Monday, May 7, 2012

7 reasons to Fail Early & Cheaply

Since everyone knows 19 out of 20 start-ups will fail... why not fail as soon as you can and as cheaply as you can?  In fact, recent evidence suggests that the #1 reason start-ups fail is trying to scale up too quickly/too soon.  Here are 7 reasons to FAIL as quickly as possible, and as cheaply as possible:

  1. Whenever you fail, you almost always learn more than if you succeed... especially if you start out with the goal of learning/deciding if a hypothesis will work.
  2. If you can fail quickly, you will likely have time and energy enough to try again!  (not necessarily a 'new' start-up, but instead another "hypothesis"/product variation to test in the current one).
  3. If you fail cheaply, you may have money enough to try again!
  4. If you fail early, you avoid spending too much time on a bad idea.
  5. If you fail cheaply, you haven't invested too much "sunk costs" into the idea, and can let it die more quickly.
  6. If you can fail quickly, it means you have wisely set criteria for failure (a rare thing indeed!)!
  7. If and when you succeed, you KNOW you have something, because you have defined (wisely) what success is, and your past failures prove that the current situation is "Worth" scaling up!
Final word of warning: Scaling up itself is a difficult challenge, so use the term literally, and slowly increase the rate of growth, rather than step function.

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