Silicon Valley’s ‘Fail Fast’ Method Is Doing Just That — Failing

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Not long ago, Silicon Valley was a blue ocean, a vast sea of ​​undisputed market space. Disruptive innovations were built on the basis of a knowledge economy. Startups became scaleups, quickly. The hidden gems of Silicon Valley’s high-tech transformation became the gold rush of twentieth-century California. Like the search engines of a booming city, high-tech investors are betting on the promise of a strike.

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

There’s no denying that Silicon Valley is a “paradise for startups,” but now many of these companies suffer from turbulent market trends, talent dilemmas, and 101 more reasons that make this not a friendly environment for founders. They have run out of money, misallocated resources, or been blinded by their own ideas. Whatever the reason, what was once called the journey to success now seems more like a path with ample 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 a massive scale at breakneck speed is called blitzscaling, and it is this strategy that gives the Silicon Valley entrepreneurship model its uniqueness. Evoking feelings of “losing a lot, winning bigger,” marked the beginning of an era of high-risk strategy and massive growth. It became synonymous with the word “entrepreneurship” same. But entrepreneurship formed within a group of high-tech companies in California is not the same as entrepreneurship elsewhere.

This is because the fulminating scale in high-tech industries results in highly funded companies that have volatile markets and are highly reactive to what is happening around them. In the Silicon Valley model, efficiency is not so important when all that matters is gaining market share and beating competition. And if you don’t get market share, efficiency is irrelevant anyway.

But now, inefficiencies are catching up.

Related: Your employees want to be heard – Listen to the important details

The current model fails

The disruptive innovations that have emerged from Silicon Valley’s blue ocean strategy cannot be easily recreated. Historically, investors in advanced technology have been able to avoid their risks of failure by taking advantage of the law of averages: the proximity and abundance of technology startups provided the best possible environment for risk-taking. The more founders and ideas they bet their money on, the greater the chances that one of them will stick. And once that happened, the fulminating scale made the ROI worth all the risks investors took to get there. In terms of Silicon Valley, this was a success.

However, large investments filled the space where efficiency should have been, hiding the cracks in the base. In 2022, the market has changed. Where before there was abundant optimism, there is now caution, as investors and organizations try to figure out the effects of global supply chain problems, the post-pandemic market and inflation. The increase in pressure has quickly revealed these fundamental cracks. Now, suddenly, society is more invested in the external influence of markets rather than supporting the honesty and integrity of the idea and realizing that the founders are fundamentally human and therefore flawed, a trait. which is normal. But the system is designed to put the founder at the center.

Am I saying that founders are not important? Of course not. But they are not the only success factors that predict a company’s longevity. The founder can be a genius when it comes to creating innovative products, but perhaps not so much when it comes to developing sophisticated sales strategies. What I’m saying is this: instead of asking about the founder’s plan and how we can support it, we should ask ourselves what the idea itself is for success and, more importantly, what would it do that shattered.

Related: The future of smart startups lives outside of Silicon Valley – here’s why

A better approach

The founders are human; they make human mistakes. Choosing the wrong market, forming bad partnerships, not understanding your customer, and so on. they are cognitive errors. When we focus on the founder and invest in the founder’s plan, we hope they find out 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 recognize gaps or shortcomings?

When we focus on the idea rather than the founder, we are better able to make the unknowns known. Finding out what the failure points of an idea can be is a better way to help companies prepare for things that are out of their control; some of them could be the points of failure of the founders: a unique perspective and experiment in the admonition of hubris. Failure prevention is about creating an action plan before predictable problems arise. Focusing on the critical points of failure that can cause setbacks will allow you to prepare and work out a strategy to avoid them. It may not be as popular to talk about being an elite “failure preventer,” but it’s certainly more cool than being surprised at a changing market. Maybe we promote another type of answer and ask more people in your company the billion-dollar question: what would make our business fail?

The strategy of failure

The façade of success worked for Silicon Valley for a while, but all indications are that there is actually a lot at stake to make mistakes and fail. But in today’s economy, the blitzscaling strategy of years past has left many companies with the Achilles heel. If you have to ask yourself “why do we fall short?” it’s too late. What was once considered a Silicon Valley success seems very different under the lens of uncertain times. Companies should start with the end in mind, and then come up with action plans and solutions to counter any possible points of failure that may arise. Instead of filling in the cracks with the short-lived performances of scaling blitz, fill them in with a solid, concrete strategy to address possible failures. And if your company, team, and customers focus on preventing points of failure, you’ll end up closer to the vision of success, and you may find some hidden opportunities.

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