At least that is what the writers of GigaOm say in their post about web infrastructure and getting funding for your startup. “Scientists run tens or hundreds of experiments that fail for every one that succeeds in revealing something new. The same is true for startups: if you are not failing, you are not innovating.”
It is now 2009, VC firms have tightened up their belts and are not funding as many startups as they did in the past. In a way VC firms are like gamblers in Las Vegas, placing their money in something that they have no way of knowing if there will be success. Since money is tight in our economy, the VC firms are moving from playing many hands at the $5 Blackjack Table and moving to the $25 Blackjack Table, placing bigger bets on more sure things.
Product creation doesn’t come without experimentation and experimentation doesn’t come without a cost. So to cut out some of the experimentation cost and make your Venture Funded money last longer, GigaOm suggest startups build off of what is already out there. Web platforms like Amazon Web Services, Google App Engine and Force.com, provide an infrastructure for web startups to build off of.
All of these platforms are infrastructure, but they are more than that for startups and investors: they are tools for risk reduction and experimentation. They are engines of innovation. In the new world these services create, startups using them have an enormous advantage over their competitors in their ability to experiment and adjust, and investors can get much less risk and much more exploration done with the same capital. Anyone building their own infrastructure will be seen as already failing. What many see as simply a mechanism to reduce costs is, in reality, something much more powerful. Fast, frequent failure is the most reliable path to success.
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