Since when did failure become good business?

Why do we do it to ourselves?
Why do we do it to ourselves?
Image: Getty Images/ Florian Gaertner
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We have been swept away in a fever to fetishize failure. We immortalize our losses in blog posts, lament our undoings at community events such as Fuckup Nights, and turn them into keynotes at full-blown conferences like FailCon. By learning to accept failure as part of the creative process, we have gone into overdrive and have come to worship failure as something worthy of pursuit in and of itself.

Ironically, in the process, failure has become good business.

This is never more true than in Silicon Valley. Fabled startup incubator Y Combinator describes itself as “failure central,” filled with “experts at both avoiding it and living with it.” 500 Startups mentor TJ Sassani goes one step further and advises startups to “fail fast, fail often, and fail by design.” And of course there’s Facebook’s founding motto, “Move fast and break things.” How have we become a society that seems to embrace failure as a desirable destination?

The US always exhibited a high tolerance for trying, failing, and trying again. This can be traced back to the founding story of the country itself. Thousands of families moved from east to west in the 19th century, taking extraordinary risks, grappling with illness, devastating weather, crop failures, and land rights in pursuit of the American dream. That same pioneer spirit is alive and well in the entrepreneurs who once again migrate to the West Coast, this time to Silicon Valley: innovating, struggling, trailblazing their version of a successful future and better world.

However, many other cultures around the world exhibit a strong socio-economic penalty for failing. Europe, Asia, India, and South America all penalize failing, often with draconic bankruptcy laws and strong social stigma. This has led global entrepreneurs, who on average have less than a 40% chance of even modest success, on a mission to make failing more socially acceptable. Some countries have even changed laws pertaining to failure and the resulting business bankruptcies.

In the process of lionizing failure, we seem to have overshot the goalpost and turned it from a non-desirable but accepted risk into the goal itself.

The problems with fetishizing failure are wide and deep. To begin with, failing is a deeply unpleasant personal experience; there is nothing glorious or satisfying about failing. Moreover, it has profound effects on our psyche and sense of self. Numerous psychological studies over the last decades have shown that, for most people, self-worth derives from a belief of being competent—and convincing others of it, too. Achieving success therefore becomes critical to maintaining our self-worth, and failure becomes a major stressor on our mental well-being.

Classifying our experiences as failures also feeds our cognitive biases. The brain is hard-wired to protect us, and thus remembers our failures more than successes. This focus on past mistakes can inhibit reasoning when exploring new possibilities, causing us to seek out information that matches our negative bias. A classic example is the mentality of “We tried something like this in the past, and it did not work—thus it will not work now”. This feeds a vicious cycle that leads to poorer results in the future.

Using our failures as teaching tools is equally fraught with problems: You don’t learn all that much from failures, as they only give you insight into a specific approach that did not work. For most issues, there are dozens of ways to solve a problem and millions of ways to fail—not much is gained by eliminating one specific option out of a vast pool of possibilities.

Further, both failures and many successes are deeply contextual: They are tied to personal circumstances, time, and space, as well as a myriad of other factors. Therefore it is rather futile to generalize high-level insights from failures. In the specific case of startup failure, this notion is compounded by the importance of timing. Bill Gross, founder of IdeaLab, where he and his team incubated hundreds of businesses, analyzed his startup successes and failures over the last 22 years and found that “timing accounted for 42% of the difference between success and failure.”

When and if you do fail, you ought to apply rigor in your analysis in order to gain actionable insights, not just turn the story into a pop-culture event. Look to identify and analyze patterns which will serve you in the future rather than just doing a post-mortem of a singular event. Research by Philip R.P. Coelho indicates that by identifying and recognizing patterns, entrepreneurs can gain valuable insights for future actions. Peter Sims, author of the book Little Bets: How Breakthrough Ideas Emerge from Small Discoveries expands this argument into a process-oriented methodology of running many small, carefully designed experiments with clear hypothesis attached to them to maximize learning from failures.

In the end, if you decide that you want to embrace failure, do it upfront as a conscious part of your strategy. Conducting small, well-designed experiments where failure is expected will help you maximize learning from failure and better control the outcome.

Just try not to do it on purpose.