Five ways technology has made it easier for us to fail

There's no doubt that digital technology helps businesses to achieve success more quickly than ever before. From launching a crowdfunding project to designing a website, the online environment is full of opportunities for time-poor entrepreneurs. But is there a flip-side? Has technology also made it easier for start-ups to fail?

If you’re an entrepreneur eager to get a venture off the ground, you’ll probably lean heavily on digital technologies. As serial entrepreneur, investor and chairman of the Centre for Entrepreneurs Luke Johnson says: "Starting a business is easier, quicker and cheaper than ever thanks to new technology".

But digital’s prized offerings of speed, connectivity, precision and cost-savings are not without their problems. Add to this the ease – and, on occasion, the lack of planning – with which new ventures are set up, and you have a potentially troublesome combination. 

Image credit:

More concerning still is the fact that, once problems do set in, they too can gather momentum remarkably quickly. This, however, is not without its merits in the 'fail fast' culture, where the speed with which a company nosedives is a source of admiration.

Broadly, there are two ways in which technology may be helping us to fail faster.

  • Because technology speeds everything up, businesses that would have failed without it will still fail, but more quickly.
  • Technology introduces new ways for start-ups to flounder, which increases the chances of them failing. 

There are many routes to failure introduced by technology, including:

1. Faster growth

Thanks to online technologies, you can start building a loyal client base in a matter of hours. The internet also makes it easy to publish and update content – via blogs, for example. But growth brings disadvantages too. While an online business can grow more rapidly than one constrained by physical space, getting too big too soon is a common cause of start-up failure. 

2. Greater connectivity

The online world offers huge potential for collaboration. Crowdfunding is now a mainstream alternative to bank lending.

Nicola Horlick, who runs crowdfunding platform Money&Co, describes it as "cutting out the middle man and allowing small businesses to get the funding they need".

Granted, crowdfunding is another great example of businesses’ ability to connect with individuals. But from Triggertrap to the Zano drone, reports of funding flops are everywhere.

The evidence does not, however, seem to suggest an upsurge in project failures due to crowdfunding. An independent analysis by the University of Pennsylvania found that nine per cent of Kickstarter projects fail to deliver rewards. Interestingly, around 73 per cent of those who backed a failed project said they would back another Kickstarter project.

Read: 10 unknown advantages of business failure and rejection

Once your new venture is up and running, social media is one of the most cost-effective ways to gain exposure and win business. Pernille Bruun-Jensen, former managing director of accounting software developer Intuit, says: "For us, digital is also about allowing our customers to talk among themselves. Our live community use it like a chatroom, with users helping other users out. They really connect."

But, while brands are increasingly consumer-driven, this ability to connect does have its downside. Customers connecting means that negative comments spread rapidly. With bad customer reviews and complaints often posted on social media, bad news really can travel quickly, taking reputations down with it.

3. Precision

From keywords to social media, the internet has revolutionised business through targeted advertising – or the ability to drive certain customers to a particular advert.

There are even sophisticated analysis tools to help businesses gain insight into their customers and what they want. The main potential drawback is the cost. Competing for popular keywords can be expensive.

4. Manageability of data

Cloud computing means users can store data online. Many customer relationship management (CRM) software packages are now cloud-based, allowing businesses to gather and store vast amounts of information such as customer insights, sales forecasts and workflow management data.

Valuable data, however, attracts fraudsters. Businesses must be prepared to invest in the latest security systems to protect themselves.

Read: How much failure is just enough to trigger success?

5. Lower costs

Using conference calls to avoid travel costs, outsourcing to workers in other locations and time zones, and retailing online are all ways that technology can reduce overheads. But remote working and mobile technologies bring with them the risk of a lack of management control, and may introduce difficulties around customer service, loyalty and trust.

Clearly, there are many opportunities for businesses to exploit the wealth of current technologies, and there are guaranteed to be plenty more ahead. The Internet of Things (IoT) is one such exciting development. Already well underway, it’s creating a world where everyday objects are internet-enabled, to share data, with benefits for consumers and product owners alike it’s an area ripe for entrepreneurial input, even if there are a few business fails along the way.

This is a guest blog and may not represent the views of Please see for more details. Thumbnail from gettyimages.


Our Companies

Quick Links