Why So Many Product Ideas Fail?

Top five reasons why so many product ideas fail and never see the light of day.

“Each year 30,000 new consumer products are launched — and 95 percent of them fail.”

— Clayton Christensen (Harvard Business School)

Key point is —we productize and launch these 30,000 ideas every year and only 1,500 of them (5%) succeed. Question is — how many ideas fail even before they are launched? If we account from the time when new product ideas emerge and go through all kinds of organizational vetting process, there isn’t much of a consistent data available on how many of those ideas fail even before they are launched.

Some time back, I conducted a quantitative survey to make an informed guess on the ideas failure rate. Based on the survey result, I found that only one out of one thousand ideas pass through the organizational diligence process and are launched to market — 0.1% launch rate (idea generation to product launch). Then of all the products that are launched, only 5% of them are successful as 95% products fail after launch. So, if we combine both the metrics (idea generation till the success of the product after launch), the overall success rate turns out to be just 0.005%. The horizontal funnel chart below demonstrates this visually.