Most startups will fail. Everyone in the startup community knows that failure is a more common occurrence than success. Silicon Valley has become so enamored by the “value of failure” that rumors suggest they are considering handing out merit badges for failed entrepreneurs. Just how common is startup failure? Harvard researcher Shikhar Ghosh cites that 75% of VC funded startups fail to return a single dime to their investors. So why do we hear so little about failed startups in Minnesota? Are we too “Minnesota nice” to brag about our failures?
I work with companies large and small who are trying to develop a sustainable innovation practice. They don’t just want to launch an idea on a wing and a prayer. They want to find a repeatable process that can improve their chances of success. Admittedly they have tried the wing and prayer route before and they know it doesn’t work. The truth is that most of these disruptive or exponential innovation initiatives don’t succeed. They fail. The challenge that these companies face is that they are trying to build the tools and processes but they struggle to address the culture. They never address the necessity of failure.
Are we ready for a new twist on reality TV? What if we moved benign academic tussles to a new full-contact arena? We could call it the “Ph.D. Cage Match.” Not likely but I have to admit truthfully that it has been a little exciting watching this battle of words brewing between two Harvard academics. Jill Lepore (a staff writer for The New Yorker magazine and Harvard Professor of American History) and Clay Christensen (a Harvard Professor of Business Administration and the reigning godfather of the modern innovation movement) have been publicly duking it out over their disagreement on Christensen’s theory of “disruptive innovation.”
I have been following the story of Elon Musk for several years now. His attitude toward innovation, risk taking and the possibility of failure is what I consider to be an “example of good.” This attitude has earned him a handsome fortune (worth $12b as of 2014) and a top spot in my “must interview” list for my book. In my previous world of new business development, my team and I had followed Musk’s company Tesla Motors closely as we were working on opportunities in the electric vehicle industry. At the time Musk had just begun general production of the Tesla Roadster and while it had won an award from Time Magazine as one of the best inventions of 2006 it was far from certain that the company could survive.
I am excited to be a panelist at the University of Minnesota’s “Finding Success through Failure” event on March 27th. The event is hosted by the University of Minnesota Office for Technology Commercialization and is always a great networking event for entrepreneurs or those looking to become an entrepreneur.
The truth is that nonprofits experience failure just like every for-profit business: new initiatives fall short of expectations, the synergy of partnerships fails to materialize, or expansion plans overburden an organization’s cash flow. But because nonprofits are so reliant on donations and grants to fund their operations even mentioning the word failure can be lethal. The perception, and perhaps reality, is that no donor wants to think that their contribution is being wasted and no foundation wants to report back to their board on “failed” investments. The result is that “safer is better” and failures are frequently covered up.
Seven years ago my team had just shut down the first of our two concept stores that we were running for consumer electronics retailer Best Buy. My team had spent the last two years operating these concept stores in an attempt to understand more about the opportunities in “small box” retail. During that time we had learned a ton and as a leadership team we were adamant that we needed to share what we had learned with the rest of the company.
Receive periodic email updates from Matt Hunt including his published pieces, updates on his progress, and more!