According to the folks at Mintel, only about a fifth of new food products are successful. If you're a baseball player you're considered a great hitter if you succeed only three times out of ten. I've even heard that nine out of ten new businesses fail.
The result is that we're used to seeing new products fail. We forget most of them. But some failures are so spectacular that we remember them for years. And the most spectacular of these is almost certainly the Edsel.
The original idea was for Ford to develop a medium-priced car that would compete with GM's Pontiac and Chrysler's Dodge. Things went wrong almost from the start.
First, the entire planning process was put on hold because of the Korean War. Then there was trouble coming up with a name.
Ford asked the renowned poet Marianne Moore to suggest names. She came up with several. There was "Resilient Bullet" and "Mongoose Civique" and "Varsity Stroke" and "Pastelogram." Her final try was "Utopian Turtletop." Ford decided to honor the son of Henry Ford II, and call the car "Edsel".
The hype was stupendous. Ford announced that the design of the Edsel would be more radical than any other car. It certainly was distinctive. There were air bag shocks and a pushbutton automatic transmission with controls mounted in the center of the steering wheel. From the outside the Edsel was described as looking like "an Oldsmobile sucking a lemon."
Ford also intended the marketing to be more radical than any automotive marketing. Foote, Cone, and Belding got the advertising account and produced the theme, "The Car for the Young Man on His Way Up."
That theme might have worked in 1954 or 55 when the economy was booming and bigger was almost always better. But by 1957 when Edsel advertising started to appear, the world had changed. Economic times were not booming. And the "young man on his way up" was choosing to buy a boat when he got a promotion, instead of a bigger car.
The US auto industry was only a few years away from responding to the downturn and cost-consciousness by producing compact cars. Making the Edsel big and flashy was probably a bad choice.
The folks at Ford were undeterred. They set the sales goal for model year 1958 at 200,000 cars. Edsel General Manager Richard Krafve immediately predicted that the goal would be surpassed. Production began in July 1957. So did an expensive teaser ad campaign.
It was obvious that there would be problems as soon as the cars started showing up at the dealers. Here's how Tom Sneary, the Assistant Manager of the Dallas District, described the situation, "Some of the car doors were roped closed. Some bumpers were roped up. Many of the cars equipped with the air bag shocks were practically on the ground. The 'gear shift' was in the center of the steering wheel and if you used reverse, the trunk lid would open."
The Edsel was doomed. The hype had built up a huge demand for a car that had some serious problems. The first Edsel sale was in Winter Haven, Florida at 1201 AM on September 4, 1957. Only 63,109 more Edsels were sold in the first year, less than a third of the sales goal. The decision to kill the Edsel was probably made during that first year, but the official announcement didn't come until a month after the 1960 models were introduced.
The Edsel may be the grandest failure of all time, and you can pin that failure on a number of causes. In the case of Betamax the issues were almost purely competitive.
Sony brought its Betamax video cassette recorder (VCR) system to market in 1975. A year later JVC came out with a different video recorder system called VHS. Most folks seemed to agree that Sony's system was technologically superior, but by the early 1980s VHS recorders accounted for three quarters of the market.
Sony had been outflanked on the marketing front. Even though JVC was later to market, they had managed to sign up more dealers than Sony.
Technical product reviewers seemed to agree that the Betamax products were "better." What they meant by that is that the Betamax recorders produced higher quality pictures and sound than VHS recorders. Unfortunately for Sony, consumers didn't value the higher picture quality as much as they liked the convenience of the VHS system.
VHS cassettes were larger. The tape moved more slowly. The result was a much longer recording time. With Betamax you could only record an hour of TV. With VHS you could record two hours and soon four hours. That's enough for several shows, or a movie, or a whole football game.
Sony might have been able to catch up with newer products but they never got the time. A bandwagon effect took hold of the industry and carried VHS to victory.
The bandwagon started rolling because of an industry that grew up around the VCR, pre-recorded tapes and video rentals. Customers preferred the longer VHS format because they could very often get a whole movie on a single cassette.
That was a good thing. It meant that you didn't have to get up in the middle of the movie (always at a good part, it seemed) and change the cassette. It meant you only had one tape to rewind.
Video rental stores liked the longer format because their customers liked it, but they had some other reasons, too. It was in the stores' interest to stock as many movies as possible in their limited shelf space. VHS let them do that. So the stores started stocking more movies in VHS format.
That led to the next stage in the virtuous cycle of the bandwagon effect. Folks considering a new VCR saw that with VHS they had a greater choice of movies, as well as the recording benefits of longer tapes. That put both selection and convenience on the side of VHS. Betamax didn't really have a chance after the first couple of years.
Edsel was out of step with the times and sold a product that didn't live up to its hype. Sony had a product that was great on picture, but weak on convenience which turned out to matter more to consumers. In the case of Polavision, the problem was hubris, plain and simple.
Polavision's inventor was Edwin Land. Someone once said that a true genius is a person who has two great ideas in his or her lifetime. By that definition Land was a true genius.
His first great idea was polarizing film. That invention was used by the government for photo reconnaissance in the Second World War and finds a home today in polarized sunglasses. Land incorporated his company, Polaroid, to make the polarized film sheets.
Polarized sheeting was a good, profitable product, but the product that made Land legendary was the one that came next. Shortly after the war, he was in New Mexico with his daughter. He was taking a picture of her against one of those scenic backdrops when she asked him why she couldn't see the picture right away.
Land set to work on the project and produced the first Polaroid Land Camera in 1947. Sales of Polaroid cameras and film made the company a success and by the 1970s it was touted as a "can't-miss" investment. Land must have figured that he was a genius at business.
In 1975 he added the job of Director of Research to his duties as CEO. He put his efforts and $250 million into what he figured would be another big idea. He called it Polavision and introduced it in 1978.
Polavision was supposed to be instant movies. It was, sort of. If you bought the system you could produce a two and a half minute movie with it. You had to use a special viewer to see the movie. And the movie was silent. Those were not earth-shaking benefits compared with other products.
Super 8 film was already available. Super 8 wasn't instant but it was a known technology and your Super 8 movies could have sound. And video was on the way, easier, more robust, and cheaper than Polavision. Polavision died and the failure cost Edwin Land his CEO position when shareholders forced him to resign.
None of these failures had to come out the way that they did. The fact is that most new product ideas are not going work, but that doesn't mean that you have to fail spectacularly and expensively. Instead, pay attention to two simple rules.
Find out what the customer wants and give it to him. The customer may not want what your people think is important. So you have to test your ideas on real customers to find out what works and what doesn't.
Fail early and inexpensively, and use every failure as a learning experience to change your product for the better. If you can't do that, abandon the project. Put your money and effort into something else.
New product failure is inevitable. But it doesn't have to be expensive and it sure doesn't have to be spectacular.
