Amazon executive Panos Panay delivered a clear and uncompromising message to startup founders and tech entrepreneurs gathered in San Francisco: failure is not just a possibility when building a successful product; it is an inevitable and required part of the journey.
Panay, who serves as Amazon’s senior vice president of Devices, Alexa, and Leo, shared these strategic insights and hard-earned wisdom onstage at the annual TechCrunch Disrupt conference. Drawing extensively from his expansive career, which included more than 19 years at Microsoft where he oversaw major hardware and software developments, Panay reflected on the psychological and operational hurdles that entrepreneurs must confront if they hope to innovate meaningfully in competitive global markets.
Throughout his time in the technology sector, Panay has witnessed both soaring product triumphs and catastrophic commercial stumbles. Rather than shying away from past missteps, the seasoned executive used his platform to encourage founders to lean into their failures, dissect what went wrong, and utilize those painful lessons to refine their long-term trajectories instead of abandoning their foundational ambitions.
"You have to be willing to fail, and actually, not just willing, you actually have to go fail," Panay told the attentive audience. "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 conversation provided a rare, candid look into the inner workings of product development at the highest levels of the consumer technology industry. For early-stage founders navigating the volatile landscape of venture backing, product-market fit, and rapid scaling, Panay’s perspective offers a pragmatic counterweight to the glossy, idealized success stories that routinely dominate industry headlines.
According to Panay, recovery is entirely possible from all sorts of business and product setbacks, even those that appear catastrophic in the moment. He grounded this assertion in his own professional history, explicitly recalling the high-profile launch of the Surface RT during his tenure at Microsoft. The product, which served as Microsoft’s entry into the burgeoning tablet computer market, faced severe market resistance, software limitations, and weak consumer demand, ultimately resulting in a staggering near-$1 billion write-down for the tech giant.
The fallout was immediate and highly public, putting immense pressure on the leadership team responsible for the device.
"I remember being on the front cover of a newspaper, and it just said failure," Panay recounted, acknowledging the heavy emotional and professional toll that such public scrutiny can bring. "But, here’s 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."
By breaking down the anatomy of a major corporate failure, Panay emphasized that product disasters rarely happen overnight. Instead, they are usually the culmination of a series of miscalculations, operational friction points, and strategic oversights that accumulate over years of development and execution. Founders, he argued, must possess the intellectual honesty to trace their steps backward, identify the root causes of their shortcomings, and resist the temptation to make excuses or shift blame elsewhere.
Accepting failure, however, is only the first step in a broader cycle of iteration. Panay noted that once a founder confronts the reality of a misstep without making excuses, the focus must shift immediately to extracting actionable data from the experience. This rigorous self-reflection allows engineering and product teams to pivot intelligently rather than abandoning their core mission out of frustration or fear.
"Here’s the other side of it," Panay explained, addressing how leaders must balance resilience with accountability. "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 trajectory of Microsoft’s Surface line serves as a prime example of this philosophy in practice. Despite the disastrous financial and critical reception of the initial Surface RT release, Microsoft did not abandon the hardware category entirely. Instead, the team reevaluated the market, listened closely to consumer and enterprise feedback, refined the hardware and operating system architecture, and steadily built the Surface brand into a respected, viable fixture in the personal computing market over subsequent generations.
Panay reiterated that staying committed to an overarching product vision is entirely compatible with acknowledging tactical failures. In his view, founders who embrace setbacks can adapt and make progress significantly faster, even as they inevitably encounter fresh obstacles along the way. The key is maintaining operational agility and a continuous learning mindset.
"It goes back to the same fundamental, like, have you learned?" Panay said. "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."
For the startup founders and tech leaders listening in San Francisco, Panay’s remarks provided both a cautionary tale and an encouraging mandate. In an industry obsessed with hyper-growth, instant validation, and flawless execution metrics, the Amazon executive’s insistence on the necessity of failure offers a grounding reminder that true innovation requires taking bold risks—and possessing the courage to weather the consequences when those risks do not initially pay off.
