Analysis
Panos Panay, Amazon's SVP overseeing Devices, Alexa and Leo, told founders at TechCrunch Disrupt in San Francisco that failure is a necessary part of building anything worth building, pointing to Microsoft's Surface RT -- a failure during his tenure there that led to a write-down of nearly $1 billion -- as his clearest example, according to TechCrunch.
Extract The Lesson, Don't Just Admit The Failure
Panay, who spent more than 19 years at Microsoft before joining Amazon, said the real test of a failure isn't whether you admit it happened -- it's whether you extract what went wrong and change course. Surface RT, Microsoft's first tablet, failed in large part because of decisions made roughly two years before launch: incomplete software, inventory problems and a flawed retail strategy. "If you haven't failed, you probably haven't pushed the boundary," Panay said. Surface has since become a durable product line for Microsoft, which Panay offered as proof that a failure of that size doesn't have to be fatal to a product category.
His framing matters more now because of where he sits: running devices and Alexa at Amazon, a business competing directly with Google's Assistant and Gemini and Apple's Siri for the voice-and-device layer of consumer AI, at a moment when all three companies are racing to rebuild their assistants around newer models. Panay's point that founders usually quit "30 degrees" off course rather than "180 degrees" wrong is a specific diligence signal, not a platitude: it suggests the fix is more often a narrow correction -- a different retail channel, a different inventory plan, a different launch sequence -- than a full pivot.
The limitation in applying a Microsoft-scale lesson to startups is one Panay didn't address: Microsoft could absorb a $1 billion write-down and keep funding Surface for another decade because it had the balance sheet to do so. Most founders don't get that runway, and a 30-degree correction at a venture-backed startup with six months of cash left can still be fatal even if the underlying instinct is right. Panay's advice is sound for operators inside large, well-capitalized companies; it's a harder prescription for a Series A startup deciding whether to keep pushing through a bad set of metrics.