Not An Option
Alumni weigh in on ‘failing fast’
BRAD MOREHEADSREENATH REDDY
There’s no doubt the concept of failing fast is useful. At its core, failing fast amounts to testing out ideas on a small, low-cost scale to pinpoint potential risks. But can that failure backfire and compromise much-needed funding for a fledging startup? Is failure a good objective for an established firm? Should “fail” even be part of the nomenclature?
Two individuals well-versed on the matter are Sreenath Reddy ’08, senior director, Marketing Strategy, at Orbitz Worldwide, and Brad Morehead ’05, president and CEO of LiveWatch Security, a residential home security service. Reddy’s mantra to “fail fast and scale out the successes rapidly” has led to his group identifying several high-impact opportunities in the area of online marketing. Morehead similarly uses the approach to iron out marketing and product development strategies for LiveWatch.
|What about failing fast do you think is most useful?
Morehead: Entrepreneurs have limited resources, whether it’s time, money or people to throw at the problem. What’s important about failing fast is to figure out what’s the one thing you’re trying to solve with this solution. The operative word here is fast. What’s the other option, failing slowly? If you do anything slowly — except hiring — as an entrepreneur, it will really limit what you can accomplish.
Reddy: When it comes to making choices of where to invest, I think failing fast is the best way to identify areas of opportunity. In many ways, it’s a risk-mitigation strategy for entrepreneurs who don’t have a cushion. In your earlier stages, you’re trying to validate your business plan and weed out things that don’t work. But it’s not just for the entrepreneurs; I think it’s also essential for an established business.
How have you used failing fast to your advantage?
R: We focus on a few [travel] destinations, and we experiment a lot in figuring out growth drivers for us. Let’s say there’s a specific market tactic and we try it on the Chicago market. It’s much cheaper to do so, and I can quickly get a read before I scale it out to the entire business.
Has failing fast ever backfired on you?
R: If you’re in an offline world or making a product where there’s a significant investment involved, maybe there is a different approach. But if you can spend 10 percent of the investment, and eliminate 70 percent to 80 percent of the risk, why wouldn’t you do that?
Interviews condensed and edited for clarity.