Innovation is trying out without knowing the outcomes
You can learn from failures, but it takes courage and an open dialogue. On autopsy.io you can find a whole series of start-ups that have not made it, with a reason for that from the founders themselves. From practical, “did not scale fast enough”, hilarious “another casualty in the decline of Flash” to tragic and recognizable to many, “stuck with the wrong strategy for too long.” The causes of the failure of start-ups are diverse. They are not innovative enough, the money runs out, there is no good team, people are overtaken by the competition or the product or service simply was not good enough. Did those failed start-ups not know this beforehand? Sometimes, perhaps, but the crux of innovation is to try something new that does not know exactly what that will bring in advance.
Moreover, if you try to innovate or start a business in the present complex time, you already know in advance that the strategies you have in mind will rarely turn out as planned. Where companies were able to hold on to a pre-formulated strategy two decades ago, you see that we now have to continuously adjust, based on feedback from the market. And the factors on which we (have to) react have become so interwoven in their mutual relationship that the consequences turn out to be unpredictable or not fully understood. Since no one can see all the consequences – even the most advanced algorithm can not do that yet – it is the art to learn to navigate instead of controlling. You have a point on the horizon, but how you get there, you have to be able to adjust that continuously. Such an attitude requires mental flexibility and resilience.
Respond on (unexpected) developments by being agile
What matters is that as an organization you learn to occupy such a position that you can quickly respond to various developments without problems. That means seeing what is going on and what that means for you as an organization and an individual. And the ability to actually adapt to these new insights. Paradoxically, you have to be prepared for the fact that you can not prepare for everything. What you can do, of course, is learning to deal better with the unexpected, learning to stay alert to change and learn how to use those changes where necessary. By spreading your opportunities for example, or not sticking to your first solutions and ideas, but looking further.
Use your failures to improve
Fear is a bad counselor. Research shows that it is an important factor that factor that retains the ability to reflect on their behaviour and actions, to take distance and get a good overview or think in alternatives. Fear reduces your world, makes you cling to what you already know and know and it is therefore a blockade for innovation. The fear often consists of two parts. First, there is the fear of trying something that can fail at all. And there is also the fear of talking about something that goes wrong or has gone wrong. But the question is whether failure is as terrible as we think. I think that failure is not the aptitude test that we now assign to it, but only an attempt with a different (negative) outcome than planned. And it is precisely this researching and enterprising attitude that is so important for navigating towards that dot on the horizon. So the fear of failure, a major blockade to innovation, is something we have to tackle. If we try something new in a complex world and that fails, then that is not something we have to blame each other for. Instead, we should learn together from the mistakes made. We should create a climate in which people dare to experiment, learn and share. In which they take complexity seriously and are open to intermediate feedback and feed forward (forward-looking response). Such a climate is becoming increasingly important as entrepreneurs must be agile and their self-learning ability is a crucial factor. If we fail to view things differently, we also change the playing field.
A nice practical example of start-ups who were not afraid to share the failure is HelloSpencer, a start-up delivery service. HelloSpencer wanted to be able to deliver any delivery order within 60 minutes. So: you place an order, via the site or the app, and after confirmation Spencer goes on the road and you can follow him digitally to your door. The delivery service did not make it. The founders announced in September 2015 that they could not get the business model for their all-in-call service. After several more attempts, the entrepreneurs placed their most important failures and lessons happily on their website. What did not work: dream big, start small. By starting very small – with just a phone number for text delivery orders – HelloSpencer hopes to grow organically. By not focusing on the logistics process, but the personal experiences between deliverer and customer, they got a lot of insight into the buying motives of customers and the confirmation that they really had something good in their hands. Unfortunately, because of this, people lost themselves too much in the illusion of the day and a clear focus was chosen too late. Secondly: make sure you get the numbers. Making delivery services cost-effective is ultimately about volume. Although there were more customers every week, the growth phase took too long. HelloSpencer had either needed more volume or a longer term financing. Neither were the case now. The last lesson of HelloSpencer: keep everyone on board; putting together a team with sufficient talent and energy is step one. But ensuring that everyone can continue to develop themselves, as a team but also on a personal level, is at least as important to retain people.
Personal failures and learnings
My own start-up adventure involves an innovative sports product and game concept called YOU.FO; you throw and catch an aerodynamic ring with specially designed sticks (see www.you.fo). My ambition is that YOU.FO will be played worldwide as a new sport and leisure game. If I have learned something during this initiative in recent years, it is that you have to continuously adjust your strategy based on feedback from the market. We won several (inter)national awards and I assumed that YOU.FO together with distribution partners was put on the market top-down. In the end, the practice turned out to be much more unruly. For example, our first attempt to launch YOU.FO in the United States failed. I found partners in New York that I hired for a year for marketing and sales. That has not yielded enough. Because of the monthly fee, there was too little entrepreneurship to really go for YOU.FO through the fire. The lesson I learned is that from now on I will only select partners who want to invest in advance and also commit financially, for example by paying a license fee. This ensures motivated enterprising partners who, just when things are not going well, persist and seek new ways. In addition, I also learned that this innovative sport game requires much more bottom-up marketing effort; people have to experience it by doing and creating the learning curve that keeps them enthusiastic. Together with partners in Europe, India and the Middle East, I am now going to set up communities where local entrepreneurship is central. That is a completely different approach than I had in mind at the beginning. We are now active in 10 countries, but that is, until today, with trial and error. And, this sporty business adventure lasts many times longer than expected. In that respect I like the lessons of HelloSpencer, autopsy.io, The Institute for Brilliant Failures and others! They encourage to learn from previous failure without embarrassment. That sharing and learning from failures does not only have to be done afterwards. Especially when you are in the middle of a start-up process, it is relevant to reflect on your own assumptions and approach at set times. And, to share these reflections with others. All this under the guise: Sometimes You Earn, Sometimes You Learn. And sometimes that comes together fortunately.
Entrepreneur and cofounder of the Institute for Brilliant Failures
This is an edited version of a contribution published in the journal M & C (1/2016).