Twitter and Foursquare are two easy examples that come to mind for services that have failed very publicly. They get pretty bad press from people because of service outages. I myself have been on the receiving end too, but as someone who’s been in the application development side of the house, I know that these experiences are invaluable. There’s nothing like a few million users screaming at you, that’s for sure!
The thing is, teams are human and make mistakes. It’s easy for a team to fracture or start pointing fingers at each other; it’s much harder for the team to hold together, either collectively or with the help of a good manager. And once you’ve been through one ordeal and you pull through successfully, that trust and mutual respect go a heck of a long way. So the next time you have your own fail whale with a team, take a deep breath, scramble to fix the problem and the perception, and then have a strong drink with everyone. You’ve earned it.