There has been a long-running discussion in the Market Research Bulletin LinkedIn group about why 80% of products fail. There have been 291 comments so far in the 3 months the discussion has been running. Some of the comments put forward good ideas, some challenge/defend the estimate of 80%, and a few are what US Senator John McCain might call ‘bizarro’.
Whilst there are clearly many reasons why products fail, I think there is a key one that we need to keep in mind. There can be only so many winners. If the number of competitors keeps increasing faster than the chances to win, then the failure rate grows.
As an example, consider the 1896 and 2004 Athens Olympics. In 1896 there were about 43 gold medals issued (* in 1896 first place was a silver medal, but let’s ignore that). In 1896 about one-in-six competitors got a gold medal (slightly fewer since some competitors got more than one). Being very cruel, we could call this a failure rate of about just over 80%.
In 2004 there were about 301 medals on offer, but only about 1-in-35 competitors got a gold medal. Although the ‘market’ had grown by about 700%, the number of competitors had grown by over 4000%.
Think about success from the point of view of the consumer. How many new types of jam, bread, cheese, sport, television channel etc are you going to become a fan of in any given year. There are a limited number of ways to win. The number of ways to ‘win’ typically grows slower than the number of new products being launched.
Market research, like good training, is a process where the chance of winning is increased, but it can never ensure success.