Home How to Capitalize and Profit from Systemic Failure

How to Capitalize and Profit from Systemic Failure

Fear of failure rarely keeps serial entrepreneurs down. In fact, said Marc Pincus, CEO of Zynga at today’s FailCon event, “As entrepreneurs and programmers we’re used to failing aren’t we? If you look at it as A/B testing until you get the perfect product, then it’s not an issue. It’s important to learn from it…Otherwise, honestly, why change a f@#king thing if you’re not going to measure the impact?”

While Pincus is doing well with Zynga, he first saw failure with Tribe. Despite the fact that Tribe is still considered one of the first social networking sites, the founder has since learned that if you’re going to fail, “fail fast” and do it with clear success metrics in place.

Another startup that has managed to leverage failure for success is customer service platform Get Satisfaction. On a personal front, co-founder Thor Muller failed in raising too much money at a time when his then company Trapezo lacked direction. When the bubble burst, Muller was free to start Get Satisfaction with co-founder Lane Becker. Although you wouldn’t normally relate their company with failure, Get Satisfaction offers startups an opportunity to fail publicly via a Q&A-style platform.

Says Muller, “Companies used to get away with failing quietly. Now it’s amplified, it’s even SEOed. Good companies know that one of the best ways to convert people into loyal customers is to make amends for a failure.”

In March, ReadWriteWeb found that after customers complained about a company on Get Satisfaction, they often immediately offered solutions to fix it. We named it the leading idea aggregator for businesses.

Says Becker, “There’s value to perpetuating failure. As entrepreneurs, we need to believe that our successes will be at the end of this trajectory of failures, and we’re not the only ones capitalizing on it”

Becker went on to argue that bloggers and investors were just as tied to the cycle of failure as Get Satisfaction. “Investors need us to fail, otherwise there’d be no new companies to fund. Bloggers need us to fail. They need it to write at least two blog posts – one when we start and one when we finish.”

While Get Satisfaction’s presentation put failure into a new context, the message was an upbeat one. The systemic failure that happens due to poor market conditions, poor social sentiment or new technologies displacing old ones is a necessity. Without a willingness to take risks and fail, experimentation and new innovations would cease to exist. For most of us, that’s the reason we’re in the technology industry to begin with.

Photo Credits: Rebecca Reeve and Firefly the Great

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