I got asked the other day by and Investor what the ‘Cost Of Failure’ was. I didn’t know the answer at the meeting let alone it’s true meaning. I do now.
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Cost of failure isn’t – amount of capital required
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Cost of failure doesn’t – include overheads
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Cost of failure can – save you severe financial loses
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Cost of failure is – the best way to improve your plans
The costs of failure is the amount of money required to do a bare bones minimum, bootstrap style launch, to prove your concept. It should only include simple costs of making your service or widget. Maybe your widget only needs to be 80% of your desired end product? It doesn’t need to be perfect, it needs to represent your concept in order to prove it. Then fully fund, then launch. Or… have the wisdom to move on.
The first version of Microsoft Windows is worlds apart from Windows
Vista. Think 2.0