fm BizJournal.com 02 Oct 12 enhanced by Peter/CXO Wiz4biz
For most entrepreneurs—and let’s face it, for most anyone—failure is painful. But if you’re an entrepreneur, setting out to create something original & sustainable, failure is not just inevitable, it must become a foundation for your success. Think of it as “failing forward”.
Fail Fast. My first venture in 1998 focused on home delivery of everyday household consumables via the Internet, and it lasted only 40 days. While it was a clear failure, we were lucky enough not to be in a position where we had to hunt for traditional 9-to-5 jobs. But we did have to ditch this original concept for one that was better.
Get Better each time. My co-founders and I shifted our energies to an e-commerce “SmartBox” that would eliminate the “sorry we missed you” – a Post-it note from UPS. This venture failed after 400 days when the Ecommerce bubble burst. We lasted 10x longer this time and we were able to turn the failure into a Web-based access control company, which is still in business 4,000 days [100x longer then our first] and has been profitable for the past 8 years. To achieve my eventual success, I had to learn from each setback and apply these lessons to improve my odds of success on the next venture. This is what I mean by “failing forward”. Here are 6 rules for failing forward that will work in large enterprises and startups alike:
1. Focus on Learning. If you’re going to fail, you’d better learn something valuable in the process. Think of it as exchanging “financial capital” for “knowledge capital”. To make sure you’re getting a fair trade, it’s best to formalize your learning plan. Keep a list of key assumptions and how you plan to test them. Form an innovation group that does this. The ideas you get are your “return on knowledge” for the time you spend.
2. Start Small & Simple. Big ideas are fine, but it’s wise to learn in small increments – in order to keep the losses affordable. What is the very smallest thing you can do? Figure that out & do it.” Often the smallest way to express a new concept is through a sketch or scenario cartoon. They take minutes to draw and help your target Customer imagine the experience you intend to create.
3. Test Multiple-Options. A common error of startups is to seek only confirming data about their single concept. Rigorous assumption testing – by contrast – requires a keen mind for both confirming & non-confirming data. A simple way to do that is to test multiple alternatives to the solution you believe will work best.
4. Iterate Rapidly, so you don’t lose your Momentum. Once you learn a key assumption is incorrect, change your solution quickly and start the learning process again. These are sometimes called “learning loops”. Keep the prototype simple, and you’ll be able to evolve the concepts quickly to find out what works & what don’t .
5. Keep your Alpha in stealth mode. Beta made it cool to share pre-commercial versions of a solution with potential Customers, but even Google doesn’t show you its alpha version. Alpha is the clunky early prototype that approximates the user experience, but is held together on the back end by chewing gum and duct tape. It takes only days or weeks to assemble, and often not scalable, but it can be operated for a few weeks to see what live users really think.
6. Speak the Truth about Failure. Another common error committed by entrepreneurs is to withhold what they perceive as “bad news” from their teams. They have a hard time saying, “You know that story I told about us changing the world? Well, we’re still going to change it, but we’re going to have to do it in a different way than I thought.” There is no shame in failing, unless you “fail to learn”. It’s OK to mourn a concept that seemed promising, but don’t let a single day pass before you share your new reality with the team and enroll them in helping to find the better path. If they joined the venture, they are entrepreneurs too, and they’ll intuitively understand the need to “fail forward”.
7. A few Failure Quotes:
“Failure is only the opportunity to begin again, only this time more wisely.”~ Henry Ford
“I have not failed. I’ve just found 10,000 ways that won’t work.” ~ Thomas Alva Edison
“Success is the ability to go from failure to failure without losing your enthusiasm.” ~ Winston Churchill
“It is fine to celebrate success, but it is more important to heed the lessons of failure.” – Bill Gates
“Think like a queen. A queen is not afraid to fail. Failing is another stepping-stone to greatness.” – Oprah Winfrey
“There are no secrets to success. It is the result of preparation, hard work and learning from failure.” – Gen. Colin Powell
Comments: Do you have any stories how Failing, helped you to succeed in the long run?