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Too Big To Fail

9 Apr 2024

Another risk that comes with overfunding a new idea at a large company is that it becomes a must-win idea. It can’t fail.

Failure is an important part of innovation. Not all ideas are good ones. Ideas that aren’t winning need to die. The company needs to prune them so they can put energy into something else.

When you put a giant team on a nascent idea, you can’t let it fail. Sunk-cost thinking drives you to keep things going because you’ve already invested so much. Politically, the backers of the idea need it to keep going so they don’t have to admit failure. And if you’ve told partners, investors, and customers that this is the next big thing, the face-saving efforts become even more entrenched.

The project can’t be allowed to fail because so much is riding on it.

The possibility of failure is motivating. It drives a team to move fast, make tough decisions, and focus on the most important things. For a startup, knowing you might not make payroll next month is a crystalizing feeling. If a team knows that they have to earn the next month’s funding, they tend to figure out fast what is important.

If your big-company project has a very large team, it is too big to fail. And because it can’t fail, the team loses sight of what’s important. Scope creeps, the mission gets muddled, and timelines expand. And the business keeps supporting it because they just can’t let things fail.

And that causes the product to fail.

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