I can tell you how we failed with our first product. Bad design choices (that people would accept a large client download, that Mac wasn't that important) and a bad UI meant a bad user experience. Plus a lack of up front planning about why would users want to use us. Therefore the users never returned - the lack of momentum had a big negative effect on morale. Every day in the office was miserable then because we knew people weren't using/enjoying our product and we weren't growing.
We made a tough choice to abandon that first product and our new site is starting to rock and is heading in right direction. The positive momentum has such a big impact on morale and every day hearing a user say "I'm so glad I found this site" is best motivation to keep going through all startup challenges. So it comes back to momentum from users, and that comes back to good design and understanding what people want and why they would use your product.
just my $0.02
Personally, I want to hear stories about failure more than stories about success. Stories about success are boring and repetitive, because they usually revolve around some combination of luck and persistence. But the truly hard decisions in life come when you're spinning your wheels, and you need to determine when it's time to cut your losses.
so i guess, actually failure was very valuable. i actually see 3-4 much larger / better funded startups in our field who now are repeating the mistakes we made in our first product, but somehow I guess they won't be able to make that decision to change course.. easy when you're smaller and flexible.