diff --git a/src/calibre/srv/embedded.py b/src/calibre/srv/embedded.py
index 2f3bfc9333..ab5fb7b976 100644
--- a/src/calibre/srv/embedded.py
+++ b/src/calibre/srv/embedded.py
@@ -80,6 +80,18 @@ class Server(object):
     def serve_forever(self):
         self.exception = None
         from calibre.srv.content import reset_caches
+        try:
+            _df = os.environ.get('CALIBRE_DEVELOP_FROM', None)
+            if _df and os.path.exists(_df):
+                from calibre.utils.rapydscript import compile_srv
+                compile_srv()
+        except BaseException as e:
+            if self.start_failure_callback is not None:
+                try:
+                    self.start_failure_callback(as_unicode(e))
+                except Exception:
+                    pass
+            return
         if self.state_callback is not None:
             try:
                 self.state_callback(True)
@@ -87,10 +99,6 @@ class Server(object):
                 pass
         reset_caches()  # we reset the cache as the server tdir has changed
         try:
-            _df = os.environ.get('CALIBRE_DEVELOP_FROM', None)
-            if _df and os.path.exists(_df):
-                from calibre.utils.rapydscript import compile_srv
-                compile_srv()
             self.loop.serve_forever()
         except BaseException as e:
             self.exception = e