Photo treatment: Oscar Ramos Orozco

How To Encourage Learning By Making "Smart Mistakes"

We’ve written here before that you can learn a lot from your mistakes, but of course you shouldn’t seek out mistakes. Or, should you? In fact, there’s a class of mistakes that you can more than recover from – that you can use as tools to discover and test out new ideas. Let’s call them “smart mistakes.”

Merriam-Webster says a mistake is “a wrong action or statement proceeding from faulty judgment, inadequate knowledge, or inattention.”

Smart mistakes take aim at the “inadequate knowledge” that is at the root of many creative or innovative projects. Consider the scene pictured above.

If your objective is to cross the brook without getting wet, you would carefully plan your crossing, looking for a path along a series of stones, each within a step’s distance. But even then, could you guarantee you wouldn’t fall in? If this is your first crossing, you would certainly have inadequate knowledge. A stone could be wobbly, or the surface more slippery than it appears. You won’t know till you try the crossing.

Smart mistakes take aim at the “inadequate knowledge” that is at the root of many creative or innovative projects.

When we confront a new situation, there’s no way to guarantee immediate success.  You will take “wrong actions as a result of inadequate knowledge.” So what kind of steps can you take to ensure your mistakes are smart mistakes, rather than dumb ones?

1. Reduce the cost of failure.

For the river crossing, it could be asking your friend to go first (joking!). Or it could be removing your shoes and socks so that they’ll stay dry. In other words, choosing a course of action that allows a mistake to have minimal cost. So your budget – be it financial, time or otherwise – can last longer. In his book Little Bets: How Breakthrough Ideas Emerge from Small Discoveries, Peter Sims discusses how Pixar’s extensive storyboarding and Procter & Gamble’s rough prototyping processes allow them to gain important feedback early and cheaply.

2. Gain maximum learning from each attempt.

Rita Gunther McGrath and Ian MacMillan, in their classic Discovery-Driven Growth, emphasize the importance of documenting assumptions and taking steps to validate those along the way. They recommend creating experiments specifically designed to test out parts of a business plan – business model, market size, development estimates, competition, etc.

If you were crossing the brook, therefore, you would want to use many senses – sight, hearing, touch – to analyze the situation as you crossed. Are big rocks more stable than small ones? Does a rock move when you first step on it?

3. Order your steps properly.

Christian Terwiesch and Karl Ulrich, authors of the book, Innovation Tournaments, demonstrate that in creating a new product or service, the order of operations is crucial to success. Their great counterexample is Segway. Enamored by his technological vision for a self-balancing, easy-to-ride, 2-wheeled scooter, Segway inventor Dean Kamen invested in a full product design, supply chain and even lobbying efforts – before he had thoroughly studied the market or created product demos – relatively cheap and fast activities.

Kamen took the most expensive, most prolonged steps first. When he confidently sprung his product on the marketplace in December 2001, the hype was intense – and only after it died down did he begin to learn about the marketplace. Rather than fulfilling his VC’s prediction of reaching $1 billion in sales faster than any other company, Segway by the mid-2000’s had sold a total of 23,600 scooters – less than $118 million in retail revenue in four years. Segway was a high-profile and expensive failure. 


Don’t do what Segway did. Do as much work as possible on paper first. Do the cheapest steps that give you the most information (see above steps 1 and 2), and only armed with that information plunge into a long, expensive development process.

And one final type of smart mistake…

Can you imagine a situation in the brook crossing where you would walk in the water, avoiding the stones on purpose? This is a deliberate mistake, an intentional act that defies your internal sense of logic. Why would you do something like this?

Our feelings of what makes sense and what doesn’t are shaped by our deepest assumptions.  Those assumptions, for example that walking in dry shoes is more comfortable than in wet shoes, are mostly useful. But some aren’t valid, or have become obsolete over time.

Making what Paul Schoemaker, author of Brilliant Mistakes: Finding Success on the Far Side of Failure, calls “deliberate mistakes” is called for in this situation. In one example Schoemaker cites, AT&T Long Distance challenged its traditional credit-checking standards in a subset of accounts by eliminating credit-checking altogether. (Note that trying the change on a small sample reduced the cost of failure.) Did they think this made sense? No: they had every reason to believe that their long-trusted algorithms worked. But they had no other way of finding out whether their approach to credit-checking was still the best policy they could pursue.

AT&T learned that the increased profit from new customers far outweighed the increased bad debt they incurred by approving everybody regardless of credit rating. The “mistake” turned out to be the right approach.
What About You?
Smart mistakes aren’t blunders; they are well-considered actions that reveal new information or challenge our assumptions. They should be a key part of your creative toolkit. How do you enable smart mistakes in your work?
More insights on: Failure, Risk-Taking

John Caddell

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John Caddell is the author of “The Mistake Bank” and contributed to the most recent 99u book. His latest project is 3-Minute Journal. John also organizes the New Tech Meetup of Central PA. You can reach him at or @jmcaddell on Twitter.  
load comments (14)
  • Mayur

    Hi John,
    Nice perspectice and practical advise.
    There seems to be some typos in the last paragraph. Should perhaps read as below?

    AT&T learned that the additional profit they made  by approving everybody regardless of credit rating was far outweighed by the increased bad debt  from the new customers who were brought on board. The “mistake” turned out to be the right approach.

  • jmcaddell

    Hi, Mayur, thanks for your comment. I’ve read the sentence a few times, and certainly it could be worded better. AT&T’s additional revenue far exceeded any additional bad debt they incurred.

    regards, John

  • James


    Quite simply an amazing article and it came at a perfect time. So thank you. 

    I’ve been working on LifeSketch –  for the past four months (it was forming in my mind for a year prior to that) and I’ve definitely gone through some mistakes. They were well worth it though, I just wish your wrote this sooner. haha 
    I’m beginning to expand more and this article is most surely what I needed. I like the way you simplified, or categorized, the approaches to mistakes/possible actions to find a happy medium. This is surely gonna be one of my go to guides. 

    I’m done, I don’t want to chat your eyes off. So thank you again!

    I just figured I’d let you know your hard work is appreciated. 



  • Evgenia Grinblo

    Hi John,
    Thank you for this.
    I particularly liked the point about walking through the water instead of trying to navigate the pebbles. Sufficient knowledge is a tricky concept when it comes to newer industries like experience design and in the general context of innovation. Predictability is less attainable in this case and yet this seems to scare many. Your article is very timely and encouraging. 

  • jmcaddell

    Evgenia, thanks for your comment. I agree with you…there are lots of situations that are hard to predict, and where easing into them is the most expeditious way to proceed. As long as the downside, in risk, time or expense, is manageable, go for it!

    Regards, John

  • jmcaddell

    Evgenia ,note that comment above was intended to be a reply to you.

  • shammer53

    So much to learn from our mistakes (large- and not-so)…


  • Dharmendra Tirdia

    Very simple and insightful.

  • Manjeetjain


  • Shaun Boyce

    “AT&T learned that the increased profit from new customers far outweighed the increased bad debt they incurred by approving everybody regardless of credit rating. The “mistake” turned out to be the right approach.”

    Scary criticism and agreement I think, seeing that this is exactly the same situation that lead to the downfall of our nations (USA) housing market and credit rating. Approval of poor credit rating to simply gain short-term market shares will eventually led to unstable customer base and payment failure, bankruptcies etc. I agree completely with taking calculated risks in design, let’s keep the analogies in their respective places.

  • jmcaddell

    Shaun, you bring up an interesting point, but even though the situations both involve credit-worthiness, I think they are dramatically different. And that difference is central to the point of “deliberate mistakes.”

    – AT&T set up their project intelligently. They limited it to a small sample.

    – They measured carefully and only after seeing that the lower credit customers paid their bills did AT&T roll the program out more widely.

    – AT&T’s downside was limited. The long-distance business had a very low variable cost. Therefore, customers who didn’t pay their bill didn’t cost the company too much money. In addition, they could have stopped the program at any time (and even reversed it, cutting lower credit customers or requesting deposits for continued service).

    This is the template of a deliberate mistake. Now, to the credit crisis:

    – There was no controlled experimentation – instead, a massive, greedy group of people (including just about everyone, including homeowners, of which I am one) began to see homes as ever-appreciating assets to be exploited. Keeping up with the Joneses caused bankers, mortgage brokers, etc., to slide down the slippery slope to the point where completely uncreditworthy people were allowed to take no-money-down loans on unsuitable properties.

    – The only measurements involved how much money people were making, or how big their houses were.

    – The downside was virtually unlimited.

    The credit crisis was the opposite of a deliberate mistake. 99.9% of the people thought (felt/hoped) they were doing the right thing. If it didn’t work out, they had no fallback plan. That, in other words, was a disaster waiting to happen, and it did.

    Thanks for bringing up these points, Shaun.

  • Carissa

    Great article! We are encouraged to fail forward fast at The Effective Edge, ( We try things, quickly decide whether they are worth it or not, learn as much as we can and then make the decision to continue with the idea, or pull it. Thanks for the tips!

  • Jee Knew

    Helpful words are significant.

  • Sebs |

    Interesting…especially the last one. =)

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