I have launched products that failed both as an
employee and entrepreneur. From these failures I picked some lessons
that I am happy to share with those who care to listen. I have applied
them in my current business and also in my consultancy engagements.
Given that we live in a society where those who fail
are laughed at, very few entrepreneurs and managers would like to talk
about their failures. As a result we follow the same road that has led
many to destruction. I would like to warn those starting businesses and
launching new products for their companies of the mistakes to avoid from
these four key lessons I picked from my failures.
Probably if you take these lessons to heart your
products will not join the list of the 90% new products that fail in the
process costing businesses billions worth of investments.
Lesson 1: All your assumptions are wrong, until proven otherwise by the customer
When I started my first business, I wanted to hit the
world of entrepreneurship with a big product that would revolutionize
the market. I looked around and I discovered some new product that
seemed like the ultimate solution to sales training problems. The
product was based on some ground breaking principle in adult learning.
It combined interactive games and sales lessons. I made the assumption
that every organization that has sales people would love to have it. In
addition to its power it would help companies do away with expensive
training programmes because the sales manager would use the tool to
train his people.
I talked to my wife into disposing of the family car
and invested the savings in the business. My partner took a loan and off
we went to bring the product in the market. Everyone who saw the
product fell in love with it but, only a few forward looking
organizations bought the product. What we got is a lot of organizations
that engaged us to train their sales people using the toolkit.
Our assumption that companies were ready to replace external trainers with in-house training resources was wrong.
When we were left with a huge stock of the product
that was not selling, despite the fact that my partner and I were great
sales people, the lesson sunk. Whatever assumptions you have about your
target market’s needs prove them with real customer who has to pay.
Lesson 2: Those who are most enthusiastic about a new innovation are rarely a representative of the target market
Whenever I developed a new product I targeted it to
the most open minded customers I can imagine of. The result was always
quick sales and raving fans. But after the first few customers who saw
the obvious benefits of the products I would come across a number of
customers who were not willing to spend on something new and innovative.
After a lot of reflection I discovered that the so
called early adopters do not represent the real market you want have.
The largest chunk of any market segment is conservative and is not open
to new ideas. Most new products are made for early adopters with a hope
that the conservatives will come running after them. This is prayer not a
strategy and most of the time it is not answered because it is a faulty
prayer.
Lesson 3: Sales people are the best resource in development of new product
Generally speaking, most new product ideas are generated by those who sit in the offices and factories.
The driving desires are usually to grow the business
revenues and increase market share. Those who can make decisions on new
products exchange their ideas and agree to go ahead. Production people
are asked whether it can be done and their response is we have all that
is required to do it.
After the product is ready it is given to sales people
to sell. They try hard to sell it but the results do not come through.
Over time sales people are fired for bad attitude and non performance.
While there are sales people who look for excuses for non-performance,
experiences shows that it is the company that came up with a product
that the market was to be sold rather than to be bought.
The lesson from this is that the best resource you can
utilize in your new product development is the sales team. These are
the people who are with the customers on daily basis. They understand
the dreams, frustrations and wishes of the customers. If only you asked
them what kind of product to make you would not struggle trying to throw
more money into bad money trying to sell the wrong product?
Lesson 4: Product development should not end with the product launch
We work so hard to have a perfect product which the
customer must buy, use and like. If they don’t like it we blame the
customer. We are annoyed that he doesn’t see how hard we worked to come
up with the best product for him. In our determination for success we
decide to do whatever it will take to get him to buy and like the
product. However hard we try the more indifferent the customer becomes.
This battle between a company that believes it has a
great product and customers who insist they require some improvement
will go for long or short while depending on how much resources the
company has to ran marketing programmes. But as long the product doesn’t
become better as per the customer requirements it will eventually fail.
They take home from this be open to make adjustments
on your new product until it matches what your customers require. This
can be demonstrated through Radio Africa’s strategy of setting up new
radio and television stations. When a new station is being introduced
you feel that although the company is determined to get a new station it
is not certain on what kind of station it is trying to create. Changes
are made to the product and sometimes even the target customer is
changed. At the end of the process you cannot tell the final product
from the one you first saw.
While you may not do it as Radio Africa but, you
should not miss the fact that you need to learn after you introduce the
product and build the lessons picked into the new product.
Ultimate Lesson: Listen to your customer
If you combine all these lessons you get one simple
lesson that whatever product you want to make for the market it should
be inspired and driven by the customer. . Profit in business comes from
repeat customers, customers that boast about your project or service,
and that bring friends with them.
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