Errors, mistakes, miscalculations, stuff-ups, failure are a necessary part of growth, not just in business, but more generally in life.
Without mistakes there is no learning. It’s the critical feedback loop that allows us to adjust our course of action.
Mistakes also allow us to not get stuck. We will never have all the required information to make the best decision — every major decision is most likely not going to be black or white, but grey. Many shades of grey which can cause paralysis.
Paralysis costs time — truly our only non-renewable resource.
The best way to proceed is to either take a small bet, or a number of small bets, and let the results dictate the next course of action. This is a far superior way to deal with uncertainty then taking a long term view — in this case bottom-up beats top-down.
Mistakes should be celebrated as long as they do not sink the ship, i.e. actions can be seen a call option.
Options increase value because they increase choices that will be available to us in the future.
Why do some companies such as mining exploration, Web 2.0 or biotech companies command multi-million or billion dollar valuations when they have never made a single cent in profit (and sometimes even revenue)?
That’s right… options! In other words, exposure to a massive upside.
Whether in business or life, don’t be afraid to make mistakes — they increase choices available in the future and means exposure to potentially very lucrative or profitable opportunities just like a biotech company.
One more thing… mistakes are essential for innovation but more on innovation in a future post.