I recently had the opportunity to interact with a startup founder who is contemplating taking on a huge new client. I (unsurprisingly) offered my unsolicited advice that they think long and hard about taking a giant leap. My contention was that the tech space boneyard is littered with companies that have bitten off more than they could chew. Taking on a client that big will give the client an outsized influence on the company. The stress on the operations may lead to poor service quality and effect referrals. It is moving outside of their niche and may do irreparable harm to the culture even if it does work from a profitability standpoint etc. She responded that the growth opportunity was too good to pass up and that taking risks is what being an entrepreneur is all about. “So, what if we fail? We learned something, and we’ll move on.”
There are many things in her response that I will tackle in upcoming articles but, for this one, I’m going to focus on “fail fast.”
I am a HUGE proponent of the fail fast mentality. Try something new. If it doesn’t work, cut your losses and move on. “Fail fast," however, it is not an excuse to just try anything. If I said, I’m going to try to jump off the Sears Tower and walk away, everyone would say I was crazy. Common sense, the number of people who have died falling from lower heights, and the laws of physics all say that is not a good idea. The same goes for business. If a business is going to try something that has been attempted unsuccessfully many times before, there better be a GOOD, well researched, strategy in place to show why they think this will be different. Taking a parachute to the Sears Tower is a good, well researched, strategy. Hoping that holding an NPR tote bag over my head will produce enough drag to stop me from breaking every bone in my body is a pipe dream.
A leader has an obligation to their team to do the homework first. My Sears Tower example may seem a bit overboard but you have to remember you have the livelihood of your team in your hands. You owe it to them to perform your due diligence. Due diligence is what I mean by you don’t have to actually fail to “fail fast.” Doing the research on what other companies have done, taking an inventory of your capabilities, or running a simulation of the change are just a few ways of “failing fast” without failing. According to this Inc. Magazine article, most CEOs read a book a week! Even if that number is inflated, the most successful are voracious readers based on the number of books they recommend. Why do they read so much? To learn lessons from others so they don't have to try it themselves. You don't need to risk of jumping off the Sears Tower. Read Newton's Principia Mathematica to determine it won't work instead.
Thinking that a company will succeed where every other company has failed based solely on the rationale that "I’m better/smarter/different" isn’t daring, entrepreneurial, or inventive. It is stupid, shortsighted, and arrogant. Fail fast when introducing a new product into the market (after completing the market analysis of course). Fail fast when the frontier is new, there are no comparable experiences, and evidence exists that makes the idea seem feasible. Fail fast after doing the research and it looks like a good idea. Don’t fail fast on things others have already tried. Don’t learn lessons that others have already learned. You can “fail fast” without failing.
My next article will be on the topic of growth and if it is a goal in and of itself. Stay tuned…