Silicon Valley’s “Fail Fast” Method Does Exactly That – Fail

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Not so long ago, Silicon Valley was a blue ocean, a vast sea of ​​uncontested market space. Disruptive innovations were built on the foundations of a knowledge economy. Startups turned into scale-ups — fast. The hidden gems of Silicon Valley’s high-tech transformation have become the California Gold Rush of the 20th century. Like prospectors in a boomtown, high-tech investors are betting on the promise of a strike.

However, things are constantly changing in response to reality, but also to fear and failure.

It’s undeniable that Silicon Valley is a “startup paradise,” but today many of these companies suffer from turbulent market trends, talent dilemmas, and 101 other reasons that make it a less favorable environment for startups. founders. They have run out of money, have misallocated resources, or been blinded by their own ideas. Whatever the reason, what was once called the journey to success now looks more like a path with many possible points of failure along that journey.

Related: The Future of Smart Startups Lives Outside of Silicon Valley: Here’s Why

Maybe Silicon Valley needs a reset

Achieving massive scale at breakneck speed is called blitzscaling, and it’s this strategy that gives Silicon Valley’s model of entrepreneurship its uniqueness. Evoking the sentiment of “lose big, win big”, he ushered in an era of high-risk strategy and massive growth. It has become synonymous with the word “entrepreneurship” himself. But the entrepreneurship formed within a cluster of high-tech companies in California is not the same as the entrepreneurship elsewhere.

Indeed, flash scaling in high-tech industries results in heavily funded companies that have volatile markets and are highly reactive to what is happening around them. In the Silicon Valley model, efficiency isn’t so important when the only thing that matters is gaining market share and beating the competition. And if you’re not capturing market share, efficiency is irrelevant anyway.

But now the inefficiencies are catching up.

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The current model is failing

The disruptive innovations that emerged from Silicon Valley’s blue ocean strategy cannot be easily recreated. Historically, tech investors have been able to cushion their risk of failure by taking advantage of the law of averages – the proximity and abundance of tech startups provided the best possible environment for risk-taking. The more founders and ideas they bet their money on, the more likely one of them will stay. And once that happened, blitzscaling made the return on investment worth all the risk investors took to get there. In Silicon Valley terms, it was a success.

However, large investments filled the gap where the efficiency should have been, masking the cracks in the foundations. In 2022, the market has changed. Where there was once abundant optimism, there is now caution as investors and organizations try to understand the effects of global supply chain issues, the post-pandemic market and inflation. The mounting pressure soon revealed these fundamental cracks. Now suddenly the company is more invested in influencing the outside markets rather than supporting the honesty and integrity of the idea and realizing that the founders are fundamentally human and therefore flawed – a trait that is normal. But the system is designed to put the founder at the center.

Am I saying that the founders are not important? Of course not. But these are not the only success factors that predict the sustainability of a business. The founder may be a genius at creating innovative products, but may not be so good at developing sophisticated sales strategies. What I’m saying is this: rather than asking about the Founder’s plan and how we can support it, we should ask ourselves what the idea itself needs to succeed – and more importantly, which would cause it to fail.

Related: The Future of Smart Startups Lives Outside of Silicon Valley: Here’s Why

A better approach

The founders are human; they make human errors. Getting the wrong market, forging bad partnerships, not understanding your client, etc. are cognitive errors. When we focus on the founder and invest in his plan, we expect him to find all the answers. Investor and venture capital platforms are designed to support the founder, but where does this strategic plan come from? How do you know if it’s the right one? Are people honest? Does the founder acknowledge any shortcomings or shortcomings?

When we focus on the idea rather than the founder, we are better able to communicate the unknowns. Determining what the failure points of an idea might be is a better way to help companies prepare for things beyond their control; some of these could be the founders’ failing points – a unique perspective and experience in Pride Warning. Failure prevention is all about creating a plan of action before foreseeable problems arise. By focusing on the critical failure points that could cause setbacks, you can prepare and strategize around them. Maybe it’s not as popular to talk about being an elite “failure preventer”, but it’s certainly cooler than being caught out in a changing market. Maybe we could give a different kind of answer and ask more people in your business the billion-dollar question: what would make our business fail?

The strategy of failure

The facade of success has worked for Silicon Valley for a while, but all signs indicate that the stakes are actually too high to get it wrong and fail. But in today’s economy, the blitzkrieg of years past has left many companies with an Achilles’ heel. If you have to ask yourself “why are we falling short?” it’s too late. What was once considered a Silicon Valley success story looks very different from the perspective of uncertain times. Businesses need to start with the end in mind and then come up with action plans and solutions to address potential points of failure that may arise. Instead of filling the cracks with the fleeting returns of lightning scaling, fill them with a solid, concrete strategy for dealing with potential failure. And if your company, your team, and your customers focus on preventing points of failure, you’ll get closer to seeing the vision of success, and you might actually find hidden opportunities.

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