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Introduction
Winners and Losers
What if everything you think you know about taking products to market is wrong? What would you
do differently if you realized that only 1 out of 10 new product introductions result in a profitable
business? Would you continue to operate the same way, week after week, year after year? The
surprising fact is that companies large and small, established corporate giants as well as brand new
startups, fail in 9 out of 10 attempts to launch their new products. They unnecessarily burn through
billions of dollars as they try to force their new products into markets where no one is waiting to buy.
Yet time and again they all return to the same processes that produce failure.
The phenomenon occurs over and over again in every product category, whether high tech, low
tech, consumer products, or business-to-business products. Some new product disasters have become
the stuff of legend:
• Volkswagen Phaeton. Volkswagen took all of Toyota’s lessons in launching it’s high-end
Lexus brand and ignored them. Cost to date: $500 million
• Kodak’s Photo CD. Kodak offered film camera customers the ability to put their pictures on
a compact disc and view them on their TV’s. It was 10 years ahead of its time and marketed
to customers who were not ready for it. Viable early adopter market in corporate marketing
departments ignored. Cost: $150 Million
• Segway. Thought their market was everyone in the world who walked and confused world
class public relations with customers with checkbooks. Still searching for their real markets.
Cost to date: $200 million.
• Apple’s Newton. They were right about the Personal Digital Assistant market but five years
too soon. Yet they spent like they were in an existing market. Cost: $100 Million
• Jaguar X-Type. Created a Ford-type, low-end product and slapped the Jag name on it,
alienating their high-end customers. Cost: $200 million
• Webvan. Groceries on demand: the killer app of the internet. The company spent money like
a drunken sailor. Even in the Internet Bubble costs and infrastructure grew faster than the
customer base. Loss: $800 million.
• Sony’s MiniDisc players. A smaller version of the CD wildly popular in Japan. The US isn’t
Japan. Cost to date: $500 million after 10 years of marketing.
• R.J. Reynolds’ Premier and Eclipse smokeless cigarettes. Understood what the general
public (nonsmokers) wanted, but did not understand that their customers didn’t care. Cost:
$450 million
• Motorola’s Iridium satellite-based phone system. Engineering triumph and built to support
a customer base of millions. No one asked the customer if they wanted it. Cost $5 billion.
Yes, billion. Satellites are awfully expensive.
I could go on and on. And you probably have your own favorites you could add to the list. What
if I told you that such disasters can be avoided? What if I told you that there are new product
introduction methods available that dramatically increase the odds of a new product finding a home
-- and at a minimum that guarantee that there will be a ready, willing, and paying customer base
just waiting to get their hands on that new, new thing being lovingly grown in the R& D greenhouse?
The methods I’m advocating in this book -- are easily explained and understood, but they run
counter to the way most companies operate. There aren’t many managers around who are willing to
reject the conventional wisdom that guides most firms in their quest to take new products to market.
Those managers and entrepreneurs who do follow this different path find that there are eager
customers for their products.
To name a few who did it right in their recent, very successful product launches:
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The Four Steps to the Epiphany
• Proctor & Gamble’s Swiffer. A swiveling, disposable mop-on-a-stick. Sophisticated planning
and consumer research have resulted in a $2.1 billion market in 2003 that could double by
2008.
• Toyota’s Prius. They’ve found a profitable niche for their electric hybrid car. As a classic
disruptive innovation, sales will grow and Toyota will continue to eat the existing US car
companies for lunch. In its first five years sales grew to $5 billion. By 2015 hybrids could
make up 35% of U.S. car market.
• General Mills’ Yoplait GoGurt. Yogurt in a tube. The goal was to keep their yogurt
consumer base of toddlers and little kids for as long as possible. Research led to the tube
packaging, making yogurt easier to consume on the go.
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