Is failure overrated?

2 04 2009

Web 2.0 Expo San Francisco 2008

As seen in Biznology (slightly modified to avoid overlapping with previous posts in this blog):

Is learning from failures overrated? When emphasizing the importance of learning from errors, are we actually creating a culture of losers? Read on to hear arguments on both sides of this discussion and make up your mind. Your company’s survival in the long term may depend on it.

I’m in San Francisco this week, speaking at and attending the Web 2.0 Expo at the Moscone West. In a number of sessions, the speakers emphasized that failure is an important part of the innovation game. Knowing that I also tend to subscribe to that theory, and commenting on the Charlie Brown comic strip I embedded in my previous blog entry, a colleague at IBM pointed me to an interesting piece written by Jason Fried, from 37signals, who challenges that whole concept: “Failure is overrated, a redux”. It’s a good post, and the comments are also worth reading. To have a complete picture of the discussion, I suggest you to also read the New York Times article Jason refers to, “Try, Try Again, or Maybe Not”.

As it’s often the case in heated discussions, I initially found that Jason was defending a completely different perspective toward failure and learning, but this comment of his on another related post made me think that the difference is mostly one of weight.

“Everything is a learning experience. It’s just that I’ve found learning from your successes to be more advantageous. (…) I’ve always found more value in learning from the things that work than the things that don’t.”

I definitely can live with that position. What I have more trouble with is the cited Harvard Business School working paper. Here are some excerpts from the NYT article:

“The data are absolutely clear,” says Paul A. Gompers, a professor of business administration at the school and one of the study’s authors. “Does failure breed new knowledge or experience that can be leveraged into performance the second time around?” he asks. In some cases, yes, but over all, he says, “We found there is no benefit in terms of performance.”

(…) first-time entrepreneurs who received venture capital funding had a 22 percent chance of success. Success was defined as going public or filing to go public; Professor Gompers says the results were similar when using other measures, like acquisition or merger.

Already-successful entrepreneurs were far more likely to succeed again: their success rate for later venture-backed companies was 34 percent. But entrepreneurs whose companies had been liquidated or gone bankrupt had almost the same follow-on success rate as the first-timers: 23 percent.

If the article is accurate – and that’s a big if, considering that this is still a working paper – it seems that the HBS research is not actually proving that “when it comes to venture-backed entrepreneurship, the only experience that counts is success”, as stated in the opening paragraph. It basically demonstrates that enterpreneurs who managed to go public or filed to go public are slightly more likely (going from 22% to 34%) to have a repeat, but isn’t that expected?

There are several factors that come into play when filing a venture to go public, and having done it once gives an entrepreneur some knowledge of what it takes to get there again. I actually find surprising that, even with that edge, the rate of failure is still very high. Another way to interpret the same data is: roughly two thirds of entrepreneurs who were successful the first time (and I’m using the same loose definition of success here) fail the second time. If anything, the data tells me that success is also overrated.

The “learning from failures” approach makes more sense when you take a granular approach to it. Every single initiative you undertake is composed of a vast number of small wins and losses. You definitely can learn from both outcomes, so regardless of which one will teach you the most, embrace successes AND failures. The fundamental message when advocating a culture that allows failure to occur from time to time is to avoid analysis paralysis, or even worse, denial by hiding what went wrong and exaggerating what went right.

The bottom line is that innovation entails good risk management and shares many features with the financial world. Low risk initiatives are likely to generate low returns, and don’t give you much of a competitive edge. Being bold may lead you to collect wins and losses along the way, but also can reward you more handsomely overall. Knowing that, it’s important that you balance your innovation initiatives the same way you handle a portfolio: diversify them and adjust the mix to your comfort level. During economic downturns like the one we are going through now, it’s easy to panic and stop innovating. Keep in mind that a solid and consistent long term approach to innovation may determine your ability to survive in good and bad times.

Tony Scott, Fernando Pessoa, Michael Jordan, Innovation and Failure: Am I the only vile and errant one on Earth?

10 03 2009

This is an updated version of a post I originally wrote for my internal IBM blog back in 2006. Some of the points there are still relevant today.

As the downturn in the global economy continues, many companies adopt a cautious approach towards innovation. In some ways, tough economic times may actually be a good opportunity for companies to innovate and differentiate themselves from the competition. Borrowing from the punctuated equilibrium theory, innovation may occur in bursts when facing major shifts in the ecosystem. Also, as Google likes to claim, creativity loves constraint.

A few years ago, I was fortunate to listen to a talk about innovation by Tony Scott, who carries the impressive track of being a CTO at GM, and a CIO with Disney and Microsoft. In my poorly written notes, here’s what he said, or more precisely, my recollection of what he said back then:

  • Innovation is a combination of inspiration, perspiration, persistence and really good marketing.
  • Good architecture principles, according to Vitruvius Pollio (referred by some as the first architect) are order, eurhythmy, symmetry, propriety, economy, commodity, firmness and delight. We tend to focus the least in the last one.
  • Competition and cooperation can co-exist.
  • Create a culture where you’re allowed to fail from time to time.

Innovation implies exploring new possibilities, and learning from mistakes. An error-adverse culture cannot expect much innovation to occur.

In our continuous pursuit for innovation in the enterprise, we need to have a frame of mind where we take some risks and we accept failures, admit them, and learn from them. If you don’t tolerate errors, or deny them, you are just freezing yourself in your current position. In a world changing at a very fast pace, the status quo means staying behind and it just creates an environment where nobody dares to innovate. Enterprises could learn a lot from:

  • All projects that went over budget
  • All innovative ideas that failed to realize potential gains
  • All bids and proposals lost
  • All products and services exhibiting a shrinking market share

I also like this Michael Jordan quote:“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.” As basketball wisdom goes, you miss 100% of the shots you don’t take.

Note that I’m not proposing that we should create a culture of losers. The idea I’m trying to convey can be summarized by “His Airness” again: “I can accept failure, but I can’t accept not trying.”

One of my favourite writers/poets of all time was the Portuguese author Fernando Pessoa, who wrote, as his heteronym Álvaro de Campos, the gem below about the denial with which we tend to approach failure.

For the Portuguese and Spanish speakers out there, try the original version, “Poema em linha reta.

Foursquare Poem

I’ve never known anybody who’s had the crap beaten out of them.
All my aquaintances have been champions in everything.

I, so often shabby, so often swinish, so often vile,
I, so often, unforgivably, a parasite.
Inexcusably filthy I,
Who so often haven’t had the patience to shower,
I, who so often have been ridiculous, absurd,
Who have publicly wiped my feet on etiquette’s tapestry,
Who have been grotesque, paltry, servile, and arrogant,
Who have silently suffered besmirching
And when I haven’t been silent, have been even more ridiculous;
I, who have been a clown for chambermaids,
I, who have felt the winks of stevedores,
I, who have been fiscally embarassed, who have borrowed and forfeited,
I, who when the time for blows arises,
Have recoiled in advance of the possibility of blows;
I who have suffered the anguish of ridiculous little things,
I declare that in all the world I am without par.

Every one I know who speaks to me
Never did a ridiculous thing, never suffered besmirching,
Was never anything but a prince – all of them princes – in life…

If only I could hear another human voice
Confess not sin, but disgrace;
Confess not violence, but cowardice!
No, they’re all The Ideal, to hear them tell it.
Who in this great world will confess to me that even once they were vile?
O princes, my brothers,

God damn it, I’m fed up with semi-gods!
Where are there people in the world?

Am I the only vile and errant one on earth?

Women may not have loved them,
They may have been betrayed – but ridiculous, never!
And I, who have been ridiculous without being betrayed,
How can I speak to my superiors without reeling?
I who have been vile, literally vile,
Vile in the most paltry and infamous meaning of the word.

(I couldn’t find the source for the translation above, so if anybody knows it, please drop me a note so that I can properly credit it and ask for permission to have it here.)

Santos-Dumont, The Wright Brothers and Innovation

17 07 2008

This is a post I wrote long time ago in my internal blog at work and decided to publish here too, as it seems to still be current

Unless you’re Brazilian or an aviation enthusiast, chances are that you have never heard about Alberto Santos-Dumont. Most people in the world would not hesitate in saying that the Wright brothers invented the airplane. However, some claim that “the only witnesses to the Wright brothers flights (…) were typically close friends and family”, while “Santos-Dumont made his flights in public, often accompanied by the scientific elite of the time, then gathered in Paris” (read more about it here and here). The picture above (from Wikimedia Commons) shows one of his flights in the Bagatelle field (close to the Eiffel Tower). PBS aired “Wings of Madness”, a good documentary about Santos-Dumont, last year. Here are some excerpts from the program description:

In the early 1900s, the most acclaimed celebrity in Europe, and arguably the world, was a fashionable, frail, Brazilian-born aviator named Alberto Santos-Dumont. (…)Tiring of balloons, Santos built the 14bis, an ungainly tail-first flying machine that nevertheless made the first powered airplane flight in Europe in 1906. At that time, the Wright brothers’s secret early flights were widely disbelieved, so Santos and his adoring public were convinced he was the first to fly. When Wilbur made his triumphant European tour in 1908, Santos had to face the terrible realization that the Wrights were the true pioneers after all. But just before his long slide into illness began, he designed an exquisite new airplane out of bamboo: the Demoiselle, or Damselfly. One of the classic aircraft of the pioneering era, it was the true forerunner of today’s ultralight planes.

An interesting aside from this discussion is that the Gartner’s hype cycle around emerging technologies was already in full display mode 100 years ago: Dumont went from the technology trigger all the way to the plateau of productivity in a decade and was very hyped for a while to the point that the local Dayton Daily News in 1903 stated that the Wright brothers were emulating Dumont (Orville and Wilbur lived in Dayton):

In any case, the true answer for the question “Who invented the airplane” is: none of them. Or better yet, all of them: Orville, Wilbur, Alberto and several others pioneers, all should be credited with the invention of the airplane. We tend to like simple answers, and so we just accept that Gutenberg invented printing, Thomas Edison the light bulb and Christopher Columbus discovered the Americas. In reality, all inventions and findings in the world are composites of ideas and experiments run by several people. That’s why I strongly believe that our current models governing intellectual property are outdated and preventing us from unleashing the true power of innovation. Our copyright laws are way too strict, and patents many times are inhibitors, not drivers, for new inventions.

Note that I’m not advocating that all IP protection should be dropped. However, the big accomplishment that should be awarded is not the idea, but the execution. Ideas are cheap, good implementation is the real challenge. This concept applies even in the case of artistic works like music, movies or books. Just imagine what would happen if everything was governed by a Creative Commons-like license, where anybody, everybody could share, remix and reuse whatever they want. Often times we see songs that were very flat in their original recording to become masterpieces with some novel interpretation. If we lower the barriers, even disasters could be rescued. Can you improve on “The Godfather” I and II? Unlikely. “The Godfather
III”, on the other side, had some good ideas ruined by a few really lame ones. The potential for a great movie was there, but it was never realized. You’re just left wondering “what if”. Of course, movies are not that easy to tweak, but scripts are. I bet that the last three Star Wars movies could benefit from better writing.

It would be interesting as a social experiment to establish a 5-year moratorium on all IP-related claims and see what would happen: chaos and the-end-of-the-world-as-we-know-it or an explosion in innovation. At a minimum, this approach would help us to find out how much control is actually needed to foster innovation.

On innovation, barnacles and Darwin

29 01 2008

Two weeks ago, while visiting the St Joseph Market in Barcelona, I found this thing that promptly caught my attention:

I thought: live “percebes”? WTH is a percebe? And why is this thing so expensive? Then I took a closer look:

Naturally, I googled it some time later, and found the following:

The percebe is a delicious, edible gooseneck barnacle. Seafood lovers proclaim the succulent lusciousness of its slippery, slurpable innards make percebes earth’s best-tasting seafood.

It didn’t sound very appealing to me, and I did not know what a barnacle was anyway. You know, when English is not your first language, barnacle is not a word that’s likely to show up in a casual conversation or in your ESL classes. Of course, I then googled barnacle and found that it was simply what in Brazilian Portuguese is known as craca. My immediate reaction was: What???!!! Some people eat cracas and say that’s the best-tasting seafood on the planet? It’s like my mother saying the best part of the chicken is the neck. (I never actually tried it, but I still don’t believe her).

All this googleness finally paid off, as it led me to find by accident that barnacles played a pivotal role in Darwin’s breakthrough evolutionary theory, as described in the book Darwin and the Barnacle (by the way, Google Book Search rocks!). According to Wikipedia, Darwin was the first to fully study and classify barnacles. No surprise there. I used to tease a friend of mine for studying the behaviour of sea urchins (well, they basically don’t do much of what regular folks call behaviour), but barnacles are even worse, as most of them spend their lives cemented to a rock and barely move. If I were to choose a species to describe, barnacles would probably be very low in my list.

What is really interesting in this story was that it took Darwin more than 20 years between formulating his theory and publishing it. He was a 50-year-old man when he finally published The Origin of Species. Contrary to Thomas Edison, who seemed to come up with new things every 5 minutes (come on, 1,093 patents in his name?), Darwin had one major innovative idea, and it took him almost a lifetime to develop it. But when he finally published it, it changed the whole history of life sciences.

Innovation comes in different sizes, packages and frequencies. I can only imagine a guy like Darwin working for a big corporation today and writing in his annual performance review: I’m almost there; I just need 12 more years to finalize this idea of mine. The other thing that caught my attention is Darwin’s independent thinking, and his openness to change his mind when faced with facts invalidating his beliefs:

I am not apt to follow blindly the lead of other men. I have steadily endeavoured to keep my mind free, so as to give up any hypothesis, however much beloved (and I cannot resist forming one on every subject) as soon as facts are shown to be opposed to it.

He wrote that late in his life, and it’s refreshing to see that even after all his accomplishments, he was still keeping an open stance and an inquiring mind. How’s that for a role model?


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