Epic Product Fails in Business
Product launches are tough- and even the most successful companies can fail every now and then. Here are some massive product failures, and what we can learn from them.
Sony Betamax: Make the tent bigger
I was fortunate to experience the huge changes in media and entertainment products over the past 45 years or so. In music, we went from albums to cassettes, to CDs, to steaming music (I love my Spotify and Pandora).
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It was cool to go to “record stores”- glad to see that vintage albums are making a comeback.
We also had radical changes in entertainment over that same period (remember Blockbuster Video?). One big change was the home video battle between Betamax and VHS in the mid-70s.
It’s the classic case of limiting access. Sony started selling the Betamax in 1975, and rival business started selling VHS machines at the same time. Sony kept the Betamax technology as proprietary, meaning that other firms couldn’t make the same type of machine and expand the market.
The result: VHS won the market- partly because there were simply more VHS machines in consumer’s hands.
On the flip side, Apple does a great job of creating a “big tent” when it comes to iPhone Apps. Come one, come all: Apple welcomes iPhone App creators, since more Apps may lead to more iPhone users.
The lesson
Keeping a great product’s technology to yourself may limit the growth of your market.
New Coke: A radical product change
1985- senior year in college, and I only drink Diet Coke.
New Coke?
I’m fine, thank you.
Pepsi had a lot of success with the Pepsi Challenge in the ‘80s, and Coke was losing soft drink market share to Pepsi. To compete, Coke decided to introduce a new version of Coke that tasted more like Pepsi- and New Coke was born.
In spite of positive feedback during nationwide taste tests, the New Coke’s 1985 launch was ended within weeks. To get back to what worked, Coke gave its original soft drink formula the name Coca-Cola Classic.
The Lesson: Even though a sample size of customers may tell you one thing, you may get a different result when you do a full product launch. Maybe people just couldn’t bring themselves to accept New Coke after decades of the original Coke formula.
If you’ve had a financial setback in your business, this article may help.
Dasani: Cut your losses
I liked Alex Newman’s answer regarding, Dasani- the successful bottled water brand that we see all over the US
In 2005, Coca-Cola seemed to have an idea that made sense: test Dasani water in the UK, then expand into the rest of Europe. But the firm had to recall the water shipped to the UK, because the water contains levels of bromate above those levels allows by the UK. Bromate is linked to increased cancer risk.
The recall was a public relations disaster, which hurt the Dasani brand’s reputation. Coca-Cola cut it losses, recalled the bottles and ended the marketing in Europe.
The Lesson: Sometimes, recovering from a setback isn’t possible when your reputation is damaged. Cut your losses on move on.
Microsoft Kin: The value proposition
I also liked Kenith Almeida’s answer on the 2010 Microsoft Kin phone, because the product was forgotten about so quickly. The phones included social media capabilities and were sold exclusively through Verizon.
There were a variety of problems, including the fact that the Kin’s operating system was different than other Microsoft products. Also, the product didn’t have all of the features of other smartphones- but was priced at a level with other smartphones. Consumers just didn’t see the value.
The Lesson: Be crystal clear on your value proposition.
Keep in mind that any product launch is risky- and even big companies with smart people can have a setback. Good luck with your product or service launch.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) https://www.accountingaccidentally.com/
(you tube channel) kenboydstl
This article was originally posted on my Quora page.
Image: Frustration, Jason Bolonski, (CC By 2.0)