SAN FRANCISCO — For startup founders navigating the high-stakes world of consumer technology, setbacks and missteps can often feel like existential threats. But according to Amazon executive Panos Panay, failure is not merely a possibility to be feared; it is an inevitable and required ingredient in building a truly successful product.
Panay, Amazon’s senior vice president of Devices, Alexa, and Leo, shared this perspective during a keynote appearance at TechCrunch Disrupt in San Francisco. Drawing on a career spanning more than 19 years at Microsoft—where he oversaw the development of numerous high-profile hardware and software ecosystems—Panay reflected candidly on the nature of professional setbacks, the reality of high-cost commercial failures, and the vital process of learning from past mistakes.
Addressing an audience of entrepreneurs, developers, and investors, Panay emphasized that striving for flawlessness often prevents innovation rather than protecting it. True progress, he argued, requires stepping into unknown territory where miscalculations are bound to happen.
“You have to be willing to fail, and actually, not just willing, you actually have to go fail,” Panay told the audience onstage. “If you haven’t failed, you probably haven’t pushed the boundary. It’s literally about harvesting the lessons learned when you fail. You have to be willing to face it, and as you face it, learn from it.”
The Amazon executive noted that founders and product leaders can recover from virtually any setback, even those of a catastrophic scale, provided they possess the self-awareness to analyze what went wrong without hiding behind excuses. To illustrate his point, Panay looked back on one of the most high-profile missteps of his tenure at Microsoft: the launch of the Surface RT.
Introduced as Microsoft’s bold entry into the tablet market, the Surface RT ultimately struggled to capture market share, resulting in a staggering nearly $1 billion write-down for the company. The public fallout was immediate and difficult to ignore.
“I remember being on the front cover of a newspaper, and it just said failure,” Panay recalled. “लेकिन, यहां बात यह है [but here is the thing], it was easy to admit failure. The trick was, and always is, did you harvest the learnings and understand what happened? All right. What did you learn? Because the failure wasn’t that moment. It was decisions that led up to it two years before that, whether the software wasn’t complete or the inventory was wrong or how we balanced into retail. There were all these steps along the way.”
Panay’s frank assessment underscored a central thesis of his leadership philosophy: a major product failure is rarely the result of a single isolated incident on launch day. Instead, it is typically the culmination of a chain of strategic choices, operational misalignments, and timing issues that accumulated long before the public ever laid eyes on the device. By breaking down those components honestly, builders can uncover the real root causes of their shortcomings.
According to Panay, acknowledging failure requires stripping away excuses and looking squarely at the operational realities of product development. Founders must cultivate an environment where teams can openly examine their missteps without fear of reprisal, transforming painful experiences into actionable institutional knowledge.
Yet, acknowledging failure and examining its roots is only part of the equation. Panay stressed that while founders must confront their mistakes head-on, they must never abandon the core conviction that inspired their enterprise in the first place.
“Here’s the other side of it,” he said, pointing to the delicate balance between flexibility and perseverance. “You want to succeed, yeah? You take that failure, but you don’t let go of your vision. That’s it. Surface has done pretty well. You don’t let go of your vision. You don’t break it.”
The evolution of Microsoft’s Surface hardware line stands as a testament to that philosophy. Despite the early commercial disaster of the RT iteration, the tech giant persisted with the product category, iterating on hardware designs, refining software integration, and eventually carving out a respected and profitable niche in the productivity device market.
Panay emphasized that staying committed to a long-term vision does not mean remaining rigid in the face of contrary evidence. On the contrary, he believes that true agility comes from learning quickly, adapting strategy, and maintaining forward momentum, even when unexpected obstacles alter the landscape.
“It goes back to the same fundamental, like, have you learned?” Panay said, elaborating on the cadence of product adaptation. “Were you learning along the way? Because if you were learning, then you just change your vector. Usually, it’s not 180 degrees. Usually, it’s just 30 degrees. Take your lessons learned, change a little bit, adapt your vision where it needs to be, and then go. I believe there’s people that hang on too long, but it’s because they haven’t accepted the moment of failure at all.”
By advocating for small, calculated adjustments rather than wholesale strategic abandonment, Panay offered startup founders a pragmatic framework for resilience. In his view, leaders who refuse to accept failure often become paralyzed, clinging stubbornly to failing strategies because they cannot bring themselves to admit that their initial assumptions were flawed. Conversely, those who embrace the reality of a misstep are free to make the necessary course corrections—shifting their vector by degrees rather than executing jarring, disruptive pivots—and continue pressing forward toward their ultimate goals.