What do Coca-Cola (NYSE:KO), Intuit (NASDAQ:INTU), General Electric (NYSE:GE), and JetBlue (NASDAQ:JBLU) all have in common?

They've all had multimillion-dollar failures. (New Coke, anyone?)

Failure is an option?
BusinessWeek profiled many of these gaffes in its July 10 issue, and then interviewed a few of the CEOs who had been on the business end of the failures. Current GE CEO Jeff Immelt was one of them. He helped launch a failed plastic cover for countertops in 1992. Does he regret the decision? Probably, but not as much as you might think. As he told BusinessWeek, "If you try something and it fails, but you went about it the right way and you learned from it, that's not a bad thing."

OK, but are failures bad for investors? You'd think so. Consider Segway's recent recall of 23,500 scooters due to a heightened risk of injury to riders. How many venture capitalists do you think were thrilled with that turn of events?

Yes, it is
Nevertheless, Immelt is right; every corporation fails in some regard. And growth investors who buy in early to companies with commanding visions for the future expose themselves, and their portfolios, to heaping portions of failure. That's the risk that comes with world-changing stocks.

But failure itself isn't the issue in growth investing. It's the size and scope of failure that matters. Go back to Segway. Failing to understand basic human safety in a two-wheeled geek cart isn't a smart gaffe. Rather, it suggests that the research and development squad at Segway wasn't as thorough as it needed to be before releasing the scooter to market.

On the other hand, world-changers that commit major R&D dollars to experimenting intelligently can make for wonderful long-term investments. Consider Oracle (NASDAQ:ORCL). Roughly a decade ago, CEO Larry Ellison commissioned a project he called the Network Computer. It was supposed to be a replacement for desktop PCs; everything would be run via servers and databases made available over the Internet.

Today, of course, the so-called NC is nowhere to be found. But it's difficult to call Ellison's idea a complete bust. After all, Web 2.0 applications rely heavily on Web connectivity and databases. And both Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) are vying to bring classic productivity applications to the Web.

The fact that Oracle is now well-positioned to cater to the hordes of Linux servers used to support Web 2.0 applications (Oracle holds roughly 80% of the Linux database market) is at least partially attributable to its earlier failure in networked computing.

Best of all, the stock has pounded the return of the S&P 500 (160% vs. 38%) since the NC publicly embarrassed Ellison by faltering on him on stage at Oracle OpenWorld in September of 1997.

Give in to the geeks
How is that possible? Oracle didn't stop R&D in other areas as it was rolling out the NC. Consequently, database sales continued to grow, which, in turn, provided the cash flow needed to acquire growth later. No wonder the database king still devotes 12.8% of revenue to research and development.

Real innovators always want to have the labs stocked with potential breakthroughs. Consider Headwaters. Though I'm not as bullish on this stock over the short term as Motley Fool Rule Breakers captain David Gardner, I'm very enthused about the long term for this coal recycler, thanks to its active R&D pipeline.

Headwaters has joint ventures exploring profit-making options in ethanol and hydrogen peroxide, for example, and even nanotech is on the table. If any of these efforts pay off the way its earlier work in coal waste did, the stock could be a bargain at today's prices.

The Foolish bottom line
The lesson? Failure matters only if you're invested in a one-trick pony that won't spend real money on R&D. That's why, in Rule Breakers, we're always more likely to invest in a stock like Headwaters than we would a hype machine like Segway.

If that sounds like an approach you're interested in, click here to try the service free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers only breaks the rules in his portfolio. Wimp. Tim owns shares of Oracle. Get the skinny on all of Tim's stock holdings by checking his Fool profile. Coca-Cola, Intuit, and Microsoft are all Inside Value picks. JetBlue is a Stock Advisor selection. Headwaters is a Motley Fool Rule Breakers recommendation. The Motley Fool's disclosure policy is a multibagger in the making.