Fail Fast, Fail Cheap: Why Smart Founders and VCs Think Like Scientists

When I started my entrepreneurial journey as a young and inexperienced student, one of the first pieces of advice I received was: "fail fast and fail cheap." At the time, I remember thinking—why would anyone aim to fail at all?

Years later—after co-founding startups, coaching hundreds of founders, and working inside a venture capital firm—I’ve come to appreciate just how wise (and misunderstood) that advice really is.

In this post, I’ll break down what “fail fast, fail cheap” actually means in startup life, why it matters more than ever, and how both early-stage founders and VCs treat ideas like experiments. Whether you're building your first business or evaluating investments, this mindset can help you make smarter, faster decisions.

Fail Fast: Why Testing Beats Guessing

Failing fast doesn’t mean giving up—it means learning quickly. In early-stage startups, every bold idea is just a hypothesis until it’s tested in the real world. Rather than spending six months perfecting a product no one asked for, smart founders run quick and dirty experiments to validate demand.

One of the best examples of this approach? LinkedIn.

While known for its professional networking roots, LinkedIn has quietly become one of the most experimental platforms in the social media space—constantly testing features to boost engagement and content sharing. LinkedIn didn’t become a content hub overnight. Instead, the team:

• Tested user-generated content formats like LinkedIn Pulse and newsletter tools to validate whether professionals wanted to create and consume thought leadership on the platform.

  
  

• Ran ongoing A/B tests on features such as profile badges, reaction types, post visibility algorithms, and even interface prompts like “celebrate a teammate” or “share a hiring update,” tweaking user behavior and interaction design along the way.

• Killed off features that didn’t work, like LinkedIn Stories—its attempt at ephemeral, Instagram-style video updates. Launched in 2020 and shut down in 2021, Stories failed to align with how users preferred to engage on a professional platform. It was a classic “fail fast” moment: LinkedIn tested a trending format, found the fit wasn’t right, and quickly moved on.

This cycle—test, learn, scale—is what helped Linkedin dominate professional communication space and reinvent the digital content experience. It wasn’t one big bet. It was dozens of small, fast, cheap ones.

Takeaway for founders: You don’t need a full-fledged product to get real feedback. A simple landing page, ad test, or Reddit poll can tell you more than weeks of guessing.

Fail Cheap: What Founders Can Learn from Venture Capital Strategy

Failing cheap is about placing small, calculated bets early—so you can double down on the winners later. It’s not just good startup advice—it’s the core of how venture capital works.

In the article Entrepreneurship as Experimentation, Harvard professors William Kerr, Ramana Nanda, and Matthew Rhodes-Kropf explain that VCs are essentially experimenters. They invest small amounts in many startups, watch which ones show promise, and cut their losses early on the rest. If a company proves its potential, that’s when VCs scale their support.

One firm that exemplifies this model is Khosla Ventures, one of the most respected VC firms globally. As founder Vinod Khosla puts it:

“Our willingness to fail gives us the ability and opportunity to succeed where others may fear to tread.”

Khosla Ventures made a bold early bet on Impossible Foods, back when plant-based meat was still a fringe idea. But they also funded Secret, an anonymous social app that went viral in 2014—only to shut down a year later due to content issues and poor retention. Khosla didn’t continue funding Secret after early rounds. That was the whole point: test a hypothesis, learn fast, and walk away when it doesn’t hold up.

This strategy pays off. According to the article, 75% of startups backed by VCs fail—but the remaining 25% can generate a 364% return on investment, even after losses are factored in. That’s the power of failing fast and cheap: minimize the downside, and free up resources to pursue the next breakout.

How to Run Your Own Quick & Cheap Startup Experiments

If you're a founder trying to validate a new business idea, here are three low-cost, high-learn experiments you can run this week:

✅ 1. Test Before You Build

Before spending weeks (or dollars) building anything, launch a basic landing page using Carrd, Webflow, or Bubble. Clearly explain your offer, add a call to action (like “Join Waitlist”), and share it with potential users through Reddit, LinkedIn, or relevant communities. If no one signs up, that’s a valuable signal—either the idea needs refinement or the way you’re pitching it does.

💸 2. Run Paid Micro-Campaigns

Invest $50–$100 in Facebook, TikTok, or Reddit ads to test multiple versions of your messaging. Try different headlines, benefits, or user personas. Don’t obsess over likes—watch for click-throughs, signups, and how long users stay on your site. You’ll learn what resonates before you’ve built a thing.

🧪 3. Prototype with ChatGPT or Figma

You don’t need a developer to bring your idea to life. Use ChatGPT to write flows, content, or FAQs, and Figma to design a basic mockup. Show it to 5–10 people (ideally outside your friend group), and ask open-ended questions like: “What do you think this does?” and “Would you pay for this?” This will uncover usability issues and help clarify your value proposition.

Final Thoughts: Failing is Part of the Formula

The advice to “fail fast and fail cheap” isn’t about embracing failure for its own sake. It’s about using failure as a tool for learning. In a world where speed, clarity, and adaptability are everything, the founders—and investors—who treat each decision like an experiment are the ones who go the distance.

So don’t aim for perfection. Aim to learn. Because every test, no matter the outcome, moves you closer to something that works.