An Ode to Error: Entrepreneurship and the Importance of Being Wrong

6/17/11Follow @wroush

Is your world view marked by a sense of hopelessness? Do you obsess about past errors? Do you tend to minimize or overlook positive news? If your answers are yes, you may not be clinically depressed. Maybe you’re just being realistic.

Depressed people are often told they’re just not looking at things the right way. But many studies suggest that the opposite is true—that depressives actually have a more accurate picture of life’s harshness than the rest of us. If anyone is deluded, this data suggests, it’s the majority of mentally “healthy” people, who harbor rosy illusions about their own abilities and prospects, and who spend little time wondering whether their basic beliefs and assumptions might be wrong.

Overall, it’s probably a good thing that the optimists are in charge. If we focused too much on life’s difficulties, we’d never start anything new. Nonetheless, there may be elements to admire in the depressive mindset—such as a willingness to acknowledge the possibility, even the likelihood, of error in our judgments, and to see our error-proneness as a fundamental part of our being, rather than an aberration.

That’s one of the key messages of a wonderful book that I just finished reading: Kathryn Schulz’s Being Wrong: Adventures in the Margin of Error (HarperCollins, 2010). While Amazon has the book classified under “Psychology & Counseling,” it’s composed of equal parts psychology, neurology, history, philosophy, and journalism—and I’d argue that it’s also one of the best business books of the last couple of years. That’s because Schulz, a freelance journalist who formerly edited the environmental news site Grist, encourages readers to think about the overlooked benefits of wrongness—a condition that any entrepreneur worth his salt will experience even more often than his fellow humans.

After all, being an entrepreneur is all about undertaking new ventures, which entails risk and implies the possibility of failure. And when a product or business fails, it’s usually because the core assumptions behind it turned out to be wrong. So for any entrepreneur who’s taking sufficient risks, wrongness is a familiar experience—and one that shouldn’t be too strenuously shunned or avoided, since, from Schulz’s point of view, it comes with valuable lessons about what it means to be human, and what to do better next time around. “Far from being a sign of intellectual inferiority, the capacity to err is crucial to human cognition,” Schulz writes. “Thanks to error, we can revise our understanding of ourselves and amend our ideas about the world…However disorienting, difficult, or humbling our mistakes might be, it is ultimately wrongness, not rightness, than can teach us who we are.”

As I read Being Wrong, I couldn’t help applying Schulz’s insights to the specific community I spend most of my time writing about, tech startup founders. (If you don’t have time to read Schulz’s book for yourself, by the way, you can get the gist of it by watching this 18-minute video of her March 2011 TED talk.) One thing that came to mind was a meme I’ve heard repeated many times in places outside Silicon Valley. It goes like this: Venture investors in Seattle or Boston or New York or insert-your-city-here look on failure as a black mark. That means that high-risk ideas don’t get funded, and that if you’re unlucky enough to be involved in a startup that craters, it drastically lowers your chances of winning funding from local firms in the future. In Silicon Valley, by contrast, VCs see failure as a badge of honor and a mark of experience. Scratch the résumé of any successful Valley CEO and you’ll find a string of failed startups.

Now, how much substance there is to this meme, I don’t know. I can’t point to a quantitative study to back it up. But to the extent that it’s true, it points to regional and cultural differences in attitudes toward wrongness. A failing startup can be wrong in any number of ways. It can be wrong about the quality or features of its product. It can be wrong about the market that wants its product. It might find the right market, but then learn that it’s not as big as expected. Or it might just have bad timing. The point is that there are so many opportunities for showstopper mistakes in a typical startup that, from the badge-of-honor point of view, it would be silly to penalize the founders too harshly when a venture runs aground. Most Silicon Valley investors do seem to realize this—and they also know that truly great entrepreneurs, engineers, and salespeople are in short supply, meaning there’s often no choice but to recycle them.

There’s some great material in Being Wrong about how error arises, from procedural errors in operating rooms or airline cockpits to the groupthink that doomed Wall Street in 2008 to the types of mistakes that will sound more familiar to entrepreneurs, such as the problem of sunk costs: the more we’ve invested in a belief, the harder it is to let go of it. But Schulz’s most important contribution is to get us to think harder about the instant right after we’ve realized we’re wrong. This is a precious moment, and one that’s often squandered; as Schulz points out, mistaken belief A is usually replaced completely and instantaneously by new belief B, and we press on as if we’d never thought otherwise. For an entrepreneur, though, learning how to resist this urge to paper over one’s mistakes, and instead simply immerse oneself in one’s wrongness—if only briefly—can be an especially useful skill. For one thing, it’s the only way to form a more accurate understanding of the world, which is under no obligation to conform to our personal beliefs. Error “startles, troubles, and sometimes delights us by showing us that the world isn’t as we imagined it to be,” writes Schulz.

A few pages later, she argues that “wrongness is a natural and ongoing process, and we are not deformed but transformed by it.” If you buy that, then I think you also have to question elements of recent thinking in entrepreneurship circles—specifically, the “lean startup,” “customer development,” and “product/market fit” methodologies espoused by gurus like Eric Ries, Steve Blank, and Marc Andreessen. These metrics-driven approaches (which are obviously easiest to apply in the world of software startups) emphasize getting a product to market quickly, testing it with real customers or potential customers, gathering feedback, and “iterating” as many time as necessary to achieve the vaunted “product/market fit”—the nirvana where you’ve got something people are willing to pay for. The whole idea of this new “science of entrepreneurship” is to help startups avoid failure.

But the question is whether the product that finally “fits” has anything to do with your values or your original passion. If all of your data is coming from the people you think might be your customers, you might eventually end up with something that pleases this specific audience, but you might never realize that it was the wrong audience in the first place. And the chances are high that you’ll have to drop the most innovative stuff along the way. In your haste to build things people say they want, in other words, you’ll sacrifice features they would have loved if you’d taken the time to perfect them. As venture capitalist Fred Wilson has commented, “lean startup [methodology] is a machine—garbage in, garbage out.”

I’m not saying that the old dot-com-era model—raise millions of dollars, take a year or two to develop a product, and then find out whether there’s a market for it—was better. I’m not saying that entrepreneurs should take crazy risks developing products for which there is no demonstrable market. And I’m certainly not questioning the entrepreneurial credentials of people like Blank, Ries, and Andreessen. I’m just saying that a process designed to eliminate failure is also likely to eliminate creativity.

There’s a delightful passage in Being Wrong where Schulz points out that people sometimes seek out certain kinds of wrongness. To travel to a foreign country, for example, is also to take a trip inward, to a place where none of our adult experiences apply anymore and we’re like kids again, forced to play in the world in order to figure it out. “The farther afield you venture, the more you set yourself up for confusion, surprise, and the violation of your beliefs,” writes Schulz. “The desire to experience this kind of wrongness is seldom the explicit reason people engage in recreational travel…but it is often the implicit one.”

I think the best entrepreneurs have a lot in common with travel junkies: they’re willing to venture to places they’ve never been with the hope of finding something amazing enough to entice the rest of us to join them. And while they take along maps and supplies, they know they’re likely to get lost at some point, and that they might end up somewhere they never expected. Even these hardy startup travelers have a natural aversion to error—but they also know it’s a bad reason to stay at home.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

By posting a comment, you agree to our terms and conditions.

  • Kate

    Wade, time for you to write your book.

  • Tom Tierney

    > I’m just saying that a process designed to eliminate failure is also likely to eliminate creativity.

    The process Steve Blank lectures on isn’t about “eliminating failure”, it’s about creating a model to experience it earlier in the startup process. He tries to get entrepreneurs to “get out of the building” and talk to potential customers early and get them involved early in the product creation process.

    I do agree that we need to embrace failure more often as part of the learning process not only for entrepreneurs, but anyone in life.

    Thomas Edison is probably the poster boy for this discussion: he certainly had a history of many failed experiments, but we judge him by the weight of his successes.

    In sports we judge by wins/losses, the higher the ratio of wins to losses determines success. In life, certainly in an entrepreneurial life, the ratio of losses to wins might be equally important: failure is just another step on the road to success.

  • Pingback: Does Lean Startup Fad Miss Opportunities? « I'm There For You, Baby