Time and time again, businesses make the fundamental error of not fully understanding what their customer wants
There’s a bit of an entrepreneurial boom at the moment – and in many cases, we’re seeing bold new businesses coming up with genuine innovations that can breathe new life into our industries. In particular, these innovations are taking place in the tech landscape.
But no matter how much hype there is, some innovations just don’t take off. Worse still, some seemingly world-changing ideas (MiniDiscs anyone?) can disappear off the face of the earth.
So is there anything to learn from these failures? Is there a definitive reason why they fail? And what can start-ups and small businesses take from these examples to ensure their own longevity?
From wearables to 3D TVs, hype doesn’t always translate into sales
Let’s look at a few examples of big retail innovations that have bombed.
Smartwatches and fitness trackers launched with the kind of fanfare that made it seem like they’d surpass iPhones in terms of popularity. Fitbit has performed fairly well but sales are declining rapidly, while smartwatches have massively underperformed. The consensus is that the technology was released before it was perfected. Smartwatches fail to do much of what smartphones can – and they simply don’t offer enough compelling reasons to buy one beyond novelty.
Then we have 3D TVs, which are no longer being made by the major manufacturers – a remarkable fall from grace. Back in 2010 when the film Avatar came out, it was unthinkable that 3D wasn’t the future of telly. But 3D TVs were extremely expensive, and fundamentally flawed. You need 3D glasses, you need to purchase 3D-ready channels, and you need the very latest DVD or gaming technology to enjoy its benefits. The cost stacks up, and customers just weren’t interested.
But it isn’t just new ideas that fail – well-established innovations can crumble just as quickly. MySpace helped invent social media as we now know it, and helped to launch film and movie careers across the globe. However, Facebook flattened it rapidly, learning from MySpace’s failure to keep on innovating. In fact Facebook’s whole business model today is based on adapting to new user tastes – principally by buying the most popular emerging platforms, like Instagram.
Do these failures have anything in common?
The specific causes of each of these failures vary – but more broadly, there are some common themes. And one stands out in particular.
In each case, the problem has been a lack of understanding of what the customer wanted or needed. And if we explored the rise and fall of dozens of other tech and consumer innovations from recent times, I think we could draw the same conclusions.
BlackBerry was once the future, but like MySpace, it quickly seemed outdated when something better came along. Virtual reality technology has been promising to hit the mainstream for about 20 years, but like 3D TVs, it’s still too impractical. And remember Google Glass? Like other wearable technology and so many other innovations, the market wasn’t ready and the idea hadn’t been refined.
Time and time again, the biggest businesses make the fundamental error of not fully understanding the relationship between what they offer, and what their customer actually wants.
Find out what your customers want – and keep on delivering it
Whether you’re selling coffee or computer software, the rules of business are the same: get to know your customers. Then, once you understand them, keep an eye on their changing habits, trends, needs and wants. When they change, you need to change with them.
Otherwise, you’ll be buried in that giant heap of failures, along with MiniDiscs, 3D TVs, Betamax’s, BlackBerrys – and a fair few Google products. If you’re feeling nostalgic, share any others you can remember.