How Failure Boundaries Fuel Innovation: Lessons from Launching a Business in Tough Times
In 2009, I launched a business in a recession. Here’s what it taught me about failure, boundaries, and bold ideas.
When people talk about innovation, they usually focus on the big ideas: the disruptive product, the viral campaign, the breakout strategy no one saw coming.
What we talk about less is the container those ideas live in—the boundaries that make bold experimentation possible in the first place.
I call these failure boundaries.
They are the outer edges of what’s fair game to question, tweak, or even outright break. When teams know where those lines are—around compliance, safety, ethics, brand, or budget—they can stop burning energy worrying about “Is this okay?” and start using that energy to solve real problems creatively.
A clear failure boundary doesn’t just permit risk; it actively invites it.
It says:
Try it.
Learn.
We’ve got your back.
In 2009, I had to learn this the hard way.
Starting a Business in the Worst Possible Moment
In 2009, I founded Avenue M Group, a research and consulting firm dedicated to helping professional and trade associations grow membership, increase engagement, and make better decisions.
It was, by most conventional standards, a terrible time to start anything.
The United States was in the middle of the most severe economic downturn since the Great Depression. The recession had technically started in late 2007 and would be declared “over” by mid-2009, but its impact lingered much longer. Unemployment peaked at 10 percent. Credit dried up. Many industries went into survival mode.
Associations were hit hard.
Budgets were slashed.
Travel was restricted.
Membership and conference attendance declined.
Ironically, even as associations were struggling, their need for insight had never been greater. They needed to understand what members valued, what they were worried about, and what would actually motivate them to stay and engage.
But the money for robust research and consulting support? That line item was often the first to go.
If I wanted to build a client base and stay in business, standing still was not an option. I had to experiment—quickly and often—with how I priced, packaged, and delivered our services.
That is where failure boundaries became not just a concept, but a survival strategy.
The “Ten Terrible Ideas” Practice
Out of that pressure came one of the most unexpectedly powerful practices I have ever used: something I called “Ten Terrible Ideas.”
Once a month, I sat down with a simple challenge:
Write down ten of the worst, most extreme ideas you can think of for attracting new clients.
No censoring.
No editing.
No worrying about feasibility.
Just ten “awful” ideas on paper.
Then came the second step—the one that made all the difference.
For each terrible idea, I forced myself to flip it into something I could actually test in the real world.
One of those terrible ideas was:
Give our research away for free.
On its face, that was a nonstarter. I had bills to pay, a business to grow, and real constraints around what we could sustainably offer. But when I flipped it, I landed on something intriguing:
What if we offered two surveys for the price of one?
A membership study and a post-conference evaluation, bundled together.
For clients, this felt like an incredible value at a time when they were under enormous pressure to cut costs. For us, it created an entry point into relationships with organizations we might not have reached otherwise.
Did it solve everything? Of course not. But it did three important things:
It brought in new clients during a brutal economic climate.
It gave us meaningful data and stories to build our credibility.
It reinforced a mindset: within our boundaries, we could try bold things.
The Power of Bounded Psychological Safety
Looking back, that period was a masterclass in a concept I now call bounded psychological safety.
Psychological safety, at its core, is the belief that you can take interpersonal risks—like speaking up, asking naïve questions, or proposing unconventional ideas—without fear of humiliation or punishment.
Bounded psychological safety goes one step further. It says:
You are safe to experiment within clear, well-defined boundaries.
For me, in 2009, those boundaries looked like this:
We could experiment with pricing and packaging, but not at the expense of paying our team or devaluing the integrity of our work.
We could test unconventional offers, but not misrepresent outcomes or make promises we could not keep.
We could be creative with delivery models, but not ignore what clients truly needed.
Inside those boundaries, there was a lot of room to play.
I was not trying to scale fast or chase vanity metrics. I was trying to solve meaningful problems for clients in a way that was sustainable for the business.
That focus, combined with the constraints of the recession, created a surprising sense of clarity. With fewer distractions and lower external expectations, I could prioritize what mattered most:
Are we creating real value?
Are we learning from each experiment?
Are we moving, even a little, in the right direction?
You Are Not Alone in Turbulent Times
My story is just one example. Some of today’s most recognizable brands—Airbnb, Uber, Slack, Square—were also born in or around that turbulent period. They were not operating with perfect conditions, endless capital, or guaranteed market demand.
What they had was:
A sharp understanding of a problem that mattered
Constraints that forced focus
Enough freedom to try, fail, adjust, and try again
Your organization may not be a Silicon Valley startup, and you may not be launching a company in the middle of a global recession. But the underlying pattern is the same:
Clarity plus constraint can be the fuel for bold innovation.
How to Use Failure Boundaries with Your Team
If you want your team to take smarter risks—especially in uncertain times—you do not need to tell them to “be more innovative.”
You need to:
Define the hard lines.
What is non-negotiable? Compliance rules, safety standards, ethical guidelines, financial limits, brand commitments—make these explicit.Name the playground.
Within those boundaries, what is fair game to experiment with? Pricing? Formats? Messaging? Service levels? Processes?Normalize learning out loud.
Encourage people to talk openly about experiments that did not go as planned. Not as failures to hide, but as data to build on.Model the behavior.
When leaders share their own “Ten Terrible Ideas” and the experiments that came from them, they send a powerful signal: This is not just lip service. This is how we work.
A Question for You
In 2009, I survived—and eventually grew—by leaning into constraints, experimenting within clear failure boundaries, and giving myself permission to learn out loud.
You may be facing a different set of pressures today: economic uncertainty, shifting member expectations, new competitors, or disruptive technology.
The question is not whether you can avoid risk.
The question is whether you will let undefined risk paralyze your team—
or use clear failure boundaries to unlock bolder, smarter experimentation.
So I will leave you with this:
What boundaries would you need to define for your team so they can stop tiptoeing and start taking more meaningful shots?
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