How the 'Failure' Culture of Startups Is Killing Innovation

Far from being the measure of disgrace it once was, failure now seems to be a sort of badge of honor. But underlying many popular Silicon Valley failure clichés is entrepreneurs’ belief that “starting companies these days is akin to doing research in the past" -- as if we don’t need research when the opportunity to fail is so readily available.

Somewhere along the way, it got to be uncool to reduce one’s risk of failure.

Part of this may be because the risk of failure is dramatically lower than it used to be. But another reason is that many people don’t actually understand what research is, and have somehow conflated concepts like “rapid prototyping,” “lean startup,” “minimal viable product,” and “[insert] other smart-sounding thing to do” with avoiding research.

That kind of thinking might be fine for entrepreneurs focusing only on their personal risk and fear of failure, but it has real financial, cultural, and opportunity costs for businesses. (The opportunity cost includes all the needs that go unmet because they didn’t happen to occur to a lone entrepreneur or narrowly focused team.)

This attitude is also embraced and promoted by venture investors because the common wisdom is that high-risk investments have a bigger upside. To be blunt: Many VCs don’t care whether any one particular investment enjoys long-term success. They only care that a percentage of companies in their portfolio nets them a high return. So a successful outcome for the investors (like an exit or liquidity event) might result in the company and its product disappearing completely, which isn’t a good outcome for the users of that product and is often terrible for the employees.

But product design, and running a business, isn’t the same as investing. And that’s why research matters.

What Research Isn’t

Research, the kind I’m talking about, is not asking people what they want or how they feel. Nor is it a science. Design research is just a tool.

Businesses aren’t gathering data to publish in a peer-reviewed journal; they don’t need to worry whether it’s sufficiently “formal” -- just that it’s sufficiently useful. This means keeping an eye out for bias and conjecture of course, but that’s where critical thinking skills come in. Every skilled designer and developer has those.

Research is not about whether people “like” or don’t like something. No business should ever use the word “like.” Like is not a design word and has nothing to do with any business goal. It’s just a reported mental attitude with no necessary connection to behavior. (Same thing with “hate”: I may hate The Newsroom, but I still watch it. Why? The better to hate it.)

In market research, this is known as the difference between “declared preference” -- the fruit of focus groups -- and “revealed preference” or reality.

Yet focus groups are not research; they’re research theater. They tell us very little about how real people behave in the real world. The brilliant sociologist and father of focus groups Robert K. Merton later lamented their misuse in replacing research: “Even when the subjects are well selected, focus groups are supposed to be merely the source of ideas that need to be researched.”

When the research focuses on what people actually do (watch cat videos) rather than what they *wish they did (produce cinema-quality home movies) *it actually expands possibilities. But a common concern and excuse for not doing research is that it will limit creative possibilities to only those articulated by the target users, leaving designers devising a faster horse (lame) rather than a flying car (rad).

Worse than being limited by potential customers’ imaginations is being limited by one’s own -- especially if most business leaders admit they’re not going to be the next Steve Jobs. But why should they have to imagine how the world works, when it’s possible to find out through research? Their imagination is then better spent on designing the solution.

Still, no one should do any sort of research just to tick a box or CYA (cover your ass) -- that’s worse than doing no research at all. If your heart tells you to build what’s in your head, and there’s no one else you need to convince, go forth, my friend, and build that dream.

What Research Is

Clearly, our beliefs around failure and misconceptions around what research is may have stopped people from doing it. But research, especially applied research, isn’t more effective when it’s a big, complex process.

Applied research is merely a set of activities (ideally somewhat organized) that help businesses gather the additional information they need to achieve a goal. The amount, type, and duration of those activities can vary wildly, and that’s OK.

There is absolutely no right amount of -- or rigid process for -- research except what’s right given one’s goals and resources at a particular time. Someone can take two days, two weeks, or even two years depending on the scope of work and how much is both possible and useful to learn in advance.

The key is to be honest about how much we really know.

We need to identify our most critical assumptions, and then decide how to validate them. For example, a common assumption is that the organization -- given its structure and business model -- is capable of delivering the service the entrepreneur envisions.

An even more common, fundamental assumption in any design is that the problem the entrepreneur (and by entrepreneur I mean both at startups and inside large organizations) has decided to solve is a real problem -- and one where potential users will value having a new solution.

Maybe knocking out a prototype or building a company is the fastest, cheapest way to learn. But often it’s not. Sure, a prototype can tell us if the user understands the potential solution -- but if it’s solving a problem no one has, why bother building it in the first place?

The organization is better off finding some people who are the type they’d expect to have the problem, watching how they actually behave, asking what prompts them to behave that way, and learning how the user solves that problem currently. These kinds of questions allow businesses to design and build for reality so their solutions fit smoothly into a habit-driven, mundane world that isn’t as innovative as we like to think.

This example of how to do research barely scratches the surface, but it gives you an idea of what research can and should do.

When asked why no one else had addressed the "painful pain points" around email, Mailbox CEO and co-founder Gentry Underwood answered:

Why was there this strange gap in the market that we were able to move into? The gap was created by mobile devices themselves. It’s very natural when a new platform comes along to expect behavior to work as it did in the old platform, which means, for a smartphone, take a desktop email client and jam it down into the mobile device, because that’s all you know. You don’t know how people’s behavior is going to be different; you’ve never seen it before. Well, turns out we use our mobile phones really differently than we use our laptops. It’s taken us a while to figure that out and understand it, and that creates a design opportunity for a different kind of tool.

Why did Mailbox appeal to so many users where other apps had failed? I’d argue that research -- and their mindset about first understanding the problem -- had a lot to do with it. (And so far, all signs point to a good outcome for users of the product since being acquired.) But one of my favorite examples of a company that uses research is MailChimp: They managed to make a very humane business out of e-mail marketing and are very transparent about their research work on their blog.

Maybe knocking out a prototype or building a company is the fastest, cheapest way to learn. But often it’s not.So why does research get such a bad rap? Because of fear. It’s not a fear of failure, though. It’s fear of:

Wasting precious time. Coders want to code. Designers want to design. If critical inquiry and information gathering aren’t treated as an integral part of the process, it can feel like burning cycles. But going down blind alleys that could have been avoided wastes even more time.

Being a follower. First-mover advantage is kind of a lie, though an awfully seductive one. If we’re talking about learning valuable things for one’s business, there are few examples more instructive than watching someone else go first and flame out.

Losing control. Paradoxically, we feel more completely in control plowing forward with incomplete information. Because once we admit we don’t know one thing, it means having to face all the other things we don’t know or can’t predict.

Having to share credit. This is the one no one wants to admit to, especially in a culture where we celebrate the visionary magic of lone inventors in a garage. We all agree that it takes a team to produce something, but who wants to admit that they had to look outside themselves for a solution rather than build out the ideas in one’s head? It’s simply not as sexy.

It becomes immediately apparent, when we try to understand our fellow humans through research, that we are not rational creatures. But when it comes to making business decisions, research helps address that irrationality and increases our chances to succeed. And make no mistake: in a world where design makes or breaks success, all product design decisions are business decisions. Asking the right questions will lead to useful insights.

Editor: Sonal Chokshi @smc90