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The Pivot: Why failure equals success in Silicon Valley

Why does the high-tech start-up culture from Palo Alto to San Francisco so embrace the concept of failure? It's all in the lexicon. That's what I learned during my visit StartX, AOL's high-tech incubator in Palo Alto.

Business advice to live by posted on the wall at the Palo Alto headquarters of the mobile app start-up, Flipboard.

One of my favorite things about Silicon Valley, and the tech start-up culture that emanates from there, is the idea that failure is good.

There’s a certain joie de vivre shared by everyone from entrepreneurs to their millionaire investors that a total bomb of an idea can lead to a magnificent success. In fact, they embrace it.

Perhaps it’s because many entrepreneurs are spending other peoples’ money, and thusly don’t feel so bad when it all goes up in smoke. Or perhaps it’s because some of the best ideas in tech today have come from those that weren’t so good. (Remember, Apple's first tablet devices was called the Newton.)

There’s a word used to describe this get-over-it mentality that I heard over and over on my trip through Silicon Valley and San Francisco this week: “Pivot.”

I first heard it used in context during a stop-over at StartX, an incubator on AOL’s Palo Alto campus that provides space and services – from legal to governance to VC funding - for early stage start-ups hatched by Stanford students.

 “About 90 percent of the people come here with the idea already picked,” says Adriano Farano, the Entrepreneur in Residence at StartX, as he explains the rigorous process for getting accepted into the program. “Almost all go on to become companies," he adds.

But those companies don’t always end up how they start out: “Down the road you may need to pivot,” he says. “It happens about 20 percent of the time.”

“Pivot?” I replied. Does that mean to scratch your bad idea and start over?

Farano flashed his friendly smile in agreement.

Farano, an energenic and business-savvy entrepreneur from Italy, is well known at StartX’s cafeteria-style office space. In addition to being the Entrepreneur in Residence, he also occupies a seat at one of the communal tables shared by the 15 other startup teams currently developing projects here.

His latest company is in stealth mode so I can’t describe it, but I will tell you that it’s likely he’s not going to have to pivot on this one. Not that that's a bad thing.

About the author

Matt Berger is the former Digital Director at Marketplace.

Business advice to live by posted on the wall at the Palo Alto headquarters of the mobile app start-up, Flipboard.

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