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The “Failing Fast” controversy

March 12th, 2010

Mark Suster wrote a provocative post about a common phrase in the entrepreneurial community called “Failing Fast.” He says:

Failing fast “is so self centered it winds me up. Tell that to the person who wrote you the $50,000 of their hard earned money and entrusted you to try your best. Fail fast? How does your brother-in-law feel about that?

Fail fast = quit and give up easy = spaghetti against the wall = no clear strategy going into your business = no ability / willingness to try and pivot as market conditions change = easy way out…”

First, his tirade smacks of hypocrisy. Does Mark re-up on all his portfolio companies when they are having trouble getting traction, or does he triage his portfolio and let the losers fail? No, each company in his VC portfolio is like strand of spaghetti and his strategy is to have one or two of them stick. Like all successful VCs, he plays the gorilla game and makes all of his profits by doubling down on a few winners and folding quickly on the losers.

Second, he misconstrues the point. His second paragraph is way off base. Failing fast = learning and pivoting. Think Odeo + Twitter. Were the initial investors of Odeo happy or unhappy that Jack Dorsey’s decision? Failing fast has nothing to do with abandoning your fiduciary duties to your investors. This is a serious and false accusation to make of entrepreneurs who talk about “failing fast.”

Third, I’ll admit that “failing fast” sounds bad. But that is on purpose, to be intentionally provocative. When we look at successful startups like Amazon, Google, Ebay, etc., their success looks obvious and easy. Revisionist history makes the rise to glory appear like smooth sailing. To combat this myth, “failing fast” focuses on the risks and, more importantly, the learning that startups and entrepreneurs must do. The unit of output for a startup is validated learning. You have a general theory, based on a set of hypotheses. You test them in order to reduce your risk as quickly possible, and pivot as necessary.

Mark’s idea about “fast” is wrong too. It isn’t about folding the company quickly; it’s about failing (and then pivoting) from smaller tests way before the whole thing is doomed.

Fundamentally, Mark misses the point. Of course, you can learn from success and that is preferred route. It is just very rare. Failures large and small are a reality, but the real question is how you deal with them. The real point is this: the opposite of success isn’t failure, it’s mediocrity.

So what do I tell “my brother-in-law who invested $50,000”? I share my hypotheses and the results of my experiments with him. And hopefully SocialFeet is more like a Twitter and not like an Odeo, but in either event, we’re along for the ride together.

1. technology, 3. et cetera

  1. lhtorres
    March 12th, 2010 at 06:54 | #1

    Mike, you nailed it: “Failing fast has nothing to do with abandoning your fiduciary duties to your investors. This is a serious and false accusation to make of entrepreneurs who talk about “failing fast.”

  2. March 12th, 2010 at 10:36 | #2

    The point of failing fast is to ensure you have time to try new directions. The process is not “fail fast, go home”, it is “fail fast, learn, pivot, fail less fast, learn, pivot, fail even less, learn, pivot, …” until you find that there are no pivots left (you ran out of money or there really is no business) or you've found success.

  3. March 12th, 2010 at 11:24 | #3

    Hey thanks! I am now seeing that many of my other points have been covered by others too. But this point about fiduciary duties is among the most important, and one that seems to be missing. I am glad that it struck you too.

  4. March 12th, 2010 at 11:28 | #4

    Yeah. It seems that Mark understands things pretty well except for two things: “fast” and “fail.” As you point out, “fast” means learning before you run out of time! And “fail” is a necessary risk to take in order to know when to pivot. (Mark is trying to get people to distinguish between pivoting and failure, but that isn't possible.)

    Cheers!

  5. John
    March 12th, 2010 at 12:30 | #5

    I couldn't agree more. I think Mark wrote this purposely to stir up some controversy and attention. I think he's learning what it takes to make yourself stand out in the blogosphere… he just wants deal flow. Otherwise, he really doesn't understand product development, which I find hard to believe given his background.

  6. March 12th, 2010 at 14:09 | #6

    Listen, I understand the lean startup movement and I agree with it. I think MVP, “Launch and Learn,” etc. are all valid.

    My issue is that people who were not part of the “memo” on what “fail fast” means have morphed the definition. It's an irresponsible tag line because it's used out of context.

    Regarding your assertions about me and about VC, you're a bit off base. GRP as a firm has a track record of sticking by companies in very tough situations. No company needs to stay in business if things aren't working and no VC needs to guarantee unconditional investment. But both have a responsibility to investors, employees and customers to do their best and not quit easily. I talk to many entrepreneurs every week. I must tell you that many of them have misunderstood the “fail fast” mantra. And that is destructive to our industry.

  7. March 12th, 2010 at 14:14 | #7

    John, I'm not doing it to be controversial. I understand the INTENTIONS behind “fail fast” and I sign up 100% to what people wanted the definition to stand for. Unfortunately the definition is morphing and second-order entrepreneurs don't understand the principle. All I really want is a rebranding of the exact same content so that the tag line isn't misconstrued. re: deal flow – that's why I blog. But not why I wrote this. I wrote it because I'm passionate about the topic and tired of people telling me there just going to shut down their product and move on to the next thing because they want to fail fast.

  8. March 12th, 2010 at 14:17 | #8

    I wish I could support your statement and I'm sure it's true of yours. But please understand that there are MANY people out there now talking about “failing fast” as an easy way to “move on to the next thing if this doesn't work.” I've seen that with many YCombinator graduates. I've seen it with first time 23 year olds who have adopted the mantra. I've seen it with people who have raised $1 million and are struggling. I have nothing against lean startup, I have nothing against people who fail (as I have) and nothing against changing direction when things aren't working.

  9. lhtorres
    March 12th, 2010 at 14:32 | #9

    “The definition is morphing and second-order entrepreneurs don't understand the principle.” I suspect this is also true. So there needs to be to talk about failing fast in terms of a) nimble learning, b) decisive decision-making, and c) accountability. However, at least the snippet Michael has used as a starting point, none of these caveats about “second-order” entrepreneurs are clarified. That, I should think, would be your first point of business.

  10. March 12th, 2010 at 14:40 | #10

    Hi Mark,

    Thanks for visiting my blog. I think that this kerfuffle is truly turning
    around semantics. As you point out, there are clearly wide areas of
    agreement. However, I am still stuck trying to figure out who these
    self-centered entrepreneurs really are. Two points: how did they fool their
    friends, family and outside investors at the outset?! And they don't look
    like anyone that I know. In fact, every entrepreneur I know from a failed
    company has gone with the ship and has been the last one to get the memo
    that the dream is dead.

    I think that you've struck a nerve with your post because these ambiguous
    reference to really poor behavior just don't ring true. And left
    unaddressed, the post leaves the impression that these examples, even if
    they exist, are some kind of widespread problem. I have not seen evidence
    of that.

    Cheers,
    Mike

  11. John
    March 12th, 2010 at 14:44 | #11

    Ok, that makes sense. I would agree that 'branding' of the mantra could be misinterpreted. But, I think it was chosen purposely to strike a cord with entrepreneurs… for example:

    “Fail fast”, what? That doesn't make any sense, why would an entrepreneur want to “fail fast”?! Ahh, I get it, figure out whether something is working as FAST as possible.

    Personally, the mantra has struck a cord with me and I approach product development differently because of it. Just like any teachings, the subject must understand the meaning behind it…

  12. March 14th, 2010 at 19:15 | #12

    The version of this one I heard was from Arno Penzias when NEA was backing a company I was involved with. He said, “the secret to success in technology is to minimize the time between failures.” This reflects that the goal is not to fail fast and be done, but to test something, discover that it doesn't work (because most things don't), pick yourself up off the floor, and get into a quick iteration loop that has fast cycles of learning. It applies to business model learning just as much a testing technology, although it can often take longer to figure out if a way to make money is bunk than to discover that an engineering approach doesn't work.

    -Tim

  1. September 5th, 2017 at 17:16 | #1
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