Jeff Bezos on Two Different Kinds of Failure

Jeff Bezos, the founder of Amazon, has often spoken about the nature of failure and innovation, especially in the context of his own company’s journey. He distinguishes between two different types of failure: “experimental” failures and “operational” failures.

Here’s a breakdown of his perspective on both:

Experimental Failures

• Nature: These are failures that occur when trying something new, bold, or innovative. They’re the result of venturing into unknown territories and taking calculated risks.
• Bezos’s Perspective: Bezos believes that experimental failures are not only necessary but also valuable. They are a natural consequence of the process of invention. Not every experiment will succeed, but the few that do can compensate for dozens of failures and have a significant impact on the growth of the company.

Amazon Examples: Many of Amazon’s services, like the Kindle or Amazon Web Services (AWS), were experiments that turned out to be hugely successful. However, there have also been misses, like the Amazon Fire Phone. Bezos often emphasizes the importance of being bold and accepting that failures will happen when you’re trying to innovate.

Operational Failures

• Nature: These are failures in established areas of the business where processes and operations are already known. They typically happen due to shortcomings in execution.
• Bezos’s Perspective: Operational failures are less acceptable than experimental ones. Given that they occur in established realms where the processes are set and expected to run smoothly, such failures point toward flaws in execution or oversight. Bezos stresses that these should be rectified and learned from to prevent recurrence.

Amazon Examples: If there were issues in the delivery of packages, problems with the website uptime during peak shopping times, or glitches in established services, these would fall under operational failures. Such issues are typically addressed immediately with an emphasis on improving systems to ensure they don’t happen again.

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— David Senra (@FoundersPodcast) September 1, 2023

In essence, Jeff Bezos’s perspective on failure underscores a broader philosophy: Companies should encourage risk-taking in the realm of invention and innovation while continually refining and perfecting their core operations. Embracing experimental failures while minimizing operational ones is, in his view, a recipe for long-term success and growth.