LONDON — What does it take to build one of the most valuable new companies of the last quarter century? A high tolerance for failure, apparently.
Amazon’s vice president for global innovation policy and communications, Paul Misener, gave the keynote speech at Retail Week’s tech conference in London this week, telling the assembled retailers what they can learn from the ecommerce giant’s growth.
Misener, who has been with Amazon for over 15 years, spoke specifically about Amazon’s approach to innovation. The big takeaway was that to do new things you have to be willing to fail.
“It’s OK to be wrong, it’s OK to make mistakes — it’s OK to fail,” Misener said. “That’s the key part I want to communicate to you today is the importance of failure in any sort of innovation.
“At Amazon, we have a lot of experience with failure. We have failed many times — some very public, colossal ones, some private. But we are failing and we will continue to fail. Many times we will fail going forward, I’m confident of that.”
He cited Amazon.com Auctions — an early eBay competitor — and zShops — mini-shops for other retailers within the Amazon site — as examples of past failures. But he said the learnings from these experiments contributed to the success of Amazon Marketplace, which allows other people to sell over the website.
“It turns out now that fully half of the things sold on Amazon are not sold by Amazon but through other partners. It’s introduced a new class of customer for Amazon, the seller customer.
“It was this willingness to fail and trying to get things right eventually finally that led us to this very beneficial way of doing business,” Misener said.
The key to innovation is experimentation
The key to innovation is experimentation, Misener told the crowd. And to experiment, you have to fail.
“The whole idea is this: if you really want to be innovative, you have to experiment. If you know the outcome of what you’re going to do, it’s not an experiment. It’s more like a demonstration.”
Misener said too many people confuse real experiments with the type of you do in a school science class.
“Undoubtedly your teacher knew what the outcome was supposed to be and you probably knew what the outcome was supposed to be,” he said. “The reason? You weren’t doing an experiment, you were just rehashing an experiment that was done decades, maybe centuries ago. If you’re worried about the outcome being exactly what you hope it is, then you’re not experimenting.
“If you’re not willing to experiment you’ll never actually innovate and if you want to experiment you have to be able to fail — in fact you should try to fail so that it fails quietly, not loudly externally.”
Misener added: “This willingness to fail, it’s a big deal. I get that that’s hard to adopt because you’ve got all sorts of people — maybe your boss, maybe an investor, maybe the press — looking for failures. That’s not a very fun thing to go through. No one likes to fail. But if you accept that failure is necessary for innovation, it’s actually quite important and it becomes a lot easier to deal with.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.