The Only Scenarios Where Repeated Failure Is An Option

Everybody fails from time to time. It's a part of life. But repeated failure can be a sign you're stuck in a rut, not learning from your mistakes, or need more support. Let's discuss risk taking and when repeated failure is appropriate and when it's not.

When Repeated Failure Is An Option

On the way back from a tennis tournament I listened to a TED Radio Hour episode called, Failure Is An Option. My hope was to learn some new perspectives. I wanted to hear why failure is OK. It takes a lot of courage and motivation to try, try again. After all, I've been through more failures than I'd like to admit.

Guy Raz, the host, featured a man named Astro Teller who heads up Google's X division. He calls himself, “Captain Of Moonshots,” to remind himself and his team to always think big. The X division is a highly secretive division within Google that tries to come up with revolutionary devices and applications. They are the 1% within the 1% of people who get a job at Google.

Dr. Teller is a well educated man. He has a PhD in Computer Science from Carnegie Mellon University and a BS and MS in Computer Science from Stanford University. On the podcast, he proudly explains that his employees get bonuses for presenting their failures on stage. The bigger their failures, the bigger their bonuses and the more they celebrate because it means they went for huge wins.

Dream Big With Unlimited Resources

I was waiting for the hook to help us regular folks get more comfortable with repeated failure. But unfortunately, it never came! Guy moved on to the next guest after a word from his sponsors.

What Dr. Teller and Guy are essentially saying is this: if you work at a company with unlimited resources ($90+ billion in cash), you should always dream big. You have no downside for repeated failure because 1) you are working in a department that has been green-lighted to create audacious new things. And 2) even if you fail, it's not your own money you're wasting!

Once I realized there were no pearls of wisdom to learn from Dr. Teller's guest spot, I began to think about scenarios where taking big risks should be a given for the rest of us.

Big Risk Scenarios When Repeated Failure Is An Option

When your own money and time are at stake, repeated failure is not something to strive for. However, there are a few big risk scenarios when failing over and over again can be an option. Let's take a look.

1) When you're born or marry into a rich family

Before William Gates III was born, he must have asked God if he could be born to William Gates Sr. and Mary Maxwell. His dad was a prominent lawyer. And Mary served on the board of directors for First Interstate BancSystem and the United Way.

Gates' maternal grandfather was JW Maxwell, a national bank president. With money and connections, Gates III knew he stood a better chance at getting into Harvard. Further, knowing that his parents were rich, he knew that there was no downside to dropping out of Harvard and starting Microsoft.

Thanks to his success, he set up the Bill & Melinda Gates Foundation to give back their fortune. I'd say this was a great deal for everybody involved. The Gates' Foundation has made significant contributions worldwide. They remain committed to solving gender inequality, reduce child mortality, improve health coverage, and so much more.

Given Gates' abundant wealth and resources, he can afford repeated failure. And he has taken big risks to solve big problems like sanitation in third world countries with toilet challenges and expos.

2) When you're not spending your own money

Why are Congressmen and women OK with a government shutdown? Because they still get paid even though everybody else doesn't. Why do people vote to raise taxes on other people? Oftentimes it's because they don't have to pay higher taxes themselves. When you have the ability to risk other people's money for your own dreams, you should press hard! Must read: The Four Different Ways To Spend Money By Milton Friedman

The most common example of using other people's money for your own benefit is when you borrow money to buy property. If the property market rises, you get all the spoils while the lender only gets a tiny interest rate in return. But if the property market tanks, you can hand over the keys and walk away in a number of non-recourse states. Many people did this during the 2008-2009 financial crisis, screwing the rest of us who stayed true to our contracts.

Repeated Failure Is Common At VCs, Startups

Another great example where failure is OK is if you raise money for a startup. There's less of a need to focus on profitability when you burn someone else's money. Not even the VCs are investing their own money in your startup, so don’t worry!

Heck, a couple startup founders of a company called Secret sold several million dollars worth of stock to their VC investors and then decided to shut the company down six months later! Because most startups fail, it's often wise to raise as much money as possible. This way you can have as good of a time as possible while your startup is still alive. If your startup succeeds, everybody wins. And if your startup fails, it ain't your money.

Related Reading:

A final example is if you get really lucky in an investment or at the casino. In 2000 I knew VCSY going from $3 to $165 within six months was unsustainable. So, I took profits at $156 and bought some risky B2B stocks. After losing about 10% within a couple weeks, I cut my losses. I held cash, and after a while bought a condo in San Francisco. Taking on a $400,000+ mortgage seemed risky at the time, but I figured I had a $150,000 buffer thanks to the profits made from VCSY.

3) When life has already passed you by

If you've already had a go at climbing up the corporate ladder or starting a business, people are more accepting of your repeated failures if you decide to try something new. Age gives you more respect amongst your peers, for the simple fact that you have more experience.

Now that I'm in my 40s, my time for success is over. I don't crave it. Nor do I care to make a name for myself anymore compared to when I was in my 20s and early 30s. Now it's just about spending time with family. But if I were to try to start something new and fail, because of my situation, I don't think anybody would really care.

4) When you have a working spouse with no dependents.

Life is easier when you have a partner you trust. If you're in a rut, it may be worth trying something new. This is especially true if your partner has a steady job that includes healthcare benefits for you. No need for both partners to be miserable at work!

Besides negotiating a severance, building passive income, and having some online income back in 2011-2012, knowing that my wife wanted to continue working helped give me the confidence to leave a well-paying job to focus on Financial Samurai. We made a pact that she could also engineer her layoff when she turned 34, which she did two years later.

I'm not sure if I would have left my job in 2012 if we had had a baby then. Having a baby kicks your sense of responsibility into overdrive. You also become much more risk averse.

Don't Underestimate Your Abilities

By failing to prepare, you are preparing to fail. – Benjamin Franklin

Repeated failure is OK if you work at Google X or find yourself in one of the above scenarios. But in any other situation, I'm not sure if taking excessive risk is worth it. At some point, in order to survive, you've got to accept your situation and do the mundane.

It may sound depressing to do the same soul-less thing over and over again for the rest of your life. That's what most Americans do until 61. So let me say clearly that even if you had all the education and money in the world, life may not be better. Therefore, you might as well take some risks now.

Even The Smartest People Have Repeated Failure

Imagine you have a Bachelor's degree, a Masters degree, and a PhD in computer science. Then imagine you have a team of 100 people all with similar academic credentials tasked with creating the most innovative product known to man. Now imagine you have an unlimited budget and could not fail.

What on Earth would you create? Maybe a commercial flying car? An agricultural tool to 10X the output of wheat? Or perhaps a device to help the visually impaired to see 20/20 or better?

Nope. Over the past seven years, the team at Google X has created none of these things. Instead, they came up Google Glass.

Google Glass Is Dumb

Do you see anybody wearing Google Glass today? Of course not, because they've all been punched in the face by folks who don't like others taking creep shots of them.

For all of you who didn't spend hundreds of millions of dollars and years of your life creating Google Glass, well done! Maybe doing what you've always been doing isn't so bad after all. Or maybe, you don't need credentials or permission from anybody to try something new.

Further Reading

Readers, when is repeated failure OK? Why do you think people with brilliant minds and unlimited resources haven't come up with anything better for us regular folk?

In an upcoming post, I discuss why so many folks don't take action to improve a bad financial situation. If you're one of them, perhaps you can share your reasons why. Stories can be from not getting out of a bad marriage, not leaving a terrible job, not getting in shape, not starting a business, etc.

(audio version)

Suggestions For Starting A Business

Start your own website. Every business needs their own website. Here's a step-by-step tutorial showing you how. Not a day goes by where I'm not thankful for starting Financial Samurai in 2009. I never would have imagined being able to engineer my layoff from a well-paying job in 2012 to just write and be absolutely free.

You just never know what might happen until you try. Back when I started, I had to hire someone for $1,500 to launch FS. Now you can launch your own website in under 30 minutes for less than $50.

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Check out the Innovation Fund, which invests in the following five sectors:

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Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!

The investment minimum is also only $10 while most venture capital funds have a $250,000+ minimum. You can see what the Innovation Fund is holding before deciding to invest and how much. 

In addition, if you enjoyed this article and want to get more personal finance insights and tips, please sign up for the free Financial Samurai newsletter. You’ll get access to exclusive content only available to subscribers.

33 thoughts on “The Only Scenarios Where Repeated Failure Is An Option”

  1. My biggest learning opportunities have come from failures. I’ve not yet had the ability to fail with other people’s money… It is still fun to think about what you would do if you knew you couldn’t fail (in a meaningful, life-crushing way).

  2. Great article!
    When I read it, I thought of one thing my mentor once told me that innovation and starvation normally goes hand in hand!! So people who sits on a pile money rarely comes up with anything new. Whereas true innovation normally comes from companies with great leaders that are close to bankruptcy….
    Thanks for sharing:-)

  3. Hmmmmm . . . “At some point, in order to survive, you’ve got to accept your situation and do the mundane.”

    I get the point and it’s a really important topic, so thanks for sharing. Though please accept this humble perspective from a professor working with young leaders each and every day. Over the past couple of decades, I’ve seen a shift . . . a marked shift from students willing to fail to today’s student entirely unwilling to fail.

    To me, this is a serious threat. Think Ghostbusters remake. Karate Kid remake. iPhone 5, 6, 7, 8. Politics and civics of today, etc. etc. Without embracing failure, new knowledge is typically not created. No Beatles. No Led Zeppelin. No MLK. No Light Bulb.

    I’m intrigued by the question — how did we become afraid of failure?

    Thanks again.

    1. Is it that today “everyone gets a trophy” and can no longer deal with failure?

      Perhaps we are raising “reasonable” kids these days:

      “The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.”
      ― George Bernard Shaw

  4. I interned at Google when Glass was in beta. I think the reason why it hasn’t found a market is because it doesn’t solve a problem that people didn’t know they had.

  5. Repeated failure is alright if they can learn from it and try to make it better. You want to create something that a lot will like and mixing in your view of how to make something and what others would want from a new product/company will at least have a shot of success. If it fails then learn from what failed and try something else that may work with the mindset that you can make a successful product or company but you have to adjust expectations.

  6. Your point about Bill Gates made me laugh. Oh boy was that smart of Gates to negotiate with God like that! Everybody wins!

    My ex brought a Google Glass and I tried it out. It was weird… basically one of your eyes is staring at a very small yet clear monitor haha. Google fails a lot… they’re profitable because the search engine is a powerhouse but they have the silliest projects. I like their experimentation though.

    Failing with intent to continue is how you eventually find success.

  7. Money Miser

    Mrs. Miser works for a startup and I have to agree, they love spending other peoples money! I can’t believe how heavily funded this start up is, and the salaries, benefits and bonuses to boot just seem way over the top for a business with zero revenue.

    Maybe you’re right, maybe they do just want to live it up until the money runs dry.

  8. FS, l love it that you describe this process of repeated-failure as an ‘option.’ ‘Failure’ is a scary concept for me, but ‘option’ is not. Wish I read this post 30 years ago!

    Nassim Taleb’s “Antifragile” addresses the process you describe. “How do you innovate? First, try to get into trouble. I mean serious, not terminal, trouble. …. The excess energy released from overreaction to setbacks is what innovates!”

  9. Heh heh, I love the Google glasses dig. Nice one.
    I don’t think repeated failure is good. Failing is okay, but you’ve got to learn and improve.
    Repeated failure is demoralizing in real life. You need some successes too or at least make some progress.

  10. I think repeated failure is okay as long as you and everyone involved are okay with that being a possible outcome from the start. Lots of ideas fail, but what is unfortunate is when a good salesmen makes a moonshot sound like a homer, and then hurts partners or investors (who maybe didn’t do their due diligence).
    Also, I think most moonshots fail, b/c people don’t really want to go to the moon, they just want their current life to experience incremental improvements – think a smartphone vs. cellphone, CD player vs. steaming music, or typewriter vs. early computer. All are revolutionary but they are also just incremental improvements.

  11. tokyorealestateman

    Benefits of Wise RISK
    I own 15 apartments in Shibuya, Tokyo so I created construction company over the years because it is cheaper that way and also better in terms of quality as well to custom make materials. We had all these tools and a workshop 60 km out of Tokyo to make things too.

    all beautiful with natural materials

    Then we decided to start making technology gadgets out of hardwoods and metals. I bought a classic type 2 bus to drive around Shibuya and market these computers as well. Even made some street fashion stuff tshirts, hats and stickers ect. Now we have sold some of these devices but what happens is the gear we make and the cool van we have attracts a lot of attention and I keep meeting people who are interested in buying real estate and I keep generating leads and sales for the real estate company that I also own with another guy. Land is a much easier sell than gadgets are. I just had a lady last month called me to order a Bluetooth system and we helped her purchase a house in Yokohama.

    the unintended consequences of taking calculated risk…We already had the workspace and tools these were all paid for and doing nothing.

    I am redoing the vans interior this month and turning it into a youtube studio on wheels.

    you can see some of our computers and gear at our Instagram shibuyarepublik.

    Thanks as always

  12. Great food for thought and true on so many levels. Startups, the government and such really do seem to spend so frivolously when it isn’t their own hard earned money at stake.

    I’m glad Google Glass was a flop too. It totally is creepy!

  13. Thanks for writing this poignant post. After hearing you as a guest on Noah Kagan’s podcast, I gravitated toward your idea of creating an online present yourself through blogging. I visited your site here and followed the simple steps of creating a blog and wha-la, was born. Besides documenting the journey of my own personal growth through podcasts and books, perhaps I can add value to others by posting highlights of what I’ve listened and read. With $107 in, I have the next 3 years to carve out a slice of space in the niche for personal growth junkies perhaps. Thank you for sharing the wealth of knowledge. I hope to do the same to other as you have done for us. Peace.

  14. I disagree with the idea that google glass is a failure. It’s not a commercial success- yet. The larger point about failure is a good one, but I think a more interesting topic is fear of success. So many people faced with succes choose to fail instead, why?

  15. Chumpmenudo

    I enjoyed the post. I’m a CEO at a VC backed tech startup, so I’ll add a couple of comments:

    1. VC’s definitely act like their LP money is theirs….
    2. You are right on regarding OPM. When our tax dollars are used by government to fund research, its largely wasted at national labs and universities…why? Because there are no negative repercussions for failure, and no one is held accountable.
    3. Great scientists know that discovery is typically made in small increments over long periods of hard work, a bit like saving for retirement. Moon shots in research, like lottery tickets, are fun, but do little to advance the science.



  16. What about cures for many diseases like ALS for example. We are repeatedly failing at finding a cure, but it’s ok because it means are continuing to try. If we stopped failing, it would be great IF we found a cure and it worked! But it would be absolutely terrible if we stopped failing because FUNDING would stop and we would not be able to continue researching and testing possible cures.

  17. Joey Graziano

    Great post! Might I add, unlimited time may be a great time to gamble on self development. When I was in my early twenties I had a dead-end job that paid the bills with only 30 hours of work. Being young with no family, no serious relationships or obligations I then started to invest in myself after many years of debating how I should best pursue wealth. Keep in mind, I grew up poor and did not have a high school diploma or any technical skills, so my self-esteem always detoured me from investing in personal skills. I felt internally that poverty was a genetic disorder that I inherited. So why waste money on even trying?

    But since I had so much time on my hands why not invest in myself and mastery? After all, if I failed a certification test or job interview no one really had to know about it. I could just move on to the next thing. This mindset motivated me to pursue my high school diploma, undergraduate degree and many certifications that contributed to mastery in skills and then eventually a six-digit income.

    All these great attributes simply because I realized that the failure didn’t really negatively affect my life so long as I kept moving on.

    This post helped me analyze a mindset in my life that lead to personal success. Thanks for writing!

  18. Grant @ Life Prep Couple

    I’m pretty happy with what smart people with brilliant minds have come up with for us regular folk. Increased life expectancy, computers, smartphones, internet, and on and on and on. You have high expectations Sam.

    I believe people stay in bad situations because of fear. Mainly fear that change would be worse. When getting addicts to enter rehab they always try to get them to rock bottom. If you don’t change you will be arrested, lose your kids, lose your job. Then staying the course seems worse than the change.

    1. I probably do have to lower my expectations now that I’m a parent. Low expectations = greater happiness.

      One of my goals for the next few years is to go the easy route instead. B/c hard is hard, going easier is the way to grow faster.

  19. This is part of why I am aiming for financial independence. I want to be able to go for big goals with the downside of failure being minimal. Right now if I go big and fail I can’t feed my family. Google X is not reliant on generating income, so they can dream big and fail big. I would also like to put myself in a position where I am not reliant on generating income. My goals would be very different from Google’s, but I still would like to remove that need.

  20. The Alchemist

    I love it when you splash the invigorating cold water of harsh reality all over bullshit, Sam. LOVE it! Personally, I’m beyond done with the SiliValley mantra about failure. The observation about Google Glass is dead on and had me laughing out loud.

    Great way to start my Monday, thanks!!


  21. I think we have not come up with anything better because we are limited by our imagination and technology. We must imagine what we want to create and for truly revolutionary things it takes that imagination in line with the correct technology to get there. The iPhone (which I would argue did change how we function) could not have been created in the 1980s. There was no technology for it.

    As for Google X…I hope they do come up with something soon. I imagine there budget is not endless anymore after the formation of Alphabet.

  22. Hi Sam,

    Great post as usual. But one thing though, having a baby can actually make someone take more risk. You feel the need to do better and leave a legacy for your kid(s). And mat leave kinda gives you time to brainstorm, come up with and start new projects.

    Great idea for your upcoming post. Let me know if you need the opposite view to make your post more balanced. Our story about how we took action to move from the 99% making $0 to 1% making $400,000+/year would fit right in.


    1. I agree ESP for women. A single woman might be content spending what she makes in a salaried job. Once a mom has gone thru mat leave, or puts up with questionable looks of lowered productivity in a highly competitive workforce due to reproductive reasons she knows she can’t depend on her one day job alone for income, not to mention realizing she has to balance additional responsibilities as a caregiver in the same 24 hours. A mom simply can’t put in the same overtime hours before without feeling guilt of neglecting maternal instincts. Generally that’s when u see female entrepreneurs emerge or she will take on financial risk considering the long term horizon ahead for her dependent . Life change motivates self employment leading to building systems for wealth automation.

      1. I agree, you’re willing to put in more risk to achieve more reward when yo have a dependent. That’s exactly what I’m doing right now, on mat leave, lol. I already feel kind of neglected at work (even though I’m on leave). I don’t know what I will do when I return from mat leave, definitely won’t be able to put in the same overtime hours as I did before.

  23. My husband was obsessed with Google Glass at one point, and I, of course, had absolutely no interest. Google came to my husband’s campus to let the students try the glass and had them fill out a survey. I think my husband is just obsessed with anything Google. If it weren’t for our family and my job in DC (aka family responsibilities as you mentioned), I’m sure his life would have taken a different turn, and the same would go for me.

    I think with family and especially kids, we tend to be more careful and take fewer risks. And I think it’s mostly for the right reason.

  24. Historically such moon shots have been funded by the government and some have given us great things, the internet for example. But I do on some level agree. Failure is good, it allows us to learn and adapt through consequences. But failure without learning, is just a waste of time.

  25. Interesting post Sam. For me the important thing is just being aware of the risk/reward trade-off. I’m willing to take moon shots here and there if the downside is limited. I kind of think of it like looking for cheap call options that never expire. Thanks for another intriguing article!

  26. On the question, “Why do you think people with brilliant minds and unlimited resources haven’t come up with anything better for us regular folk?”

    I’m not privy to everything that has or has not been created by such individuals. In general, as an assumption, I think back to the prior points you’ve made about going “all-in” when starting a blog. I’m not suggesting the folks at Google X, as in your example, don’t go “all-in”, but if the department still gets paid (or if someone working on a blog still has a job, such as myself) then there might not be the same motivation that would be derived if no other sources of income remained. Again, this is a stretch and a generalization.

    As with a number of things in life, the definition of failure and success can vary depending on the individual and even change for the same person. I think repeated failure is fine when you make progress at something. I’m a huge fan of Orange Theory Fitness, as an example, and constantly try and beat the “kids” in their mid to late twenties (I’m early thirties) on specific competitions during class. I haven’t beat them on any individual events yet (after 9 months), but I still improving despite my repeated failures.

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