Products fail all the time.
We don’t hear about most of them because it’s not that fun to tell other people about how you failed.
We only hear about the successes, and the founders make up some narrative about why they made it that is full of survivorship bias. Reading about why Facebook succeeded is not that helpful to someone starting out today. Almost all of the variables you will face are different than those faced by Mark Zuckerberg.
The success of others should inspire you, but if you are struggling it can be like salt on an open wound. The problem is that successful products are almost always taken out of context. We don’t see how hard it was to get there, and we don’t see how many times they failed. Some unicorns made it big on their first try, and then we wonder why we can’t be like them.
Forget that noise.
Lots of smart people have failed, and it’s ok if you do too. Scott Adams failed at almost everything in life, and then he became one of the most successful comic artists of all time with Dilbert. Steve Jobs got kicked out of his own company, and failed trying to start a new one. The guys at Drifty had a few false starts with mobile app related products before striking a chord with Ionic.
There are a lot of reasons products fail, including not validating your idea, not getting the business model right, not solving a real problem, and hundreds more.
Let’s get some perspective by looking at product failures, and see what we can learn.
When a great product is not enough
I’ve never seen a more loved product that didn’t make it than Rdio. The design was incredible, the timing was right, and they had raving fans. They built an amazing product that lots of people loved, but they didn’t make it.
From the start, though, Rdio was in trouble. Even in late 2010, when it began to spread among design-savvy early adopters in San Francisco, people were already talking about the coming launch of Spotify…Its secret: free on-demand streaming, supported by advertising. - The Verge
Sometimes you’ll hear the advice focus on the product. They may have focused on the product too much, which you don’t hear often. Spotify was no slouch on design, but they had what people love more than anything, free.
In the end Rdio folded because they couldn’t compete with the buzz Spotify created, and the freemium pricing model.
When solving a real problem is not enough
You always hear that you should “solve a real problem.” This is absolutely the truth.
As a smarty pants college professor might say, it’s necessary, but not sufficient. Solving a real problem is one part of the equation, but it’s not the whole thing.
Derrick Reimer had an idea for a Slack alternative that had a valid pain point.
Real-time chat was making everything feel urgent. Moreover, the company culture had evolved to the point that people expected quick responses to all messages. Conversations were disorganized. Vital information was getting misplaced among the din of idle chatter.
We were not alone. People across the internet were beginning to recognize these shortcomings of chat. Maybe chat wasn’t the holy grail of workplace communication that so many believed it to be. There were signs that a movement was afoot, but no one was championing the cause with an alternative product in hand. Why not me?
He decided to create a solution, but first he went about validating his idea. He had lots of encouraging signs early on, he talked to lots of potential customers and found that they felt the same pain he was trying to solve.
Things got tough when he actually had a product for people to try, the beta testers just weren’t that interested. He found that he had solved a real problem, but no one cared enough to actually pay for it.
I did another round of calls, this time running the Mom Test playbook. What I found was troubling. Everyone expressed being “annoyed” by Slack, even calling it a “big problem.” However, when pressed with the question of “what have you done about it so far?”, almost universally the answer was “nothing.”
This is a really important concept. There are real problems out there that people will complain about, but they won’t actually take action to fix.
Validating your product idea includes figuring out if this is a problem that people are actively trying to solve. If not, it’s a dead end.
When Scratching Your Own Itch Doesn’t Work
This may be the most common piece of advice you will hear about building products: scratch your own itch. People always use Basecamp as an example.
The easiest, most straightforward way to create a great product or service is make something you want to use — Jason Fried
There’s nothing wrong with this, in fact I would give people that same advice. The problem is that if it’s taken out of context, it can be misleading.
I built a popup plugin called Holler Box because I wanted a less intrusive popup solution for my own website. I made a lot of mistakes with that product, but one was that I focused too much on my own needs. It turned out my needs were not a big pain point felt by a larger market.
Another example is Marginalia – a failed journaling product. Developer Pete Keen wanted “a cheaper, more programmer friendly alternative to Evernote.” Pete writes on his blog, “It never took off, despite my best intentions.“ He found out a little too late that what he wanted did not make a successful product. Scratching your own itch does not always make a success.
Another way to think of this (that I think came from Chris Lema) – You are not your market. Sometimes your interests align with a larger market, but many times they don’t.
When having an existing audience isn’t enough
It’s really hard to launch a product with no audience, but having an existing audience is not a guarantee of success.
In fact, it may even hurt you. Justin Jackson mentioned this idea in a recent tweet.
Derrick Reimer’s product Level was a victim of the type of unhelpful enthusiasm Justin describes.
Google probably had the largest existing audience ever for some of their failed products, and they struck out multiple times. Google Wave, Google Buzz, Google Plus, and Knol, all failed despite a large built-in audience. Coke failed with New Coke, Levi’s failed making men’s suits (Tailored Classics), and Mars Attacks was a horrible movie despite a cast of lots of famous actors.
This is not an excuse to ignore early marketing efforts, but don’t think that having a big email list is a magic bullet.
When high demand is not enough
I’ve heard it said that sales solve all your problems.
If you have revenue coming in, you can figure out the rest. The problem is that if you aren’t making profit, more revenue means more losses. It’s certainly true in the case of Toygaroo, a startup that attempted to be the Netflix for toys.
You may have seen Toygaroo on Shark Tank, where they got a deal with Kevin O’Leary and Mark Cuban. Needless to say, they had plenty of attention for their idea.
Toygaroo was doing well and we were always getting more customers. The issue was getting control of two things – inventory costs and logistical costs. We had hoped that O’Leary would be able to introduce us to people in the toy business, given his past with Mattel. If that ever happened I didn’t hear about it, and certainly, we never saw any purchasing benefit…So costs spiraled.
In the case of Toygaroo, the worst thing that could happen to their company was to get a bunch of orders. When that happened, they struggled with inventory and shipping costs, and they eventually ran out of money. They burned through $250,000 before folding. Ouch.
What can we learn from these product failures?
Having a great product, solving a real problem, scratching your own itch, selling to an existing audience, and high demand aren’t enough.
What are we to do?
Things are not hopeless, here are 5 things we can take away from these product failures.
- A great product is important, but not at the expense of a viable business model.
- Validate your business idea by making sure people are actively seeking your solution.
- If scratching your own itch, make sure there are other folks out there with the same itch.
- You must find people to sell to, but an existing audience doesn’t solve all your problems.
- Don’t go on Shark Tank 😉
Even more importantly the lesson is that sometimes things just don’t work out, for reasons you can’t control or you don’t foresee. That’s ok.
The product business is a tricky place, and there’s a lot to learn. That’s all part of the fun.
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