We all know the percentages: 80% of new products fail. The odds are stacked against the innovators, it’s high risk stuff and yet we all know that every company needs new products and services to survive long term. Risk adversity can therefore stifle new product development and traps too many companies with mature products, operating in mature markets, surviving through operational efficiencies and depleting margins.
New product development can be high risk and expensive. Take the medical device industry for example where the costs can extend to millions of dollars and the time to market can be 3-5 years where clinical trials and regulatory approvals are necessary. The barriers to entry are less for other industries like software and services but nonetheless can be expensive and require a lot of time. The adage “Fail Fast, Fail Early” is increasing appreciated in the context of the risk and investments required to take a product idea all the way to market. The principle makes a lot of sense and promotes early and robust qualification of the product/service concept before significant resources are committed. The spirit of entrepreneurship should therefore encourage a culture of measured risk and trial & error within companies. It’s ok to fail but fail early and move on to the next idea!
I only have one issue with this however as I believe a gap exists in understanding within companies about why new product concepts, or indeed why early commercialized products fail. Was the market properly validated? Did we understand the customer need and how to differentiate our offering? What was our value proposition and route-to-market? What did we learn???
The NPI (new product introduction) process does not guarantee that every idea will commercialize if you follow the structured process. Nor does it guarantee that commercialized products will succeed (many factors can influence success after launch and sometimes these will be outside of your control). What it should do is provide a framework to reduce risk, gather objective market intelligence, qualify the opportunity and sharpen your approach for next time.
So let’s change the aim from “Fail Fast, Fail Quick” to ” Fail Fast, Learn Quick” and make sure that the average ideas we reject today don’t stifle tomorrow’s great ones.
If you find this blog of interest or would like to discuss your next new product development idea with IMS please contact us today