Why The ‘Fail Fast’ Mantra Needs to Fail, Fast

Posted on Mar 11, 2010 | 251 comments


losing handsYesterday I wrote a post about how much capital your startup should raise.  In that post I was talking about how it is a bad strategy to be underfunded.  In general when capital is available take it (provided it’s on the right conditions and from the best people from whom you can raise).  It’s also bad to raise too much, too early.  If you’re interested in that topic I cover it in the article linked previously.

I made a diversion in the article that I shouldn’t have taken.  I talked about the Silicon Valley memo that has been circulated for the past couple of years that says you should “fail fast.”  What I said was:

“I’ve even heard people repeat this bullsh*t Silicon Valley mantra about “failing fast” which is horse puckey.  The line goes like this, “well at least you know early that your business isn’t going to work and you didn’t have to waste 2 years and $1 million trying to bang your head against a wall.”  That 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?

And how do you think the next person who’s thinking about writing you a check going to feel about that sort of cavalier attitude with their money?  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 = today’s management mantra that will be laughed at in 10 years.  Who started this meme?  I say define a strategy, test it up front and pivot if you’re not getting the traction you had expected.  Fail fast on your own dime.”

Obviously when a meme like “fail fast” forms and conventional wisdom builds in support of it you’re likely to get attacked for saying, “the emperor has no clothes.”  But I just said it.  Naked.  I shouldn’t have covered it in the last post because I should have stayed focused on the topic of how much money to raise.  Here’s an example of one comment I received,

“So you think it’s better to plan and build for years without testing it on the market and then make a big splash release and hope for the best?”

Nice logic, hey?  If I say “fail fast” isn’t the right strategy then it must be a long, slow release process, right?  I’m not attacking anybody’s religious beliefs.  I’m trying to enter the debate with what I found to be a very destructive guiding principle that young people have started to believe.  The following highlights what I do believe and why fail fast is wrong:

What is the right way to build a startup?

  • Define a market problem that you believe you can solve
  • Research this market by doing market sizing, looking at existing products, talking to customers and deciding how you will make money
  • Validate that you can make money before starting. This means looking at what your buyer pays for similar products now, what the history of other people who have tried to monetize in this way have experienced, what your costs to acquire customers will be and what you believe you can make over the customers’ lifetimes.  These are all assumptions – nothing more.  I believe passionately that if you don’t do a financial model you shouldn’t spend any time or money building a product.  You want to talk about the ultimate “fail fast” – how about if you fail before you’ve spent any money building product because you validate there isn’t a big enough market or you can’t make money?
  • If you believe there is a market then build a prototype product that you can show customers, investors and potential employees.
  • From there build the MVP (minimum viable product).  I believe in launching with a small set of features and learning from the market before you spend too much money building out a feature rich product or before you put serious capital to work.
  • If you validate that there’s a market then go for it!  If you don’t believe that your product is resonating then pivot and find one!

Why fail fast is wrong, irresponsible, unethical and heartless:

  • I’ve read all of the fail fast, fail cheap articles.  I’ve heard the insufferable speeches at conferences.  I understand that many people argue that “fail fast” just means launch products and learn from customers.  Fine.  Then let’s call this “launch and learn” as well as “adjust and pivot” when adoption doesn’t happen.
  • The problem is that when you brand something that will be interpreted differently by people who weren’t part of the zeitgeist when the memo went out about what “fail fast” meant then we educate the next generation of entrepreneurs to do things the wrong way
  • How do I know this?  Because I have met so many young entrepreneurs who tell me, “we don’t need business plans anymore, they’re a waste!  We’re going to put our product out there and fail fast!” [note: business plan to me does not equal long Microsoft Word document.  It means a financial model that sets a strategy for how you’ll make money and spend money] or they tell me, “we’ll launch a bunch of products and see what works.”  That is the old “throw spaghetti against the wall and see what sticks” approach.  It’s intellectually lazy and I doubt many great companies are born this way.
  • Worse still I’ve actually heard the following from somebody that is reputable and whom I actually like, who has raised $1 million, “we don’t want to raise $3 million to get to the next round.  Either this thing has legs and will grow fast and we’ll raise at a very large price or we’re going to ‘fail fast’ .”  Me, “What?  Really?  What about the money you raised?  Aren’t you worried about that?”  Him, “Well, what do you want us to do, stick around for 3 years trying to build something that we know isn’t working?”  I can’t make this stuff up.  People think that way these days.  It’s wrong.  It’s immoral.  It’s irresponsible.  That’s hard earned money you’ve raised, not house money at a casino that you get to put on lucky number 16 and see if it comes up.
  • As Reece Pacheco appropriately said in his comment to yesterday’s post, “Know who else you shouldn’t fail fast with? Paying customers. My business has a bunch of them, and a lot more users who really depend on our service. They’re relying on us. Failing fast may be an out for our bootstrapped lives, but it’s not an option.”  Think about that.  People gave you money to use your service.  And they’ve invested their time and trust in you.  Failing fast is to disrespect the very customers who placed their trust in you.  It reminds me of the line, “blowing up your customers” and the disrespect bond traders had in the 1980’s for their clients in the book Liar’s Poker (One of the greatest business reads ever.  If you haven’t read it you should.  See the link for a list of quotes from the book including the now ubiquitous, “Big Swinging Dicks”)
  • We have taught a generation of young entrepreneurs that “failing fast” is ok.  It’s quick and easy.  It’s a way out so that you can focus on your next big business idea.  Why waste your time on this one?  Don’t get me wrong – failure is OK in my book.  I’d rather you try something that doesn’t work and learn from it then to never have tried before.  I personally think that second-time entrepreneurs are better because, as I’ve written, “good judgment comes from experience, but experience comes from bad judgment.”
  • But my message to young folks – if you take somebody’s money you have a responsibility.  I raised too much money at my first company and regretted it.  Long after the Dot Con 1.0 party was over and I knew that I personally wasn’t going to make as much as I thought I would – I stuck around.  I felt a moral obligation to spend this money that I had raised responsibly.  The market changed totally so my assumptions were all off.  Goldman Sachs had told me we would IPO in a year.  That wasn’t going to happen.  But I signed up for making the company work and sometimes that commitment trumps your current economic incentives.  Not forever – but for a period of time.  Taking money = obligation and commitment to try your best to make a return.

How should you deal with a business that isn’t working?  I’m not talking about when your product isn’t working, but your company.  When you know that you don’t have a future.

  • Get your cost base as low as you can as quickly as you can
  • Communicate early to investors that you don’t think the business can be successful.  Make sure you say you haven’t given up and that you’ll stay to help find a way to find the best possible outcome for the company.  But that you don’t want to raise any more hard earned money if you’re convinced that new money won’t have a good return
  • Consider whether there are any buyers for the company.  If not, are there buyers of the intellectual property?
  • In the worst case scenario is there a “face saving” exit for $1 somewhere?  This will save everybody from the time, expense and risks of a bankruptcy
  • Remember that legally the order of payments (I’m not a lawyer, double check with a bankruptcy lawyer) is employees, creditors, equity holders
  • Better that you handle things until the bitter end and preserve your most valuable asset – your reputation
  • There is nothing wrong with saying respectfully to investors, “if I can find a buyer for this asset would you be willing for me to take a very small piece of the purchase price so that I can incentivize my team to stay together through this difficult period?
  • If the company needs a very small amount of money to get through this shut down period you should ask your investors for it.  Make sure to tell them that it is for a shut down and/or attempt to recover value for the assets.  Tell them you’ll only ask once.  Only ask once.
  • Make sure your employees know what is going on.  You have an ethical responsibility not to surprise them.  MAKE SURE that you pay all of their expense reports that are outstanding.  In the dark days of shut downs I’ve seen many junior members get burned.  This is wrong.

So can somebody with better branding skills than I please come up with the new term that we can all use for what we all know we want to see – customer development, MVP, rapid iteration, pivot and learn.

OK, now you can attack me …

  • http://bothsidesofthetable.com msuster

    Thanks, Phillip. appreciate it.

  • http://bothsidesofthetable.com msuster

    Please point them out!

  • http://bothsidesofthetable.com msuster

    thank you, thank you, thank you

  • http://bothsidesofthetable.com msuster

    I agree with the ideas that people had when they created the mantra. It's just that others have taken on the tag line and taken it out of context. Many people have taken it out of context. I think it's time to rebrand it. That's all. My “rant” comes from the cavalier attitude I have seen displayed by some entrepreneurs towards shutting something down quickly and easily if it doesn't work.

  • thereviewguy

    Paul Graham encourages to build startups/products that are more like non-profit, ie. build the product, without worrying too much about business model: it seems to be opposite to what you believe. But I do believe both ways work: they just work for different types of entrepreneurs. I will post a blog entry on 2above.com later about “visionary and opportunist”

  • http://www.scrollinondubs.com Sean Tierney

    Mark, spot on. I nominate “accelerate discovery” as the replacement mantra. The essence of “fail fast” may have had good intentions but I agree that it will be misinterpreted by people who weren't in the room when it was coined.

    I read a great book recently called “Getting to Plan B” and I'm 3 chapters into another one, “4 steps to the Epiphany” – both are recommending the same advice only with different vocabulary: prove/refute hypotheses as early as possible so you can uncover the truth about your assumptions and react accordingly. Customer development, Plan B, pivoting – whatever you want to call it, it's about chipping away all the uncertainty that obfuscates the optimal model.

    sean

  • OSU_Matt

    Hey, great post Mark. As a future entrepreneur, I think your point is extremely valuable on multiple levels. First, I think having the committment to all sources of money (whether friends/family, angel, or venture) and really looking out for their best interest 100% is crucial to gaining LONG-TERM credibility, even if your first deal doesn't work. I'm glad you mention how you stuck with it in your first company even after it looked like YOU weren't going to get everything, and I assume this helped you in a multitude of ways for your second venture. Also, it is a good reminder (sobering in some regards) on how difficult success is and the sacrifices good/honest/successful entrepreneurs make, especially when I know many of us aspiring entrepreneurs just focus on how whatever we do will be a huge hit and everything will be glorious. Again, keep up the great blogging, I am learning a ton from reading it.

  • http://futurephilanthropreneur.wordpress.com/ sthomps

    Wow, I didn't think this post would generate this much heat around the blogosphere. I think the issue here is simple, and that is that most people that read this blog are infatuated with “Lean Startup” and take “failing fast” as part of their mantra. And so poor Mark, who posts a very simple point, gets attacked because of the misinterpretation of these readers. The “failing” has nothing to do with pivoting or iterating or whatever you want to call it, it has to do with not just giving up first try. Mark makes a great point in one of his comments below

    “The fact remains – many young entrepreneurs these days are building FNACs (features, not companies) and many smart investors know and lament this.”

    This is the main issue at hand, that most new entrepreneurs are not building companies anymore, they are merely building a new analytics/marketing/social/retweet etc… feature that is not a viable business. If it hits it is luck. That's why these new entrepreneurs believe in just tossing it out and “failing” when it doesn't work out. There is no fight, no determination in the people that believe this. The number one thing lacking is integrity, which Mark wrote a post on previously. This is the issue, not the criticism of any “learning practice”.

    Excellent post and thanks for being such an realistic VC, it's nice to see.

  • http://twitter.com/pauldyson Paul Dyson

    Great to see this article. As a technology entrepreneur I have two problems with fail fast in addition to the excellent points you make.

    Philosophically the problem with fail fast is the focus on failure. Where's the “play to win”? Where's the grit, determination and balls to make things work? In short, where's the entrepreneurship? In my previous business our mantra was “don't minimise the risks of failure, maximise the chances of success”. The great thing about MVP, rapid iteration, pivot and learn is that this is not a 'death or glory' approach but rather a series of small, positive, informed steps.

    Practically the problem with fail fast is its just so easy to fail in a start-up business. You get your first release ready but you need to sign a customer. You get your first customer but that's not enough to support your business. You grow your customer base but you're struggling to balance company growth with sales growth. And so on … its often hard to see what 'success' actually looks like. If at each of these points you're actively look to call “failure” because that means you have succeed in failing fast, you might as well not bother. Save your money, your time, and that of your partners and customers and go and get a job for a management consultancy where you will get paid to spout crap like “fail fast”.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    It's a shame that “Fail Fast” is now being misinterpreted to the point you're describing. I do think this is an effect of being in Silicon Valley. In other markets (such as Montreal where I'm based) we don't see enough entrepreneurship, in part because of a fear of failure. So working to make failure more acceptable (or at least help people understand the benefits of trying, even if the result is failure) is important.

    As for what to call “this whole thing” I'd be careful about “Launch – Learn” as well. To me that says “Just launch something as fast as you can and figure it out after that.” That's also extremely dangerous because it lets entrepreneurs believe they can just launch something without any upfront research. In fact, if I was interpreting that language I'd say it goes against your point on the importance of planning.

    So I'd propose – “Learn – Launch – Learn” or “Plan – Launch – Learn” – which basically means:

    * do your homework
    * launch quickly
    * learn after

    (It's just not the sexiest language in the world!)

    If a startup launches with little to no preliminary “homework” phase I'd be very worried. When people pitch me ideas, I don't tell them, “Go build that!” I tell them, “Go do your homework.” But do it quickly and aggressively so you can either “fail fast” or move on.

    And regarding “fail fast” I actually believe it really means, “fail before you even start building something”. The point being that in the “homework phase” if you can't get past certain clear gates (do people have a problem you're solving, can you make money, etc.) you don't go forward (and consequently you haven't built anything, you haven't raised dough, you don't have customers – so you're not causing the harm you describe.)

    Finally, I do have to echo some other people's comments with respect to the fact that if entrepreneurs have so grossly misinterpreted “fail fast” as to be wanton with investors' money, employees, customers, etc. — if that's truly their attitude — then they're not ready to build companies, raise money and be successful. They have to “do their homework” simple as that…

  • http://bothsidesofthetable.com msuster

    Well done. Been there.

  • http://bothsidesofthetable.com msuster

    Thanks, Susan. I believe that 10 years from now “fail fast” will sound as dumb as the stuff we all said in the late 90's. Thing is, I'm older and wiser now ;-)

  • http://bothsidesofthetable.com msuster

    Paul is a smart and successful guy who is to be admired. But if he said this then I'll have to disagree on this point. Thank you for pointing it out.

  • http://bothsidesofthetable.com msuster

    Thanks, OSU Matt!

  • http://bothsidesofthetable.com msuster

    Thanks, Spencer. Yes, “lean startup” people are now religious. And like religion when you question a particular tenet you're likely to be attacked personally. It's OK, I have thick skin. I'm not always right but I'm willing to debate in the spirit of moving the discussion along. I appreciate your words of support and wisdom at the ripe age of 18!

    Also, I love your bio! http://futurephilanthropreneur.wordpress.com/ab

  • http://bothsidesofthetable.com msuster

    Agree entirely. And I've lived in places that don't tolerate failure and I think tolerance of failure is what makes Silicon Valley a unique place. That's different from encouraging fast failure or cavalier failure. And, yes, like you I believe in failing in the research (homework) phase

  • http://twitter.com/SThomps Spencer Thompson

    Hi Mark,

    Thanks for taking a look at the blog. Thanks for liking the bio, I know it's a little short on content and I was thinking about changing it. But seeing as you like it, it will stay :D.

    You are completely correct, “lean startup” people are now a bit of a cult. I always read what Steve Blank, Eric Ries, Sean Ellis, Dave McClure and Brant Cooper have to say, but I still form my own opinions. There is no guidebook to success and unfortunately people are looking to LS as that easy path. They have gone iteration/fail fast crazy. Nothing wrong with learning and pivoting, but there has to be a product need there in the first place.

    I am currently writing a post on something equally as “religious”, the case for a non-technical founder running a startup. Like you, I'm not always right, but it provokes good discussion.

    Keep up the good work!

  • http://www.scrollinondubs.com Sean Tierney

    Mark, spot on. I nominate “accelerate discovery” as the replacement mantra. The essence of “fail fast” may have had good intentions but I agree that it will be misinterpreted by people who weren't in the room when it was coined.

    I read a great book recently called “Getting to Plan B” and I'm 3 chapters into another one, “4 steps to the Epiphany” – both are recommending the same advice only with different vocabulary: prove/refute hypotheses as early as possible so you can uncover the truth about your assumptions and react accordingly. Customer development, Plan B, pivoting – whatever you want to call it, it's about chipping away all the uncertainty that obfuscates the optimal model.

    sean

  • http://www.elieseidman.com Elie Seidman

    great stuff. A startup is not – as they say on Wall Street – a “trade”; something to be gotten into quickly and out of just as quickly if there is a whiff that the theory is not working. For every YouTube that takes off quickly it would seem that there are 100x as many that tried and learned and pivoted and learned and eventually succeeded after staring into the abyss of failure a few too many times for the sake of sanity. The YouTube's of the world are the ones that are heralded and lauded by the media but its the other stories are the real guts and glory stuff if you ask me

  • jimmurphy

    Honestly, people. I thought everyone knew that “Fail Fast” is jargon for learn and don't keep full power on the reality distortion field for too long. “Fail” is language used to motivate a pivot not fold the company. Sheesh.

  • http://twitter.com/pauldyson Paul Dyson

    Great to see this article. As a technology entrepreneur I have two problems with fail fast in addition to the excellent points you make.

    Philosophically the problem with fail fast is the focus on failure. Where's the “play to win”? Where's the grit, determination and balls to make things work? In short, where's the entrepreneurship? In my previous business our mantra was “don't minimise the risks of failure, maximise the chances of success”. The great thing about MVP, rapid iteration, pivot and learn is that this is not a 'death or glory' approach but rather a series of small, positive, informed steps.

    Practically the problem with fail fast is its just so easy to fail in a start-up business. You get your first release ready but you need to sign a customer. You get your first customer but that's not enough to support your business. You grow your customer base but you're struggling to balance company growth with sales growth. And so on … its often hard to see what 'success' actually looks like. If at each of these points you're actively look to call “failure” because that means you have succeed in failing fast, you might as well not bother. Save your money, your time, and that of your partners and customers and go and get a job for a management consultancy where you will get paid to spout crap like “fail fast”.

  • http://twitter.com/williampietri William Pietri

    Well, that may be what some people infer from the phrase, but that's definitely not what I imply when I say it, or what a lot of other people mean. It sounds like lazy, irresponsible people are using a perfectly good phrase as a fig leaf.

    To my mind, failing fast is part of trying to make things work. “If at first you don't succeed, try, try again” is the saying. But to try again, you have to fail first. And given the frequency with which bold new ideas are somehow wrong, it's best to fail fast, no? This is important to me, because I've seen a lot of needless slow and expensive failures.

    I think by going after the phrase, which is meant to sum up a useful and important idea, you are riling up the people who support that idea, while not doing much to reign in the irresponsible jerks that you have a problem with. Rather than negating and opposing, have you considered an embrace-and-extend approach?

    (P.S. Disqus's Twitter login is now broken for me. Don't know if that's related to the other Disqus problems you mention.)

  • jadebourelle

    You are right on track.

    I have seen much more success from adjusting what is not working and driving to success by sticking with it.

    I have seen much more failure from “re-inventing” new strategies every 6 months because the last one was “failing fast” versus understanding why and adjusting. Chasing shiny objects because the current idea is getting to the hard part …. this flipping around is the largest destroyer of investor capital that there is….

  • http://www.elieseidman.com Elie Seidman

    great stuff. A startup is not – as they say on Wall Street – a “trade”; something to be gotten into quickly and out of just as quickly if there is a whiff that the theory is not working. For every YouTube that takes off quickly it would seem that there are 100x as many that tried and learned and pivoted and learned and eventually succeeded after staring into the abyss of failure a few too many times for the sake of sanity. The YouTube's of the world are the ones that are heralded and lauded by the media but its the other stories are the real guts and glory stuff if you ask me

  • jimmurphy

    Honestly, people. I thought everyone knew that “Fail Fast” is jargon for learn and don't keep full power on the reality distortion field for too long. “Fail” is language used to motivate a pivot not fold the company. Sheesh.

  • http://twitter.com/williampietri William Pietri

    Well, that may be what some people infer from the phrase, but that's definitely not what I imply when I say it, or what a lot of other people mean. It sounds like lazy, irresponsible people are using a perfectly good phrase as a fig leaf.

    To my mind, failing fast is part of trying to make things work. “If at first you don't succeed, try, try again” is the saying. But to try again, you have to fail first. And given the frequency with which bold new ideas are somehow wrong, it's best to fail fast, no? This is important to me, because I've seen a lot of needless slow and expensive failures.

    I think by going after the phrase, which is meant to sum up a useful and important idea, you are riling up the people who support that idea, while not doing much to reign in the irresponsible jerks that you have a problem with. Rather than negating and opposing, have you considered an embrace-and-extend approach?

    (P.S. Disqus's Twitter login is now broken for me. Don't know if that's related to the other Disqus problems you mention.)

  • jadebourelle

    You are right on track.

    I have seen much more success from adjusting what is not working and driving to success by sticking with it.

    I have seen much more failure from “re-inventing” new strategies every 6 months because the last one was “failing fast” versus understanding why and adjusting. Chasing shiny objects because the current idea is getting to the hard part …. this flipping around is the largest destroyer of investor capital that there is….

  • thereviewguy

    hmm, can't find the previous comment and your reply…anyhow, Paul graham's comment about starting up a project without first thinking about “business model” can be seen in his article “be good” http://paulgraham.com/good.html

  • thereviewguy

    hmm, can't find the previous comment and your reply…anyhow, Paul graham's comment about starting up a project without first thinking about “business model” can be seen in his article “be good” http://paulgraham.com/good.html

  • thereviewguy

    Paul graham's comment about starting up a project without first thinking about “business model” can be seen in his article “be good” http://paulgraham.com/good.html

  • http://www.doneordoneright.com/ David Calabrese

    I couldn't agree more Mark. In my mind the “Fail Fast” theory should be applied within a business regarding certain strategies such as which sectors are most profitable and which marketing tactics are most effective.

    These types of milestone and metric driven pass or fail tactics can help a business right their path fast and get to profitability. The idea that a business can be tested and proven quickly is wrong… mostly wrong because most successful businesses had to adjust several times before they found the path that took them from interesting to highly profitable.

    Too many times terms get thrown around that have negative impact in the investment and entrepreneurial community.

  • thereviewguy

    Paul graham's comment about starting up a project without first thinking about “business model” can be seen in his article “be good” http://paulgraham.com/good.html

  • http://www.doneordoneright.com/ David Calabrese

    I couldn't agree more Mark. In my mind the “Fail Fast” theory should be applied within a business regarding certain strategies such as which sectors are most profitable and which marketing tactics are most effective.

    These types of milestone and metric driven pass or fail tactics can help a business right their path fast and get to profitability. The idea that a business can be tested and proven quickly is wrong… mostly wrong because most successful businesses had to adjust several times before they found the path that took them from interesting to highly profitable.

    Too many times terms get thrown around that have negative impact in the investment and entrepreneurial community.

  • Paul Dyson

    Unfortunately I've met at least two people who don't understand this.

  • Gerald

    Just found your blog and thoroughly enjoy it, thank you. I am a co-founder in a startup with little financial modeling experience. Where would you recommend someone with a startup go to get practical financial knowledge for a non-financial manager? Thanks,
    @gesco

  • Paul Dyson

    Unfortunately I've met at least two people who don't understand this.

  • Gerald

    Just found your blog and thoroughly enjoy it, thank you. I am a co-founder in a startup with little financial modeling experience. Where would you recommend someone with a startup go to get practical financial knowledge for a non-financial manager? Thanks,
    @gesco

  • skillguru

    Which entrepreneur thinks that his or her idea is going to fail ? Will anyone fund an entrepreneur who does not believe in himself or his idea ? So where did this mantra came from .
    I think it came from VC's and angels and it is under their guidance when the team starts to build focus and vision on what could be reality and a business which makes sense.
    If a team is not open to suggestions and be ready to change , it is definitely not a good sign.

    What Mark says holds true for those individuals who think that they will create something viral , will have lots of traffic and think of business plan. If this works well , if not then something else.

    It is always good to approach a VC once an entrepreneur has validated his idea. The business plan may change depending on market conditions , competition and users response but not with mindset of failing fast.

  • joeyflores

    This has poker analogy written all over it to me.

    Sometimes you hear tournament players say that they play aggressive and loose at the beginning of a tournament because they'd rather bust out early and not waste hours playing than go into the later rounds with a smaller stack. This is a great strategy for conserving time, but a terrible one for conserving money.

    Good players play tight, wait for good hands, and then shove when they've got the best of it. That's how businesses should be run – conserve money and spend when you've got the nuts.

    Failing Fast might be a good way to describe one hand, meaning fold quickly when you know you're beat and move onto the next hand, but not your whole strategy. I would agree with Mark that, without the proper disclaimers, Failing Fast sounds like a bust-out quick tournament strategy – not a sane way to run a business. It might be easy to say, but what good is a two-word descriptor of a business strategy that sends half of the crowd in the wrong direction?

  • skillguru

    Which entrepreneur thinks that his or her idea is going to fail ? Will anyone fund an entrepreneur who does not believe in himself or his idea ? So where did this mantra came from .
    I think it came from VC's and angels and it is under their guidance when the team starts to build focus and vision on what could be reality and a business which makes sense.
    If a team is not open to suggestions and be ready to change , it is definitely not a good sign.

    What Mark says holds true for those individuals who think that they will create something viral , will have lots of traffic and think of business plan. If this works well , if not then something else.

    It is always good to approach a VC once an entrepreneur has validated his idea. The business plan may change depending on market conditions , competition and users response but not with mindset of failing fast.

  • joeyflores

    This has poker analogy written all over it to me.

    Sometimes you hear tournament players say that they play aggressive and loose at the beginning of a tournament because they'd rather bust out early and not waste hours playing than go into the later rounds with a smaller stack. This is a great strategy for conserving time, but a terrible one for conserving money.

    Good players play tight, wait for good hands, and then shove when they've got the best of it. That's how businesses should be run – conserve money and spend when you've got the nuts.

    Failing Fast might be a good way to describe one hand, meaning fold quickly when you know you're beat and move onto the next hand, but not your whole strategy. I would agree with Mark that, without the proper disclaimers, Failing Fast sounds like a bust-out quick tournament strategy – not a sane way to run a business. It might be easy to say, but what good is a two-word descriptor of a business strategy that sends half of the crowd in the wrong direction?

  • the_real_fujun

    Completely agree fail fast doesn't equal to no thoughtfulness, no tenacity, etc. However, I do think there is a time element here beyond launch and learn, especially for consumer internet companies. I look at the big success in consumer internet: Facebook, Zynga, Twitter, etc. They all got traction fairly fast (Twitter after completely changing their business). If I were an entrepreneur, I would launch and learn and iterate as much as possible, but I would also go for a different idea if the metrics aren't there after a few years. Caveat: I am sure there are many startups that succeed even if they didn't take off within the first couple of years, but the large success stories seem to have break out fairly fast. Any counter examples?

  • the_real_fujun

    Completely agree fail fast doesn't equal to no thoughtfulness, no tenacity, etc. However, I do think there is a time element here beyond launch and learn, especially for consumer internet companies. I look at the big success in consumer internet: Facebook, Zynga, Twitter, etc. They all got traction fairly fast (Twitter after completely changing their business). If I were an entrepreneur, I would launch and learn and iterate as much as possible, but I would also go for a different idea if the metrics aren't there after a few years. Caveat: I am sure there are many startups that succeed even if they didn't take off within the first couple of years, but the large success stories seem to have break out fairly fast. Any counter examples?

  • honam

    Mark, for some reason my original comment to your post seems to have disappeared. As promised I wrote a post with more thoughts on this topic. Also, wrote about the great “fail fast” story I mentioned earlier.

    http://www.blog.altosventures.com/vc/2010/03/fa

  • honam

    Mark, for some reason my original comment to your post seems to have disappeared. As promised I wrote a post with more thoughts on this topic. Also, wrote about the great “fail fast” story I mentioned earlier.

    http://www.blog.altosventures.com/vc/2010/03/fa

  • http://www.whatihearyousayingis.com/ Blake

    Hey, how about “Fail fastest?” No? “Fail fasterer?”

  • http://www.whatihearyousayingis.com/ Blake

    Hey, how about “Fail fastest?” No? “Fail fasterer?”

  • http://www.whatihearyousayingis.com/ Blake

    Hey, how about “Fail fastest?” No? “Fail fasterer?”

  • http://sebastianconcept.com sebastian concept >>>

    yes… yes… (eyes rolling) the literal interpretation of “celebrating failure” issue.

    Of course you don't have to fail. Of course you have to succeed (who needs more pressure on that?).

    The whole point of “celebrating failure” is for de-dramatizing and removing panic to make mistakes that most people, or wannabe entrepreneurs, have.

    If you are going to think of fail as mantra, then I agree you better don't do that (otherwise you might be a successful fail achiever).

  • http://www.hotelcomentarios.com Hoteles

    Yes, agreed that market research can be expensive in fragmented markets. I like the “launch and learn” approach with a minimum viable product (MVP) because it's easier for people to give you real feedback when they experiment with your product rather than answer questionnaires.