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The Law of Market Failure: “Most new products will fail in the market, even if competently executed” Alberto Savoia
Let me be blunt – your feature, service or product is likely to fail. This is a well-documented phenomenon:
• Clayton Christensen wrote that 30,000 new consumer products each year – and 95% fail.
• The research firm Nielsen are more optimistic putting product failure rate at 85%.
• A study conducted by George Castellion & Stephen K. Markham put the failure rate for new products at 39% – But this didn’t include new features and updates to existing products.
• Anywhere between 50% (Standish, 2014) and 80% (Thomas, 2019) of features hardly get used with 24% never being used. (1)
• According to Failory, 90% of new startups fail.
If we’re being generous there’s probably, at best, a 50/50 chance of success for your idea. Would you be willing to make a bet on it if it was your own time and money?
We’re told to celebrate failure, because that’s how we learn – and while that’s correct, many of these failures could have been avoided. Failure is as much a failure of process as it is the idea itself.
So how about if you could fail faster and earlier, and be continuously learning? How about if we could fail before our idea reached production? Remember, that each idea that reaches production has a cost above and beyond research, design and development.
Well, we can, but first we need to understand where and why you go wrong when it comes to your ideas. You may be surprised to learn that the issue isn’t with your solution – it’s that you haven’t understood the problem well enough. Let’s look at a few examples.
You’re solving the wrong problem:
According to Nielsen, the #1 reason for of innovation failure is “neglecting to address a broad consumer need.”
In a CBInsights survey, the #1 reason for startup failure was “no market need.”
As the saying goes, it’s easier to fix the wrong solution than fix the wrong problem, and there’s no greater demonstration of this than seeing the amount of effort that goes into driving usage of a “solution” that nobody wants.
Don’t expect customers to help you here. They may send you in the right direction, but they’re not always aware of what’s possible. Be wary of solutions given to you by customers.
For example, I remember a salesperson asking for a report that showed what the customer owned, so the team went away and developed it. When we dug a bit deeper into why they wanted the report, it was so they could work out what the customer didn’t own.
Although there’s no record of Henry Ford saying “If I’d asked people what they want they would have asked for faster horses,” it’s still worth bearing in mind.
The problem you’re solving just isn’t that big a deal:
While in our mind the problem may be worth solving, many of our users may just not be that into it. I’m sure if you took a walk through many people’s houses, you’d see many “problems” that haven’t been fixed. The door that doesn’t shut quite right, the hole in the wall where a picture once hung, the carpet that the cat has scratched. Why? Because the problem just isn’t that big a deal.
There’s an aisle at one of the stores here in Washington labelled “As seen on tv” – It includes such wonders as the avocado slicer, the strawberry stem remover and the chork (a combination of chopsticks and a fork). While they are solving a problem it’s not one that people care about and so the stock remains unloved and unsold on their shelves.
Check with your customer or user as to what’s stopped them from solving this problem previously. That’ll give you some insight into whether they really care about the problem.
The cost of change is more than the benefit:
The cost of changing is more than the benefit of the solution – For every feature we implement there’s a cost to the user. Yes, the feature may be “free” but there’s a cost of learning something new and changing an existing habit. While not monetary, it does use the thing that users value most – time. There are many features that could save users time – but for some it’s just quicker and easier to keep the status quo.
I’m sure there’s wonderful Macros and Flows I could create that would automate many of my tasks – but in many cases the time spent learning and changing is more than the time saved.
The market size for your solution isn’t big enough:
Your power users may be clamoring for your idea but that may be just a small subset of your users. Think about what the impact is to the rest of your users. If power or niche users are only 10% of the users, do you want to add a feature that pleases them, but makes the tool harder to use for the other 90% by adding complexity?
As Steve Jobs said “I’m actually as proud of the things we haven’t done as the things we have done. Innovation is saying ‘no’ to 1,000 things.”
Sometimes saying no may be hard, especially if it’s your biggest customer asking – but in the long run you’ll be better off.
These are a few reasons for why and where ideas can go wrong. In our next installment, we’ll cover a few more, and how to address them.
What do you think? Where have you seen these fallacies in play? What others would you add? Tweet us your thoughts at @MicrosoftRI or follow us on Facebook and join the conversation.
John Westworth is a Design Researcher in the Office Design and Research team. He is passionate about providing leadership to help companies implement change and manage transformation to use new technologies that impact how they work. Check out John’s other blog articles, “A responsible approach to innovation,” “Conflict: The missing ingredient and biggest test of a growth mindset,” and “The true cost of your idea.”
(1) For some features low usage is a good thing – for example if you’re working on a disaster recovery product. But for most of us, low usage usually means we’ve built something that doesn’t help people achieve more.