Why Great Products Fail
Revel in your glorious failures. Dance on the borderline between success and disaster. Because that’s where your next big breakthrough will come from”. - Alberto Alessi
At the front end of design and business, failure has to be seen as part of the process. Design Strategy focuses on learning from past failures to push forward disruptive innovations while still mitigating risk. Only by understanding our failures can we define a plan for success.
In today’s fast paced world even great products fail! In such a high stakes business these failures can cost a company millions of dollars, and an immeasurable hit to their reputation! As the examples below make clear even having great research, design or branding capabilities doesn’t ensure success.
Design research and design thinking tools, when done properly, can develop break through products and strategies that industries forward. I break Innovation strategy down into three areas: Focus, Context, or Alignment. Breakthrough innovations happen when all three areas are in coherence. A major lapse in one area however, can crush the most promising ventures. Below are examples drawn for leading business and research minds of what can go wrong when research fails. I also provide tools to help identify and fight the mistakes.
Focus: Identify the problem, root causes and desired outcomes.
Segway’s Failure to Launch
Example drawn from: The Innovators Solution by Clayton Christiansen
The Segway personal transporter came into the spotlight with overwhelming hype, endorsements, funding, and expectations. After 3 years and $100 million in development Segway only sold 30,000 units from 2001-2007. How could something so innovative and well supported as a concept fail in the marketplace?
Segway got so carried away with their leaps in technology that they focused on developing their solution rather than identifying and addressing the customers’ problem. Its price, storage capacity, mass, and lack of charging options put it out of reach for almost every consumer group.
Today, it’s not uncommon to see a mall or campus security officer or tourist group riding along on a Segway scooter. Purchasing and maintaining Segways in mass helps negate the cost, charging, and access issues. In this format the scooters solve the problem of how to get around in an urban environment. They are a more comfortable and exertion free alternative to the bicycle for quick trips.
Tools for Success:
Clayton Christianson’s “Jobs to be done approach” looks at what role customers are hiring a product to fill. It’s a more user-centered approach to segmenting the market based on users’ needs instead of the products attributes. An IPod might be hired to solve a math problem one minute, and then get a job as an electronic pacifier for a rowdy child the next. Identifying how the product fits into the user’s life helps to avoid costly mistakes and leads to more compelling products.
Often lack of focus issues arise due to a lack of proper problem framing. If the question is too broad, “How do we revolutionize scooter technology?” it can leave the team wondering astray. With too narrow a focus, “How do we incorporate improved gyro stabilization technology into a scooter” you can find out your going down the wrong path too late. You may end up designing just another horse carriage rather than the automobile. The right mix, “How can gyro stabilization be used to help people get around in the city better?” applies constraint and direction while leaving room to adapt and ideate. The frame of the problem directly correlates to the range and quality of the solutions.
Context: Identify the stakeholders as well as their demographics, drivers and barriers to adoption, and the use case for the product or service.
May the Best Cola Win
Example drawn from: Blink by Malcolm Gladwell
In the 90’s Coca-Cola was getting crushed by Pepsi advertisements showing them beating Coke in a blind taste test. Coca-Cola even verified the results with their own exhaustive study. In response, the company developed a sweeter cola called New Coke, which beat Pepsi in taste tests. Yet, despite having the branding, finances, and distribution prowess of Coca-Cola, and what research said was a great taste, New Coke was a complete disaster.
Why? For a very simple reason. Because you don’t drink only a sip of soda and put it down. You drink the whole can. Research shows that people predominantly chose the sweeter of two products in sip tests. When tested over the course of a whole can however, that sweetness can become overpowering. During in home studies where participants drank the whole can, more people choose the Classic Coke taste! The research did not match the context in which the product is actually used.
After the flop of New Coke, Coca-Cola quickly brought back the original recipe as ‘Classic Coke’. Sales rebounded and Coca-Cola continues to be the market leader.
Tools for Success:
Surveys and focus groups have long been the cornerstones of market research. The problem is that they often rely on the customer to communicate their opinion. However, for several reasons: privacy, shame, ego, unconscious or implicit bias, false memories, and peer pressure to name a few; participants either do not or will not tell you the truth. Furthermore, people tend to be drawn to the status quo and fear change. The famous Henry Ford motif puts it this way, “If I had asked people what they wanted, they would have said a faster horse.” This doesn’t mean all surveys or focus groups are wrong. It just means they are better suited for some purposes than other.
Ethnography, the study people in groups, is the ultimate tool for context. The researcher observes people in their natural state to develop latent and often unconscious insights. Journey maps and persona are also great tools to help empathize with customers and help narrow in on their demographics, pain points, and desires.
Contextualizing isn’t only focused on the user. You want to identify all the stakeholders involved. As we will see in the next section a product can work great for consumers but never to reach them if the distributers or manufactures are overlooked.
Alignment: Develop solutions that relate to the stakeholders culture, capabilities, and goals.
Revolutionizing the Film Industry
Example drawn from: The Wide Lens by Ron Adner
After you have identified the problem and who is involved, the only thing left is to identify the best way to solve it. The problem is that “best” is relative. Your E-book reader may be the best technology out, but it’s useless if companies don’t sell any books for it. How do you develop a balanced solution that is advantageous to the entire adoption chain?
This was the dilemma when digital theater projectors launched in late 1999. Digital distribution and projection has tremendous benefits over traditional film technology. Rather than large and expensive film rolls, digital films can be stored on tiny hard drives at a fraction of the cost or even be streamed online. When you factor in the amount of films distributed internationally every year the savings could be in the billions. Theaters would also benefit by needing less storage space and gaining the ability to deliver live content like sporting events. For theaters however, the benefits did not outweigh the $70,000 cost per screen to upgrade. Digital projectors were 5 times the price of film, and had only a third of the life span.
By 2006 only 5% of the U.S. had converted. The problem was eventually recognized and film distributers began to subsidize the purchase of equipment. This helped to better distribute the savings from converting. With the solution better aligned with the motivations of the entire adoption chain, nearly 70% of global screens were digital by 2012. In the U.S the number was 85% and climbing.*
Tools for Success
Our Founder, Rob Brady, loves to say “fail early and often”. Clayton Christensen says you should be patient for growth but impatient for profit. Ron Adner offers the concept of the minimum viable footprint. All of these point to the most important tool to avoid a lack of alignment, prototyping. Prototype is an intentionally broad word, it can be a few pieces of paper and duct tape, all the way through to a concept car at the SEMA auto show. The point is, at each stage of development you want to try the idea out and see how key decision makers are responding to it. Prototyping isn’t exclusive to physical objects, you can prototype a business model, user interface, marketing strategy, or service offering as well.
True alignment unifies the whole system, not just the aspects you control. Even the greatest electric vehicle is limited by users’ access to electricity. Be it a third story apartment or a lack of public charging stations, the result is a gap in the products eco system. Recognizing this gap ahead of time through systems mapping offers the opportunity to innovate around it and gain a competitive advantage.
Design thinking offers a repeatable approach to problem solving. By establishing the problem and the context we can design a solution that best aligns with each party’s goals and capabilities.
Traditional market research is great at predicting success on known quantities such as additional horsepower or better gas mileage. But in today’s world value is often found in the experience. There are no metrics to accurately identify how people will respond to a vehicle seamlessly playing their music from their phone Design Research and Strategy helps companies manage these risks and avoid costly market failures.