Albert, a programming student at Netopia University, had an assignment one day to create a navi. Instead of using the navi template as a base and modifying it like the other students, Albert felt he could create the navi from scratch. However, he wasn't a very good programmer to begin with and ended up making the navi who would later become known as Failureman. The navi was poorly written: Full of unnecessary code, variables and functions that were never called and loads of malfunctioning subroutines. For some reason though, despite all the errors, the navi still compiled and functioned... Barely.
The professor, upon seeing the navi Albert had created, gave him a failing grade on the assignment. He said it was the worst excuse for a navi he had ever seen and demanded that Albert delete the navi immediately. Albert protested and believed that his navi could truly become great given enough time and effort and went against the professor's wishes. All the while, Failureman was running in the background watching as his creator fought for his right to exist. He was speechless and vowed to always follow Albert no matter what.
Albert brought him home and fixed him up with various patches to keep him from falling apart. Since Albert had been so concerned with only the programming aspect of his navi, he didn't think about naming him so he named him Failureman due to the failing grade he was given. Failureman doesn't see the name as an insult but more as a reminder that despite what he is, he still has a great operator and friend in Albert.