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Rules for failing

Huang earned his master’s degree in electrical engineering from Stanford University in 1992. In 2011, he returned to his alma mater to deliver a lecture on the challenges and rewards of building a company.

Central to his discourse was the concept of failure.

“If you want to be successful, I would encourage you to grow a tolerance for failure,” he stated.

However, Huang clarified that he's not advocating for failure per se.

“If you fail often enough, you actually might become a failure — and that's different than being successful,” he explained. “So the question is, how do you teach someone how to fail, but fail quickly? And to change courses as soon as you know it's a dead end?”

The answer, according to Huang, is something called intellectual honesty. The approach is straightforward: “We assess on a continuous basis whether something makes sense or not. And if it's the wrong decision, let's change our mind.”

He contended that to create a company capable of inventing “amazing things that solves problems for the world that it sometimes didn't even know it had,” building a tolerance for risk-taking is crucial. At the same time, it’s also essential to “teach people how to fail but fail quickly and inexpensively.”

According to Huang, this mindset is vital because innovation is predicated on experimentation, which necessitates exploration, and exploration may lead to failure.

“Unless you have a tolerance for failure, you will never experiment and if you don't ever experiment, you will never innovate. If you don't innovate, you don't succeed,” he concluded.


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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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