The number one reason new products fail (and how to avoid it)

Lately, I have been working with PhD Candidates and Researchers at a local university helping them to commercialise their research and ideas. Researchers, not unlike companies and startup founders, become so ensconced in their field and their product that they fall in love with it, and are unable to look at it critically.

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To them, it's naturally perfect in every way and once launched, the creator expects it to fly off the shelves (or out of the App Store). However, the reality is often a lot more disappointing - it doesn't sell, no one is interested, and they cannot understand why.

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Failing to provide a value proposition

The number one reason for their product failing is simply that it wasn't created in consultation with their target customer market and ultimately, failed to provide a value proposition that is strong enough for someone to hand over money. Not enough time was spent early on in the development to truly understand the problems of their target market. Such problems might be fairly apparent, but until you properly validate the problem, you don't know if it's big enough for the target customer to do something about it.

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Developing ideas in a cone of silence

In most cases, people develop their new idea in a cone of silence, worried that someone else might steal the idea and develop it ahead of them. For organisations looking to innovate, this is an incredibly risky strategy. It is so important to create prototypes and to be able to experiment with a number of different solutions to see if you can solve the problem, or change a customer's behaviour before you invest in actually building it. You would never build a ship and fill it with 1000 people before testing whether it was going to float or not. BHP Billiton would never spend a few billion on a new mine after just kicking some red rocks that look like iron ore without extensively drilling and testing samples from the orebody.

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Finding a problem worth solving

Henry Ford once said that if he had asked his customers what they wanted, they would have said that they wanted a faster horse. Before you get anywhere near creating something, you need to make sure that you have found a problem worth solving. You need to understand exactly how that problem is impacting people in their daily lives and the consequences. Using the Henry Ford example, a developer would want to understand the issues potential customers face with their existing mode of transport, a horse and cart would discover that there are in fact some issues around reliability, the cost (and effort) of maintaining a horse (s) and convenience (it's slow). For people to part with their horse and cart, the car needed to provide a better value proposition.

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As a result, Henry Ford created a car that was simple and easy to use as a horse and importantly was in reach for most financially. Creating new products, or moving your business into new markets is difficult. There are stakeholder issues, shareholder and financial risks associated with any established business. However, investing in new products and services, and spending shareholder money is even riskier when you fail to create your product in consultation with your potential customers and fail to provide an attractive value proposition.