TRANSCRIPT
So, failure sucks.
Anybody that tells you “failure’s good” or “it’s fine to fail” obviously has never done it. It’s not fine to fail. It’s terrible. But, if you’re afraid to fail, then you’ll never succeed. And that’s slightly different.
The lean startup model actually has a really neat thing about failure — it allows you to fail fast and recover. But people confuse lean with, “Oh, the goal is to fail fast.” No. The goal is not to fail at all, but the odds are you will fail. But because you will fail early, it allows you to do a pivot or even a restart.
In the old days what we used to do is we would raise money, write a business plan, spec the product, then go have engineering build the product, alpha test, beta test, ship the product, have a great board meeting. People would high-five, the VP of marketing would say “Great launch!”, the VP of sales wouldn’t say anything. Six weeks later, another board meeting, finally turn to the VP of sales: “great pipeline.”
Well, what that really means is we’re not actually making the plan, but it sounds great. Repeat for five or six board meetings until somebody fires the VP of sales. New VP of sales comes in, and in another six months: “What’s the problem?” “Must be the positioning.” Fire the VP of marketing.
Now we’re a year or two down the road, we’ve burned a ton of cash, and you finally realize if you step back, the problem wasn’t the individuals. The problem was we made about market, or customers, or pricing, or features, or competition that we just executed on because it was written in the plan.
Failure in that case is pretty dramatic and serious and permanent, often. If you think about how we do it in the lean method, we frame all these things as hypotheses and from day one we’re testing our hypotheses#8202;—#8202;and most of them are wrong. But getting them wrong in week one is much different than getting them wrong in year one when there’s a ton of cash and engineering and whatever. It’s just night and day. It’s just a completely different mindset.
In the lean method we don’t assume anything is correct: we assume that we have some hypotheses that very quickly need to get data to turn a faith-based institution into a fact-based institution.
Lean is all about creating evidence based entrepreneurship, which turns failures not into crises but just a normal part of the process.