Fail fast because successful companies failed before they succeeded

There are several versions of this statement, one way or another they glorify failures and in the name of exhorting startup founders these inspirational statements lead one to believe

  1. After a few failures success is inevitable
  2. You must fail first to succeed
  3. Fail fast so you can succeed
  4. Failures signal impending success
  5. “Failure can be a true blessing in that it educates you and prepares you for success” (from here)
  6. “Remember that most successful entrepreneurs fail good and hard before they finally make it” (same source)

All these assertions are happy to point out popular examples. The problem is the assertions are derived from the very examples they are using as evidence.

First let us make something very clear. Success and Failure are the only two possible outcomes for any venture you undertake. But the fact that there are just two outcomes does not mean they are equally probable. It is not the case of tossing a fair coin and calculating the odds of heads or tails.The chances of success and failure can be and are very different. If you take the base rate (looking at the success rate of thousands of ventures and small businesses) the success rate is 3 to 5%.

Second  even if we assume that Success and Failure are equally likely, a series of failures does not mean inevitable success. Take the coin example. The probability of getting 10 Tails in a row is same as the probability of getting 9 Tails in a row followed by a Head.

Lastly the fact that those who succeeded had failed in the past is irrelevant. Those who make such an argument pick only the success stories that are popular, recent and available to them. When you only look at those who succeeded and are still in business you are leaving all those who did finally succeed and gave up or still trying without success. Even in these cited success stories success is mostly random rather than a result of their failures. The fact that those who succeeded had “failed hard” does not mean when you fail you will succeed.

Granted they learned from their mistakes but you do not have to learn from your own mistakes.  You do not have to fail to learn. Failure is not the true blessing. Insane success with hundreds of billions of valuation even when your venture has no real product or clear value add is true blessing.

Those who advise you to fail are not being intellectually honest. Their advices are no different from those advising a gambler to bet on a slot machine that had been coming up empty for the past few hours.


6 thoughts on “Fail fast because successful companies failed before they succeeded

  1. Anthony
    Starting a venture when you are unencumbered by other obligations, when you still have time to recover and knowing that it is likely to fail given the base rate is a good idea.



  2. Another element in such a quote is the idea that it is better to have failed then never tried at all.

    Advice I have heard to many young business leaders interested in entrepreneurship is to “go for it” because the worse case scenario is that one has a good lesson/experience for the next job/b-school.


  3. Ariel
    I am all for learning and applying lessons from the past failures.
    There is however, “no education in the second kick of a mule” (don’t know who said it, I heard this on radio).
    I argue
    – don’t think failure is a “true blessing”
    – don’t make failure as the goal in the belief that enough failures point to next success
    – don’t think successes are purely under one’s control, there is too much due t pure chance



  4. Rags, my 5 cents: Its’ true that several failures don’t make a success, and you can learn even if you don’t fail. Agree on that.
    But I do believe that if you failed, (and you at least try to understand why), in your next venture you will take better decisions.
    So if you do better in the next venture because of what you’ve learned, then each venture that you start is not independent from the result of the previous one.


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