How can we extend this to include the value of invalidation?
Chris Guest

Failure is not success. Failure is failure.

Look, I get why the Lean Startup movement adopted “Fail Fast, Fail Often” as a mantra. Still, I think it’s been bastardized well beyond the original intention. Failure should never be *encouraged* as a goal in and of itself; it should only be *tolerated* as a natural consequence of the actual goal of learning.

Similarly, value can’t come from what you *don’t* create. Let’s take your example to the extreme: instead of waiting two quarters, why not invalidate the project on the very first day? He then successfully saves the company $20M — a 5% increase in value and six months earlier to boot! :-)

Ultimately, this isn’t about value — it’s about risk. Yes, you do improve your chances of success by finding out what not to do, but that in and of itself isn’t value-generative. Instead, rapid (in-)validation increases the number of iterations, which reduces the variance associated with your activities. This makes the overall invesment more attractive simply because it occupies a better position on the risk/reward curve.

I share your goal of changing the corporate innovation incentive structure, but I wouldn’t replace it with failure. Instead, I’d like to see it replaced with speed and accuracy. I’ll write more on this soon…