A Simple Primer on Product Failures
Understanding potential product failure contributors is part of delivering products
Introduction
Research in the USA and UK from the 1950s to date has shown that, on average, 75% of new product development programs fail commercially.
Commercial Failure means that the company acknowledges two years after launch that there is no chance to recoup the investment made in the product (including the product development costs). Product termination usually follows.
About 95% of new USA consumer products fail. The failure rate in Europe for newly introduced consumer products is about 90%.
In high-tech, the product failure rate range from 60% to 90% — depending on sector and country. Over time, the average product failure rates are consistent at about 75%.
Anecdotally, during the late 1990s and early 2000s, the failure rate in high-tech was over 90% due to the dot.com collapse.
Products fail for various reasons, and understanding why products fail is key to preventing products from failing in the early stages of development.
