Fail Frequently, But Do It Right, Expedia Chief Says

Nobody likes to fail, and perhaps the only thing more annoying than failure is the throng of talking heads who go on about how good failure is for your character. 

Dara Khosrowshahi is not a name often associated with failure, but the chief executive officer of Expedia Inc. knows a thing or two about it.

“Failure sucks,” Khosrowshahi said in a keynote address at The Beat Live, a business travel conference hosted by the Business Travel News group in Chicago. 

But failure is inevitable. “The pace of innovation is exponential,” he said, “and it’s now starting to hit the top of the curve. It’s increasingly difficult to keep pace.”

Pundits often advise to “fail a lot and fail fast,” Khosrowshahi said, but that is a tricky proposition. “Failure on the big stuff is the fastest way to bankruptcy.”

The key is learning to manage your failures. “We fail fast, and a lot, but small,” Khosrowshahi said. “Small bets mean a lot of bets, so every day you’re getting a little better.” 

Those failures in innovation shouldn’t be confined to consumer-facing development but should apply to the enterprise as well, he said. And don’t neglect the small failures made by competitors. 

How small is small? Khosrowshahi turns the question inside out: An innovation that increases conversion by 7% would be “enormous,” he said. “Perfect” is the enemy of innovation, he said. 

Khosrowshahi let the audience in on one of his secrets to success in innovation: “The best engineers are the cheaters,” he said.

If a feature of a new experiment is giving the team trouble, “we’ll build a user interface and then tell the user it’s broken,” he said. “But we can see how many people will click on it.”