Regular readers of this blog
(assuming I have readers) already know that I collect these stories; they’re a
staple of my lectures at MSU as well as a major part of why the “Stupidity” tag
appears on more of these posts than any other. Sometimes I do find myself
having to remind people that most businesses (and business people) aren’t
actually idiotic failures; it’s just that people who operate a business
successfully very rarely need to hire management consultants, and they even
more rarely do anything funny enough to be worth making snarky comments about
in a business blog. And while anyone who aspires to run a successful company,
or even work for one, absolutely should study the way successful firms have
accomplished their missions, I was still practically giddy when I learned that
an entrepreneur and clinical psychologist had launched a Museum of Failure in
the city of Helsingborg, Sweden…
You can visit the Museum’s own site if you want more information, or pick up the Detroit News story online
if you’d like to read about the operation. Some of the artifacts in their
collection will probably already be familiar to the reader, such as the
infamous Apple Newton PDA or the venerable Sony Betamax, while others may have
slipped under your radar, like the Harley-Davidson fragrance products or the
visually revolting green catsup. But while many of these items may move you to
wonder what the inventors were thinking, the key point of this exhibition isn’t
so much that they failed as specifically how. Because while many of these
products are every bit as preposterous as they sound, some of them are quite
sound in themselves…
Take, for example, the
Betamax. Most people know it simply as an older format that lost out to the
more common VHS tapes (before the entire product category were rendered
obsolete by DVDs, Blu-rays, and eventually streaming video services). What most
people today may not realize (or remember) is that the Betamax was actually a
better product. By any objective standard, the Betamax had better picture
quality, better sound quality, better workmanship, and was generally more
reliable than even the most advanced VHS systems. What did it in wasn’t price
or quality so much as a fundamental misunderstanding of the market – and the
competition…
When Sony first introduced
the Betamax it was a very innovative concept: bringing both the size and the
cost of video tape down to the point where any private citizen could have one
at home. Consequently, the company decided to keep close control of all aspects
of the system, refusing to allow anyone else to use the technology. With no
real competitors, they could set the price point wherever they wanted to, and
take their time bringing out additional features. The extent to which their
competitors reverse-engineers the Betamax design remains somewhat unclear, but
in addition to the lower price it was the longer tape running time and
pre-recorded tapes that made the VHS so much more successful. With a run time
of less than an hour, later increase to just over two, it would be difficult to
record movies from cable or broadcast television on a Beta tape, and initially
it was almost impossible to find anything pre-recorded on one…
Now, I don’t mean to suggest
that the failure of the Betamax, or any of the other products in the Museum,
for that matter, would have been easy to predict in advance. If I could tell
you with any certainty what products or features would sell in any specific
market I could probably have retired on the fees from telling companies not to
build the Apple III, the Google Glass, or the Pontiac Aztec. I am in full
agreement with the founder of the Museum that all future innovators, and the
operational leadership of companies attempting to sell new and innovative
products, should study all of the products in this collection, and any others
that they can get their collective hands on…
Because I can almost guarantee
you that the next big exhibit in the Museum of Failure will have its initial
product launch any time now…
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