What You Can Learn From Product Launch Failures

If you're launching a new product, studying product launch failures can help protect you from making the same kinds of mistakes. Of course, each product has its own unique attributes, and market conditions fluctuate, so the reasons for a specific product launch failure will vary. Nevertheless, by analyzing the mistakes made by others -- even big companies that should know better -- you could increase your chances for success.

Here are three notorious product launch failures that you can learn from:

Sony Betamax

In the 1970s, the Japanese company Sony introduced a video recording system called Betamax. While Betamax featured great sound and picture quality for a home recording system, Sony decided to do something that turned out to be a fatal mistake. Because the company thought it had invented something so unique in the marketplace, Sony made Betamax technology proprietary. Sometimes keeping a technology proprietary is a good idea, but in this case, Sony misread the market for video recorders. Competitors, mostly other Japanese companies, came out with products that all standardized around a technology called VHS. Soon, every company was making VHS recorders and players, while Sony was the only manufacturer making the Betamax system. By 1988, Sony had to admit its failure and introduce its own line of VHS equipment. By that time, however, it was too late. Other companies had already dominated the VHS market.

Key lesson: Be sure you understand where a market is headed before you commit to a product direction -- especially one that isolates you from the mainstream.

Segway

In 2002, Dean Kamen, a renowned inventor who holds over 440 U.S.and foreign patents, introduced a two-wheel electric vehicle to the transportation marketplace called the Segway. There was tremendous buzz about the product even before its release. Some $100 million was invested in developing the product. When the Segway came to market, however, the public was underwhelmed. Perhaps the Segway was ahead of its time, or maybe the product couldn't live up to its hype, but the interest paled in comparison to the sales projections. The Segway was odd looking, it had technical problems, and it was expensive, averaging around $5,000 each, depending on the model. Touted as a vehicle that would revolutionize travel, the Segway flopped badly. Less than 30,000 units were sold in six years. It still exists, but is sold only for specialized usage. TIME magazine named the Segway one of "the ten biggest tech failures of the last decade."

Key lesson: When introducing a visionary product, be sure the market is ready to embrace it.

Netflix

In 2011, Netflix, the very successful DVD rental service, recognized that its video streaming service was the road to its future success. In an effort to move the company quickly in that direction, the Netflix CEO announced that it would unbundle the DVD service from the streaming service. Not only did the company change the pricing structure, it also announced that it would launch a separate service called Qwikster for its DVD customers. That meant customers who used both the DVD service and the streaming service would have to use two separate services for their rentals. The reaction from customers was swift and angry. In the third quarter of 2011 alone, Netflix had a loss of about one million subscribers -- 4 percent of its subscriber base in just three months. Its stock price also dropped dramatically. While Netflix did not retract its new pricing, the company was forced to reverse its decision to separate the two services. Qwikster was quickly quashed.

Key lesson: Launching a new service that fundamentally changes how a majority of customers do business with a company can backfire.

Barry Silverstein has over thirty years of business experience. He has helped scores of companies big and small launch products and services. He ran his own direct and Internet marketing agency for two decades and also worked for major marketing agencies. He is the author of two new eGuides: Product Launch 123: Launch a Product or Service in 3 Proven Steps, and Branding 123: Build a Breakthrough Brand in 3 Proven Steps. Product Launch 123 and Branding 123 are available for $2.99 each at the Amazon Kindle store, for the nook, iPad, and in any eBook format at Smashwords.com. A free "Sneak Preview" of both eGuides is also available at Smashwords.com. More information about these eGuides is available at http://www.123eguides.com