What you can learn from the Museum of Failure

A couple of weeks ago, I took some clients on a trip to the Museum of Failure while it was in D.C.

It's a touring testament to some of the most significant innovation missteps of the last couple of centuries (think Sony Betamax, the Delorean and Colgate Lasagne), and it's well worth a few hours of your time when it's in a town near you.

Partway through the tour, a client asked me, 'How do we make sure we don't wind up as an exhibit in here?'.

Though long-winded and rambling, my answer centred around noticing how many of the examples predominantly failed due to a lack of 'fit' or alignment in three key areas, and I wanted to try again to articulate how important these checkpoints are through a mini-tour of some of the exhibits.

Google +

Google's foray into social networking is a classic case of misaligned Company-Opportunity Fit. Designed to compete with Facebook, it boasted unique features like user circles and Google Hangouts for video chats. But it didn't scale significantly with users. The primary issue wasn't a lack of problem-solution fit or even product-market fit; it was the absence of company-opportunity fit. Google's core competencies lie in algorithms, search optimisation, and advertising, driven by very different user behaviour and network effects than social media.

When you’re identifying new opportunities to pursue, you have to be able to demonstrate:

1. Mission and Vision Alignment: Does the opportunity align with the company's mission, vision, strategic objectives, and core values?
2. Resource Availability: Are the necessary financial, human, and other resources available to pursue this opportunity?
3. Internal Support and Appetite: Is there support and enthusiasm within the company for this opportunity? Does it resonate with the organisational culture and stakeholders?
4. Skills and Knowledge: Does the company possess the required technical skills, managerial capabilities, and industry knowledge to capitalise on this opportunity successfully?
5. Organisational Compatibility: Is the opportunity compatible with the company's existing organisational structure and business model?

Crystal Pepsi

Another example of misalignment is Crystal Pepsi, a caffeine-free cola variant marketed as a healthier choice. Launched in 1993, the product failed to address any significant consumer problems or offer a compelling solution. Consumers simply didn't perceive a clear beverage as an improvement or a healthier alternative, and the product was discontinued a year later. This misadventure in problem-solution fit led to its failure.

When you’re developing new propositions for customers, you have to be able to be able to demonstrate:

1. Problem Understanding: Is the problem clearly defined and understood? Have we engaged with customers to validate the existence and significance of the problem? Are we aware of the depth of the pain it causes?
2. Effective Solution: Does the solution effectively address the problem, fulfilling customers' functional and emotional needs, and does it outperform existing solutions?
3. Customer Value and Usability: Do customers find the solution valuable and easy to use? Would they be willing to pay for it, and is it more beneficial than problematic?
4. Iterative Refinement: Have we refined the solution based on customer feedback and testing? Is there a process for continuous improvement based on real-world usage?
5. Feasibility and Viability: Is the solution technically feasible with our current or attainable resources, and is it commercially viable at a scale that makes business sense?

Microsoft Zune

Microsoft's Zune is an example of achieving Company-Opportunity and Problem-Solution Fit but failing in Product-Market Fit. Launched in 2006, the Microsoft Zune entered a declining market of standalone music players dominated by Apple's iPod. The product's bulky design and less intuitive interface than the iPod also contributed to its failure. Despite Microsoft's capabilities, Zune didn’t offer a compelling advantage to shift market preference.

So when you’re validating new propositions in market, you have to be able to demonstrate:

1. Customer Retention: Are users consistently engaged with the product over time, indicating ongoing satisfaction?
2. Organic Growth: Is the product acquiring new customers primarily through word-of-mouth or organic channels?
3. Customer Feedback: Is user feedback generally positive, suggesting that the product meets or exceeds their needs?
4. Perceived Value: Would users be significantly disappointed if the product was unavailable?
5. Usage Trends: Are there increasing trends in product usage, purchases, sign-ups, and other activities indicative of growing demand?

As we hurtle into another economically challenging year for many of you, these types of fit should be lenses through which you view all your work.

They’ll help you to avoid the public, expensive, and prolonged failures that we shouldn’t celebrate and embrace modern design thinking, lean startup, and agile product development methods so you can make sure your setbacks are quick, cheap, and private.

The Museum of Failure isn’t just about the past; it's an important reminder that creating a product is not enough. You have to make sure the product is right for your company, solves a real problem for customers, and compellingly meets market demands at scale.

P.S. We run programmes designed to help clients establish company-opportunity, problem-solution fit and product-market fit in a time-bound, outcome-driven way. If you want to work with us on one of those programmes, we’d love to talk you through them. Grab some time here.

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