In Defense of Failure
There’s a popular thesis that some cities function like dementors for startups, sucking the soul out of people’s entrepreneurial dreams. But, as Paul Graham observes, the default setting for startups is failure-- it’s not that these cities are bathed in startupicide, some just have the antidote.
I think there’s a valuable lesson here about the perception of failure. There are few places in the world as tolerant and even encouraging of failure as Silicon Valley. This remarkable breeding ground for all kinds of startups is the reason why people shoulder the high cost of trying to build the next Facebook there, rather than in their parents’ garage in Tennessee. SV nurtures the entrepreneurial spirit, which is crucial to the inception of innovative ventures. In most other places, founding a startup is often euphemistically likened to unemployment. Yes, most startups fail, but when they don’t, the benefits are massive. SV recognizes this.
Rohit Krishnan touches on this global tendency to scorn failure in an episode of the Infinite Loops podcast. As he puts it, “When every time somebody tries something different and fails, they get bashed twice, once for failing and once for attempting, which is the norm almost everywhere.” This pervasive attitude discourages all but deviants from trying new things, leaving many with a low immunity to failure.
Such intolerance towards failure doesn’t only hamper individuals but also affects organizations. Rohit Krishnan's experience at McKinsey provides a prime illustration of this. McKinsey, a magnet for top talent, isn’t in the business of making bets; they help reduce complexity within companies. While this approach is beneficial for their clients, it neglects to tap into the innovative potential of their vast talent pool. You might join companies like Google or McKinsey, anticipating front-line action and extensive use of your problem-solving prowess, but the reality often diverges.
Rohit articulates this discrepancy in the podcast. He recounts, “If I was on a team giving that recommendation, my team would've had to produce multiple slides, each backed by data and case studies, to justify our proposition.” Jim responds, “Evidence. As you pointed out, evidence. But if you're talking about future innovations, there is no evidence.” Rohit replies, pinpointing the paradox at the heart of the matter: “Precisely. How are you going to prove that mobile phones are going to be a thing? You can't. You can bet that it's going to be a thing, but a bet is almost exactly what these companies don't want to do.” This critique isn’t confined to McKinsey-- it applies to many places that prioritize caution over creativity.
It’s a reinforcing loop: companies that discourage failure breed employees who fear it, and in turn, these fearful employees contribute to a risk-averse corporate culture. This inhibits innovation, as there's no incentive structure in place to encourage risk-taking. And so we end up with a company that is a bastion of cautious conservatism, further discouraging any form of experimentation.
In this current environment, the world seems more concerned with ‘hit rates’--immediate successes-- rather than expected value (EV)--long-term potential. Venture capitalists recognize the power of EV, understanding that one major success can offset many failures. But to stimulate innovation, we need this philosophy adopted more broadly. Without this, as Rohit emphasizes, we risk missing out on the next Gödel or Wittgenstein. When there are good asymmetric payoffs, it would be wise to risk failure.
I share Jim and Rohit’s measured excitement toward the rise in the creator economy. More people are experimenting in public and showcasing their skills. There’s something more human about this and I suspect this will lead to more cross-pollination of ideas. And I deeply resonate with Jim here: “Humans were designed to create, humans were designed to play, humans were designed to figure shit out and error-correct and work together.” My life philosophy- and the philosophy I believe should extend beyond the startup world- is to embrace life as a grand experiment, with oneself as the lab rat. By reframing failures and dead ends as integral parts of this experiment, they become stepping stones toward progress. Not only does life become richer this way, you inherently build your tolerance and appetite for failure. This could be the greatest gift you can give to yourself.
We need more madman’s labs. We need more experimentation. Because, as Rohit aptly states, "if failure is not an option, all you get is the menu that's been laid out."