Monday, August 13, 2012

Guidelines for Failing

I hate to fail. So much. Maybe you do too? But it's important if you want to do something innovative. In the Washington Post blog, author Dominic Basulto praises the merits of failing early and often.

Innovative isn't just limited to engineering and software. It's important to innovate in your marketing, too. Here are some guidelines for failing on your path to success...

I have a client who runs radio stations. They wanted to start a classifieds website as an additional revenue stream. But the plan they had would cost them about $3500 to build. They knew they could get an audience because they could talk about it on air. But could they make it make money? They knew how much they needed to return in year one, but disagreed on how to get there. One partner wanted to charge for membership and listings. Another thought it should be free and revenue should come through advertising. The partners agreed to try the paid listings for 30 days. A set date, a clear target, and a back-up plan.

They advertised the site like crazy across their three radio stations: no car dealer or weight loss treatment has ever seen so much promotion in their small Nevada town. By Day 28, they'd made $213 in classifieds listings. They flipped a switch in the site's backend to make the listings free, and went out to present the site to their existing book of radio advertisers. By Day 60, they'd booked $6,213.

While giving away content that's funded by advertising wasn't a new idea, it was not what they set out to do. If they would have gone with the first plan, but didn't have a date they would evaluate, they might have dragged out the failure, might have lost out on that additional revenue, might have made their business lives miserable trying to get a bad idea to work. They were unemotional and now have time and energy for new projects.

Guidelines for failing:

  • Understand the parameters of what defines success for your project. Keep it limited in time and scope. Know what you can afford to lose.
  • Be unemotional. If you care about a project, if your ego is attached to it, you might drag on an effort that isn't worth its return. Step back and look at the evidence, then decide.
  • Keep your timeframe short. Fail early so you don't spend a lot of time on a go-nowhere project. Time is money, right? 30 days, 60 days. (Be sure to give yourself enough time though.)
  • Ask people. It's good to look at the numbers, but there is also a lot of value in opinions of customers, potential customers, industry peers. You might have a great offer but a slightly off presentation so it is important to know which piece is failing.
Fail well!