Thursday, Oct. 13, 2011

The Importance of Failure: Why We're Wrong About Being Right

American inventors have given us some of the world's greatest advancements in electrical science, engineering, medicine, the auto industry and the Internet, but they've also produced some of history's greatest flops: the Ford Pinto, Smell-o-Vision, Crystal Pepsi, the Segway and — who could forget? — Snuggies for dogs. These famous flops are reduced to punch lines or trotted out as cautionary tales in boardrooms and business schools across the country. What we don't realize, then, is that the fate of American innovation is actually tethered to our willingness to fail.

On Wednesday night, some of the country's leading technologists took the stage at Chicago Ideas Week to discuss the future of the tech industry in the U.S. They discussed the current state of the Internet (did you know that every second something is purchased on eBay from a mobile device?) as well as what comes next. But no matter what the future of tech yields, it's not what we're doing right that will lead to our success in technology. The industry is strengthened by mistakes, but we're fostering a culture of people who don't accept them. "We beat up people who fail, and I worry about that," said Groupon chairman and co-founder Eric Lefkofsky. "Can we really honor risk takers and not pounce on them when ideas don't pan out?"

Steve Jobs founded Apple Computer in the mid-1970s, a time when the cost of failure inside the freshman computing industry of Silicon Valley was next to nothing. "He wasn't afraid to fail," said Monumental Sports & Entertainment founder Ted Leonsis. "People forget the Lisa. It was his first attempt at a mobile device and it failed so badly they kicked him out of the company. His is the greatest comeback of all time."

"People think they need gray hair running a business, but the best are founder-led," Leonsis says. After Jobs' first departure from Apple in 1985, the company's stock slid while it endured a string of flops. Why? Because it traded creativity for traditional business sense. Apple figured out its mistake in 1996, when Jobs returned to helm the company he founded.

Pandora is another great example. By the time founder Tim Westergren had a working prototype of his Music Genome Project, he had maxed out 11 credit cards, was about $150,000 in debt and was unable to pay his staff. Loyal investors saved the project, which is now the Web's leading music-recommendation site. "The one thing that held this company together was the unshaken belief that this idea was a good one," he said. "Most ideas are definitionally crazy. It's because they haven't been tried before."

So let's be open to failure. If we don't stand behind our risk takers when they fail, we're in danger of snuffing out their willingness to learn from a mistake and create something a little less Lisa and a little more iPhone.

Besides, there's nothing America loves more than a comeback.