Marks & Spencer is the latest company to follow the likes of Google and Apple by taking up the idea of failing fast. They are looking at introducing new technologies, including augmented reality, into their latest campaign. This works for big companies who have a lot of money to throw at new ideas, but what about a new start-up; surely they can’t afford to fail?
In fact fewer than one in ten first time entrepreneurs succeed, but those who have already failed have a one in five chance of succeeding, more than twice the success rate. The learning they get from failing the first time means that they are more likely to succeed. Not only do they do better, they are also more likely to be able to raise finance.
Signalling and reputation are important factors in any game and having a track record as an entrepreneur, even one who has failed, gives you a better chance of raising money. It sends a signal to potential funders that you have experience and will probably do better than a first time entrepreneur.
This means that the most important thing an entrepreneur can do is to get on and do something, do it quickly, and even if they fail they will be in a better position the next time around. Failing slowly means they run out of money and never get to their next chance.
Failure can be a signal of experience. This is often also seen with high profile CEOs who fail in one role and are then soon recruited into another role for their experience.
This infographic gives more interesting facts about why it isn’t such a bad thing to fail.