often”, “fail forward” or “fail better”.

Whether you work in technology, in marketing or in the agency world, there’s a fashion for talking about failure as the new success. In fact, it’s become the orthodox way of thinking about innovation, entrepreneurship and workplace culture. If you’re an entrepreneur, you need to throw yourself into ventures and notch up some ambitious failures before you can connect with that home run to make you a success. If you’re an agency, you need to be incubating lots of tiny agencies with different specialisms or business models, most of which will fail but one of which might put you ahead of the next big marketing trend. And if you’re a marketer, you need to risk failure with every emerging marketing technology and platform, just in case one of those failures turns out to be a successful way to connect with your audience.

The failure mantras are repeated from the stages of TED and other conferences, and in the pages of memoirs and self-help books. They promise to deliver something that’s become a holy grail in much thinking about business: a “start-up mentality” that helps companies of any size stay dynamic, energetic, a driver of disruption rather than a victim of it.

Is failure really all it’s cracked up to be?
This view of failure is very popular because it’s very attractive. It’s inherently liberating to be told that, if you screw up or fall short, it doesn’t matter; that it’s actually contributing to your future success; that the more speedy and spectacular your failure, the better. It’s so attractive an idea that I’d almost certainly go along with it if it weren’t for the fact that I actually know several entrepreneurs running start-ups and small businesses. And when I talk to them about how wonderfully liberating it is to fail, they don’t react in quite the way that they’re supposed to. They go a bit quiet and pale, look at the floor, potentially reach for another drink, and maybe even mutter about mortgages and credit card bills.

That’s because people who are actually in the start-up mindset tend to see the failure fantasy for exactly what it is: bad advice based on a network of myths about entrepreneurship and innovation. It’s advice that tends to be spread almost entirely by large businesses that can indulge the idea of failure because it would take some seriously hard work for them to catastrophically fail themselves. The failure fantasy is dangerously misleading for anybody looking to start a business – but it’s also misguided and misleading for any business interested in making effective use of innovation and new technology.

Don't believe the myth: successful start-ups didn’t start out by failing
The first plank of the failure fantasy is the myth that the most inspiring and innovative leaders got to be that way by starting out as serial failures themselves. This is one of those ideas that feels inherently true – but when you take a quick look at the evidence, it doesn’t stack up.

List the most successful, innovative and admirable entrepreneurs that you can think of – then try and track down their failures. It’s a lot more difficult than you might think. The first business that Larry Page and Sergey Brin launched was Google, a company that was such a rapid success that it was receiving $100,000 cheques before it even had a bank account to pay them into. Mark Zuckerberg? Launched Facebook while still in college. Jeff Bezos’s first business? Amazon of course, a company he launched immediately following a successful career on Wall Street.

Steve Jobs is often cited as an example of failing forward, despite the fact that his first business venture was Apple, and within a few years of starting it, he and Steve Wozniak had more or less invented the microcomputer. Sure, he was forced out of Apple in 1985 – but forced out with enough money to fund Pixar and build a computer platform business that would eventually take over his original venture.

Success enables failure – not the other way around
Of all the entrepreneurs that tend to be associated with failing fast and failing often, the one that it rings most true for is Sir Richard Branson. The LinkedIn Influencer has written about failure being written into the DNA of entrepreneurs – and he knows what he’s talking about. Dig into Sir Richard’s history and you will find genuine failures. Virgin Cola? Virgin Cars? Virgin Brides (which he, hilariously modeled for)? They all did fail – and pretty quickly as well.

Only a fool would argue that the risk-taking and speed of action that characterised these ventures weren’t also fundamental to Sir Richard’s big successes: Virgin Records, Virgin Airlines and Virgin Media. However, even Sir Richard doesn’t quite fit the “fail fast, fail often” fantasy. That’s because every one of these failures came after he’d already amassed a fortune in the music business. They didn’t enable his initial success. They were enabled by it. He was even forced to sell the record business that first made his fortune, in order to keep Virgin Airlines airborne at a critical moment. It wouldn’t have been possible for him to take big risks and fail unless he’d scored that big success first.

Sir Richard himself talks about Student magazine, which he launched at the age of 16, as his first business failure, since he failed to secure a deal with a major publishing house to keep the magazine in business. It’s a very qualified failure, though. Student was a high-profile success when it first launched. It secured interviews with rock stars like Mick Jagger, and led directly to Sir Richard launching a highly profitable mail-order music business that paved the way for Virgin Records.

Failure isn’t the same as learning from mistakes
This isn’t to say that these successful business leaders didn't make mistakes early in their careers – and didn't learn from them. All of them did, and all of them still do. Amazon’s business model, for example, is founded on innovating quickly and decisively and then pivoting and optimising when things don't work out quite as planned. However, this optimisation process is nothing like failure. A failed venture can’t be refined and improved and learn from its success, because it’s finished. If you want to benefit from hindsight you have to do everything you can to avoid the big ‘F’ – to make sure you stay afloat.

Contrary to the failure fantasy, falling short does have consequences. If your first risk doesn’t come off, it could seriously compromise your ability to take other risks further down the line. What the careers of successful entrepreneurs really show is the value of refusing to fail. That means you have to choose the risks you take very carefully, not leap into the unknown on the basis that failure doesn't matter.

The consequences of failing are real
The concept of failing fast and failing often travels freely around the world via digital media – but the legal implications of business failure are very different depending on which country you’re in. Being declared bankrupt is tough anywhere – but it can be significantly less tough in the United States, where an insolvent person usually keeps their home (since residential property is mostly protected) and can be out of bankruptcy within three months. In the UK, by contrast, bankruptcy usually lasts for a year and any assets (including the roof over your head) can be sold to pay off your debts. The bankruptcy laws in Ireland are tougher still.

This is perhaps the reason why bloggers in Silicon Valley are so much more gung-ho about failure than entrepreneurs in the UK and Ireland. The consequences of that failure are very different. In particular, once you’ve been declared bankrupt in the UK, you’re actually barred from founding another company for at least 12 months. Failing fast and often isn’t just more damaging – it can become legally impossible.

Is failing fast really the best way to innovate?
Things are different, of course, if you are funding your failures with money that you already have. And that’s perhaps why constructive failure is such a popular idea within businesses that have budgets to spend on speculative bets. So, if failing forward isn’t such great advice for small businesses and start-ups, might it still be a valid innovation strategy for larger companies?

Unfortunately, there’s a problem here too. A consequence-free view of failure feels liberating and empowering in principle, but it’s not how great ideas usually evolve. It’s constraints that drive creativity and necessity that compels innovation. Ultimately, there’s no greater constraint or necessity than the requirement to do everything in your power to avoid failure. It’s the street fighting urge to survive that teaches great entrepreneurs to keep thinking on their feet, refusing to give up until the last moment, thinking about new ways to make things add up. When failure isn’t an option, you’re permanently incentivised to come up with others. And that’s where a lot of start-ups’ energy and success comes from.

Take away the concept of failure by making it something to celebrate, and you ultimately encourage reckless and irresponsible thinking. This might produce some great and original ideas, but with no determination to make those ideas work at all costs, they ultimately have far less chance of succeeding. Are people really prepared to give their all to keep them afloat? Taking risky approaches just because you can isn’t actually a great innovation strategy.

Could failing fast damage your brand?
No matter what we might tell ourselves, failure always has consequences. For big companies with supportive CFOs those consequences might not involve people losing their jobs or income, or having to give up on homes or dreams. But they can be damaging nonetheless. When marketers take a ‘fail forward’ approach to new technologies, we might not do lasting financial damage, but if we target audiences on platforms where we’re not welcome, or in ways that don’t fit our values, we could do considerable damage to the brands we work for. Firing out new initiatives without constraint can quickly get in the way of strategy and focused thinking.

I work in a tech business that’s gone from a start-up to the world’s largest professional network, and in a marketing team that prides itself on being bold and creative. However, I don’t find my colleagues or my managers urging me to fail fast and often. Instead, LinkedIn is built around the concept of taking intelligent risks: having the freedom to pursue new launches and initiatives, but taking ownership and responsibility for making sure they are risks worth taking. As a marketer and as an employee, that invites me to consider all of the likely outcomes. I don’t see that as a restriction. Instead, it’s a great way of testing my conviction for what I’m doing: am I taking risks based on my judgment that they’ll make my business, my team and I more successful? Or am I taking them just because I can?

A true start-up mentality involves being fully aware of the risks that you run – and weighing up why they are worth running anyway. It’s seeing failure for what it is that drives truly meaningful innovation and enables genuine courage in decision-making. Pretending otherwise isn’t bold, creative or dynamic – it’s just dangerously wishful thinking.