Over 30,000 new consumer products are launched each year. Of that number, about ¼ have any sales at all. And 95% of these new products are ultimately destined for failure. And a whopping 80% fail completely within two years of launch. And for start-ups that are introducing a new product, 92% of them fail within the first three years! Yikes! No wonder Rometty talked about being “lonely.”
Studies show that it is not who is first to market that matters most. And the math backs this up – “first to market” companies are six times more likely to fail than those businesses that are not trying to be pioneers. Part of the reason for this higher level of failure is that those “first movers” do not have a road map. They are constantly bumping into new obstacles and problems that no one has ever dealt with before. As well, first-to-market companies are dealing with a rapidly changing environment on the technology front. And that fact can certainly add to the complexity. So not being first out-of-the-gate definitely has some advantages. For instance, you get to know if there is a market for your product before you jump off the proverbial cliff. You also get to pick and choose the best features of your competitor’s offering. Of course, you can also observe a “first mover’s” mistakes – which typically is to focus too much on product development and not enough on building the brand with the target audience. Interestingly, as well, bringing a product to market that competes with others already in the space keeps you focused – you have a built-in target, that of chasing down the front runners!
Perform better!
