Do entrepreneurs who "fail early" have a better chance of future success?

James Surowiecki has a terrific column on entrepreneurship in the New Yorker this month.   In the article, he asks why so many entrepreneurs continue to launch start-ups despite the low probability of success.   Here's one excerpt that I found interesting.  In this excerpt, Surowiecki questions whether an early failure leads the type of learning that can generate future success: 

There’s a widespread tendency to treat failure as a badge of honor: “Fail fast, fail often” is a familiar mantra in Silicon Valley. There’s now a regular FailCon, where people come to hear other entrepreneurs tell about the hard times they endured and about how starting a business and failing actually makes you more likely to succeed in the future. It’s a comforting message, but the evidence suggests that past failure really just predicts future failure. A 2009 study of venture-backed firms found that entrepreneurs who had failed in the past were not much more likely to succeed in new ventures than first-time entrepreneurs were—some eighty per cent of those who had failed before failed again. A later study of more than eight thousand German ventures came to an even grimmer conclusion: founders who had previously failed were more likely to fail than novices.

Can It Scale Quickly? Is it the Wrong Question for Many Startups?

Does your business model enable you to scale quickly?   That's the question facing many start-ups these days as they seek capital from investors.   The question proves most pertinent for tech start-ups, but it seems to be thrown at founders in many different kinds of companies these days.   Is there a danger to focusing on this question?   I would argue that founders and investors must be aware of two significant downsides.    First, focusing on scale, and trying to scale too quickly, can cause start-ups to lose sight of their target market.  Who precisely do they aim to serve, and who they do not plan to serve?    A strategy can become "all things for all people" very quickly as the scale question comes to dominate conversations.   Second, founders and investors often can underestimate the challenges associated with scaling quickly.    Sometimes, it makes sense to take a bit of time to get the business model right before trying to grow rapidly.   I find it very interesting that many investors proclaim the mantra of fast iteration and experimentation, yet they also push for scale at the same time.