September–October 2015
Article
Foreign Policy

Crash and Burn: Why Silicon Valley's Notion That Failure Leads to Success Won't Work for the Rest of the World

Format:Print

Abstract

In the frenzied hills of Silicon Valley, going bust is common. Research attests that close to half of start-ups supported by venture capital chew through most or all of their backers' money and that the majority never achieve their projected returns on investment. But failure, the now trendy argument holds, is the key to long-term triumph; if you fail fast and frequently, you gain a sense of what really works. To a certain extent, this equation rings true. The problem is that such stories remain both relatively rare and distinctly American. There is a real danger, though, in assuming that business practices that work in one part of the world will translate seamlessly to others, and in separating a specific aspect of one business culture from the legal and social environments that support it. Failure may not be a sin. Yet it's hardly a virtue either, and learning from it is a far cry from applauding its merits. Adapted from the source document.