Tuesday, May 29, 2018

Why failure can be an innovation aphrodisiac

If you stick around innovation long enough you'll probably come to believe that we are all dead-enders.  After all, what group of people could willingly embrace as much failure with such a positive attitude?  Failure, you'll be reminded, is necessary for innovation.  I like to quote the saying that my ski instructor told me years ago - "if you aren't falling, you aren't trying hard enough".

Many believe that failure is important for innovators because people learn from their failures.  That is, they will fail once and try again, only hopefully not repeating the same old mistakes as the previous time.  Others believe that failure makes an innovator more resolute, more willing to stick to an idea even more aggressively the second time around. Both of these reasons have some truth to them.  Every innovator is (hopefully) smart enough not to repeat the same mistakes again and again, but I'm sure some do.  Every innovator knows that innovation is difficult and often insurmountable obstacles can be scaled through sheer determination.  But neither of these is the real reason that I think failure can be so important.

Failure changes your perspective

If nothing else, I think failure is so interesting and so vital for innovation because it changes your perspective.  If you've really failed, all your hangups and inhibitions may go right out the window with your failure.  When you've failed, you may have to start at rock bottom, without any assets, without any investments.  These facts may lead to an entirely new way of thinking.  When you start with nothing - no money, no credibility, no assets - you think about solving problems in a completely different way.

One way that reaching "rock bottom" can help clarify innovation opportunities is that do get started, you've got to create a solution that results in revenue.  No longer can you rely on friends and family or a generous corporate sponsor.  To rebuild a company or brand, you can't start on promises and VC money - you need to build a product or solution that can drive revenue now.  Which means you've got to do a better job understanding not only what customers want, but what they are willing to pay for.

Wants and needs are not enough

For example, I want to get to work in 10 minutes, although my commute is closer to 20.  I need to get to work safely, and in a state where I am prepared to do good work.  But I'm not willing to pay for saving 10 minutes if it means my jet backpack doesn't protect me from the elements or from low flying planes.  This is the classic mistake that the Segway made - it did revolutionize transportation, just in ways no one cared to experience.

What customers want to solve is important, but what they are willing to pay to solve is perhaps just as important.  When you start from zero, after a magnificent failure, one of the first things you must do is figure out how to drive revenue in the short run.  Because many sources of funding may dry up, and financial backers will want to see you create revenue before funding your business or project a second time.  This is when failure is an asset, if you are willing to treat it that way.

Too comfortable

Too many corporate innovation teams face this dilemma - they are overfed.  While they insist that they don't have enough money to innovate successfully, too many of them have in fact too much.  What they need is more constraints and less financial resources, but more time.  Time to discover needs, investigate markets and customers, find the real need customers want to solve and are willing to pay for.  I think a lot of corporate innovation fails because innovation teams are too removed from their customers and too reliant on reports and fail to go meet customers and identify needs that customers have that need to be solved, and that customers will pay for.   Perhaps every innovation team and entrepreneur needs at least one spectacular failure that will lead on to more inquisitiveness and the ability to innovation to get to revenue quickly.
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posted by Jeffrey Phillips at 10:34 AM


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