The key life skill for entrepreneurs: fail fast, fail forward
Mistakes and failures are inevitable in the journey of entrepreneurship. Actually, there are two things that lead to real failure:
- Being too afraid to fail, which results in not taking risks and doing experiments. Ultimately, the company does not learn and pivot enough, and gets beaten by competitors.
- Get beaten by failure and give up.
This leads to one conclusion: as long as you keep learning from your mistakes and failures, you are not failing. You are actually succeeding by moving closer to your target. This is a powerful hack because if you keep failing and learning, you will definitely succeed.
Ray Dalio is the founder of Bridgewater Associates, one of the largest hedge funds in the world. What is the secret to Dalio’s success? The article titled “Learning from mistakes can change your fortune — or earn you one” believes that the secret is Dalio’s ability to acknowledge and systematically learn from his mistakes. “I’ve learned that everyone makes mistakes and has weaknesses,” Dalio said in a missive outlining his life principles, “One of the most important things that differentiates people is their approach to handling them. I learned that there is an incredible beauty to mistakes, because each mistake was probably a reflection of something that I was doing wrong, so if I could figure out what that was, I could learn how to be more successful.”
Ray Dalio just came out with a powerful and profound new book titled Principles: Life and Work. This book addresses how to work with reality and failures in detail. I highly recommend this book to all the readers.
Learning from mistakes — easier said than done?
In Mistakes Were Made (But Not by Me), social psychologist Elliot Aronson argues that our brains are constantly working hard to maintain a positive self-image, to believe that we’re doing the right thing. These “ego-preserving blind-spots,” Aronson writes, are pervasive: even prosecutors in police investigations with clear DNA evidence have difficulty accepting that “mistakes were made,” for example. It’s also not always clear exactly what “learning from your mistakes” means in practice. If you don’t have a plan, you can easily end up just dwelling on what went wrong. This might be even worse than simply ignoring mistakes altogether — you don’t learn anything, and you feel bad.”
Inspired by Dalio’s principles and questions, ClearerThinking developed the following six-step process to help address a mistake:
- What went wrong?
- Have you made a mistake like this before?
- What was the immediate cause of the problem?
- What was the root cause of the problem?
- What can you do to correct the problem in the short run?
- What can you do to correct the problem in the long run?
Mindset is the most important thing
Start to view everything as an experiment and treat the results as experiment output so that you can learn something from each experience. Viewing failure as a learning experience takes practice, and I suppose that this is why so many entrepreneurs emphasize the importance of learning to fail.
When Sara Blakely was growing up, her father would often ask her the same question at dinnertime. “What have you failed at this week?” Blakely recalled in an interview on CNBC. “He would be disappointed if we didn’t have many failures. My Dad, growing up, encouraged me and my brother to fail. The gift he was giving me is that failure is not trying versus the outcome. It’s really allowed me to be much freer in trying things and spreading my wings in life.” Blakely’s embrace of failure has helped make her the youngest self-made female billionaire in America. Sara was selling fax machines door-to-door before she came up with the idea for Spanx, the body-shaping undergarments that have become a global sensation.
The co-founder of Instagram, Kevin Systrom, said in an interview, “I think the best thing for any entrepreneur is failure.” Kevin is not just throwing out a nice quote. The failure of his first startup, Burbn, made him pay extra attention to customer feedback and ultimately identified the most successful feature of Burbn, which was photo sharing. From there, the idea for Instagram was born.
In September 2016, Elon Musk watched the failure of his latest attempt at landing his Space X Falcon 9 rocket; ice froze one of the legs and the entire rocket toppled over and exploded. That’s another $60 million up in smoke. What was Elon’s reaction? First, he tweeted “Well, at least the pieces were bigger this time!” Then, he posted a video of the explosion on Instagram. And later, he posted, “My best guess for 2016: ~70% landing success rate (so still a few more RUDs to go), then hopefully improving to ~90% in 2017.” “RUD” stands for “Rapid Unscheduled Disassembly” which is another way of saying “it blew up.” What can we learn from Elon happily blowing up his rockets? Most people would see this as an expensive failure. But Elon is a master of learning by failing, and he expects to fail epically and often.
It doesn’t cost Elon to fail as he builds it into his business model. Each Falcon rocket is expected to be lost anyway, even if he wasn’t testing how to land them. This one had already done its job of delivering an ocean monitoring satellite into orbit, which had already paid for the rocket. This year, there are another 10 to 20 Falcon rockets scheduled for take-off, each paid for by the companies or governments sending cargos into space. With the revenue stream secure, Elon focuses his time on how to test new innovations (like landing the returning rockets safely).
We’ve moved from the industrial age where product development and testing took place before delivery, to the technological age where product development and testing takes place during delivery. In the new paradigm, it’s NOT testing that’s far more expensive. As we can see, Elon is really walking his talk: “If things aren’t failing, you are not innovating enough.”
