On The Level: Why New Products Fail

Words and Photos: Jude Nosek

“Nothing is good or bad, but thinking makes it so.” - William Shakespeare, Hamlet

A Little Bit About New Products …

About four times a month, I get an email asking if Keson would be interested in a new product or invention that will make someone’s life easier. As a rule, we rarely take product ideas from outside of our company. When I was at the World of Concrete trade show in Las Vegas earlier this year, a young man asked me for some advice on my experience with new products. I have likely had more than my fair share of ups and downs on this topic. As with many things in life, it is not easy! To get a product from an idea—from concept, to prototype, packaged, priced, built and delivered—to market is a long and arduous path. In the next few “On the Level'' articles we will explore some aspects of this path and some of the potential roadblocks. 

A few years ago, I was fortunate to attend a marketing seminar series at the University of Chicago (U of C). One of the most interesting topics covered in the series was New Products. I can say with certainty that this is a topic that we at Keson spend a lot of time and energy discussing. And once we decide to move on a product, there is a great deal more spent arguing, developing, and implementing the steps necessary to reduce our risk of failure and improve the products’ chance of success. It is also a topic I am often asked about by inventors, sales people, buyers, and other marketers. I am sure many of you reading this article have had some amazing ideas for products that would make your life or your work better. 

At the seminar, we dove in deeply discussing where the ideas come from and how they get to market. We also spent a lot of time talking about the best practices for repeatable, risk-reducing results. The real goal for a business is to make that path repeatable and to help make that path more likely to lead to a satisfying destination when repeated. 

Below are a few of the U of C data-supported insights and some examples that might help bring clarity. (There was so much data, it reinforced their popular/unofficial motto “University of Chicago, Where Fun Goes To Die.”)

Please note that a product is anything that can be sold:  it can just as easily be a service, like “tax preparation,” “market consulting,” “job site productivity training,” or “crime-scene clean up.”

Why Do Most New Products Fail?

A fellow in the seminar asked that very question. The response of the professor surprised me. “You get to define success and failure. How are you going to define and measure it?”

If a product sells a million units, is it a success? It depends. What if breakeven is at 3 million units? 

If a product generates a million dollars in sales, is it a success? It depends. Perhaps it cost $2 million to develop. 

If a product generates a million dollars in profits, is it a success? It depends.  What if … the byproducts of production polluted a stream, the concept infringed on an existing patent, its popularity cannibalized a more profitable options in your line, marketing hadn’t considered the item’s obvious-in-retrospect shortcoming, etc. 

So, a lot depends on how you define “success” for a product. Having a clear understanding of that at the genesis of a new product (or having a standard definition for your company) can help you weed through the ideas. Defining what you are aiming for will help you hit your target. It is a simple concept, and following this simple step will help your team make better decisions as the product moves through stages.  

To help avoid some of the pitfalls of failure (also the name of my back-up punk band from the late 80s, The Pitfalls of Failure),  the U of C professors offered a number of reasons why products fail according to the manufacturers’ own definitions of success. 

A couple Top Reasons New Products Fail

The Market is Too Small

Tool bags and work sites around the world are full of products that made it to market. If the tool had a price tag on it at any point, there was a lot of work to make it ready for the market.

If you do some close examination of these bags and sites, you will also find many items cobbled together by builders and tradespeople that do THIS SPECIFIC THING. Those altered, mocked-up, jerry-rigged items are everywhere. Keep your eyes peeled for the tell-tale signs and you’ll spot them. Look for duct tape, Scotch tape, glue. Start to notice a stick tucked into a corner, string tethering something to another thing. These are the signs of innovation! However, likely these are innovations whose market size likely isn’t large enough for a fully developed product. 

This is a set of three vials I taped together with Scotch Brand Gloss Finish. The market for this particular item is very, very small. I think it is a perfect tool to help show a buyer or an end-user the advantages of the SOLA Focus vial versus a standard ring vial. As simple and perfect as it is, no one but a Keson marketing person or one of our salespeople would pay for this item. I have assembled 100+ of these for our salesforce. That is the ONLY market for whom the JTV-100 (Jude’s TriVial Demo) is a useful, valuable tool. 

By the way, the product development time was a weekend and eight to twelve glued, taped, clamped, and eventually ruined prototypes, that landed me on this solution. 

Poor Match For Company

We have a salesperson who continuously suggests we sell knives because “all the people out there that are measuring and marking” carry a knife. His is 100% correct, they all carry knives. However, we know nothing about the knife market. If we tried to get into that market, it would likely be a death by a thousand cuts. “Your offering is too small, your blades are too this or too that, your handles don’t do xyz!” Because of our past choices and our current focus, knives are not a good fit for us. We can certainly change that and devote time and energy to exploring this market, but we think that time and energy are better spent on the space we are already in.  

Narrowly defining your offering using some criteria can save you time and help you avoid this pitfall. A great place to start is Jim Collins’ Hedgehog Concept from the book Good to Great. There are three questions whose answers can help your business make better choices. If the answer to any is “no” or even “not really” to any of these, there is a better use of your time, energy, and money. 

For this product: 

1. Are you PASSIONATE about it? 
2. Will it MAKE YOU MONEY? 
3. Can you be the BEST IN THE WORLD at supplying it? 

In the next On The Level, we will continue to discuss some of the reasons new products fail.