I recently came across a video of a famous person saying, “Don’t be afraid of failure”. The comments were full of people feeling inspired—from those who started by making their bed to others planning to revive abandoned dreams. There are countless videos and articles praising failure. It seems like every every celebrities talks about it at some point. But what exactly do they mean by “failure”? The vague definition makes it hard to know how seriously to take their advices.
If You Can’t Recover, It’s Failure
Think about moments in your life you’ve considered failures. There are quite a lot of them. Maybe you mistook salt for sugar while cooking, failed to hit your diet goals, or watched a stock you believed in lose half its value. However, I define failure as “reaching a state where recovery is impossible.”
Here’s an example: think about an entrepreneur who invested all their resources into a business that ultimately had to shut down, leaving them unable to recover. To me, that is failure. Unfortunately, it’s a story we hear quite often these days. If failure means reaching a state where recovery is impossible, then I believe it’s something we must actively avoid.
, the creator of TDD (Test-Driven Development), provided a clear explanation of risk management and the cost of failure in his article “Game Over Absorbs Future Winnings”. Imagine a coin flip game where win $1,000 if it’s heads, and lose $950 if it’s tails. The more capital you have, the more rounds you can play, which increases the game’s value. But if you lose all your money once, the game’s over. The cost of game over—or failure—is enormous.A failure you can’t recover from doesn’t just rob you of short-term gains; it takes away your future potential. When your sustainability drops, it’s like being a baseball player stepping up to the plate with two outs in the bottom of the ninth inning, where the entire game depends on your swing. Your only option is to swing for the fences and try to score no matter what. This do-or-die mentality can make people reckless, often driving themselves and others to undesirable outcomes. That’s how dangerous failure can be.
It’s Not Failure, It’s Leverage
This raises a question: Why do celebrities tell us not to fear failure? Is it because they have deep pockets? Are they trying to lead us astray? Many thoughts come to mind.
But here’s an interesting point: What celebrities call “failure” often isn’t failure at all. I believe the correct term is “leverage”.
Leverage is a way to make bigger moves using fewer resources. Simply saying, it’s like making an investment with borrowed funds to amplify potential gains. It comes with risks, of course. But as debt can be an asset, if a turnaround is possible, it can be seen as an investment.
If we label every setback as failure, we’d all be living failed lives. But if we reframe it as leverage, we can learn from these experiences and find better paths forward. Of course, it’s crucial to manage the potential downsides of leverage and maintain a minimum sustainable capital.
A Matter of Perspective
It can be enlightening to think about what you’d want written on your tombstone. Wouldn’t “Lived a life of active leverage” bring a wry smile more than “Lived a failed life”?
Avoiding catastrophic failure is always important. However, even a small shift in how we perceive setbacks can create a completely different outcome in life.
So, how do you see it? Is it failure, or is it leverage?