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Failure is absolutely critical. I think it is not possible to innovate without failure. If innovation is the process of taking significant steps forward, steps past where you can't see for sure what the conclusion will be, you can't possibly not fail the bulk of the time.  There are many sayings that our society has for this, such as “If you're not falling down at least occasionally, you are not skiing fast enough.” Now the question is not whether you need to fail. You do need to fail a decent amount of the time, or you can't possibly be an innovator. The question is: Does our culture as a society, and does your culture at your particular company reward you for taking good risks? Stupid risks, you should be punished for. It is whether you took a good risk, not whether you succeeded or failed, that matters. Because you can't know the outcome ahead of time. If you are going to be punished for failing, then you're just not going to try new methods and test hypotheticals.

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Failure is not only okay. A) You learn a lot from it, and B) it's a healthy way to start winning. You move on, you change. I think the other reason you have to be comfortable with failure if you want to innovate is because the laws of large numbers work for everybody, including me and you. If you try to do something that's never been done before, the most likely outcome will be failure. And if you actually want to succeed, the only way you're going to do it, again, based on the laws of large numbers -- you buy one lottery ticket, and you're probably not going to win. You really want to win? You better buy a lot of lottery tickets. You're going to lose most of the time. But every once in a while, if you buy a lot of tickets, and you have a lot of patience, you're going to win.

So failure is not only something from which we learn and from which we have the healthy opportunity to redirect our attention to fail or stop. It's also part of life. And I sadly think we spend too much time teaching kids how to not fail. In fact, by the time many of them are adults, their definition of success -- it's subtle, but their definition of success becomes avoiding failure. Success is lack of failure. And we have systems to teach you how to avoid failure. Textbooks tell you the right answer. Don't do this, do this. But they're only telling you the right answer as it exists in the method that's published.

The fact that that answer now exists, to me, is a stepping stone to what we go to next. But if you really grow up and become somebody who decides that success is the lack of failure, you become a person who is destined to do, at best, incremental change. And frankly, at the end of the day, I'd like to succeed. But if I don't succeed at the end of the day, I'd like to fail with a big splash or a big explosion or a big – I mean, at the end of the day, I would rather either succeed or fail than die the warm death of mediocrity in between. There is nothing exciting about that place in the middle. It may be safe, but it's not exciting.

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There is no success without failure. We had this incredible experience at Dell where, in our first eight years, we grew 80 percent per year, and in the six years after that, we grew 60 percent per year. If you take any number, mathematically, and you put it through that calculation, you get to tens of billions of dollars at the end, which is what happened. But if you look closely during that period, it was filled with failures and rapid learning. You could look at that say, "Well, gee, could you have avoided those failures?" Well, there really wasn't a playbook.

If you had taken the IBM playbook or the playbook from the world's best companies, you really couldn't have avoided all those problems because the variables in the industry were changing so quickly there's no way you could have sort of known all of the things you'd need to go do to create this new thing we were creating. And so you, by definition, had to be able to experiment, take risks, learn quickly, fail, succeed, make changes, adjust, keep going.

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Well, I was involved in the biggest failure in the history of business. AOL acquired Time Warner. I was asked that at some MBA forum, and someone said, "You've been so successful here, here and here. Have you ever failed?" And I said, "Yes." And many times, the first best answer isn't the best answer. And I'm involved with a young company that is the fastest-growing company ever. It's called Groupon. And Groupon essentially was started as a company called The Point. The Point had this higher calling: Let's build databases of young people, young families, who want to be activists, who really care about a subject matter. We'll bring them information and we'll collect electronic signatures. And there was this implicit concept-level boycott. If a company was doing something that the populace didn't want, there was a concept of a boycott.

It was a wonderful idea, executed well, but it had no business around it. And the entrepreneur said, "This business isn't working. I'm sorry," and failed, and then said, "But I do have this little twist on that idea from boycott to buycott, and would it be possible to support your neighborhood small business and bring great deals and values to these activist people who want to support their local business?" And that's how Groupon was born.

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If you don't fail I don't think you have any really great chance of any enduring success. There are a number of people who had wonderful one-time phenomenal hits and I admire them and I take my imaginary hat off to them. The real issue is, can you repeat it consistently? And how – if you don't fail how do you know whether or not what you thought of was a brilliant success or just an anomaly, the right place at the right time at that moment, and that's where your creativity stops. Failure teaches you what you overlooked, where you missed. And the ultimate question is, Are you trying to compete against the world or yourself? And to me the proper thing is not to look at others in awe or in any way have envy leak into your consciousness but rather to say, "How can I become better from my failures? How can I be more thorough, more detailed, and more elegant in integrating my solutions in the future?"

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Failure has to be OK. This is essentially a creative business, and the nature of that beast is you can't ever bat a thousand; it just doesn't happen. And failure [here] is like in any other part of life; failures help you really learn what works and what doesn't work. You know, there are all sorts of seminars on creativity, and people teach courses on creativity -- and I wish I could tell you that here are the five rules to tell whether something's creative or not. It just never works. The real creative ideas are those that you know when you see.

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Failure is really okay. And I was giving a talk in Mumbai some weeks ago at NASSCOM, which is the business process outsourcing conference in India that's held each year. And the big question that was being discussed was "Why, with all these really highly educated, highly intelligent Indians, who are returning to India from the U.S. -- Why doesn't India create something like Facebook or Twitter or Google or Apple?" And I believe the basic reason is because Indian business culture doesn't give permission to fail.

Our society says, particularly in the high-tech world, "Failure's okay. Just pick yourself up and figure out what you learned, and dust yourself off, and go do it again." It's all part of the learning experience. You know, fail in Germany, your career is over. When I was in Silicon Valley, there were 250,000 expats from France. Why? Because France couldn't tolerate failure. And these people were highly educated, very skilled, very talented. And many of them were some of the superstars of Silicon Valley. They couldn't do it in their home country.

There are so many things wrong with our country today, and yet one of the great strengths -- and it may be the thing that pulls us out in the end -- is our ability to accept failure and to learn from it and to move on and try again.

[In entrepreneurship] I think you have to give yourself the permission to fail although you try your hardest to figure out what's the course of developing some product or service that will be of value to society.

I think there are some advantages if you come into an industry from outside. A lot of times people within an industry, when they look at something new to do and there's some new innovation or idea, they kind of know too much. They know all the reasons why it would fail.

Early on, me coming in to television from outside the industry, I was armed with this naïve confidence that I really didn't deserve to have, but I didn't know all the reasons why this wouldn't work. I think, largely, that's why people at the networks -- ABC, CBS, and NBC -- they were struggling just programming for primetime. Then for them to create an entire channel 24 hours a day where there was news, or sports, or documentaries just seemed too much, so they left it to a lot of the entrepreneurs to seize those opportunities.

Those are big lessons that I take forward. When I look at the tablet platform, if we don't create a science channel version for the tablet platform, I'm convinced that somebody else will. The lesson we've learned is to carefully define your business.

Early on, I had meetings with some of the broadcasters, and they defined themselves as broadcasters. If they would've just stepped back and said, "We're in the business of providing content through television," then they would've seen cable as a new playground for their content. They would've created a Discovery Channel, Sports Network, movie services and all of those. I'm glad they didn't, but they left it to other people who were thinking about that in a new way.

Innovation from within an industry is tough. As an organization gets larger and larger, it's more difficult to innovate. When you're a small team, you can dream big. The smart people who started Google, early on they were just dreaming big and asking, "Why couldn't we do this?" They've created a massive company based on these simple questions and probing questions, "How can we help enable people to more effectively utilize this abundance of knowledge on the Internet on all these topics?"

Creativity and innovation are at the heart of being an entrepreneur, but it's tough stuff. A lot of entrepreneurs try to solve a problem that consumers aren't asking about. They spend a lot of time inventing a widget, and there's no demand for that particular widget. They may be passionate for it.

In some way, you've got to have common interest. If you're going to be successful as an entrepreneur, you have to be solving a problem that people want solved. That's part of the puzzle as well.