Trite Hollywood slogans ignore reality: Your product will likely have failures and need changes
The Law of Victory is motivational and an affirmation for leadership and generals, but it does not apply to most business situations.
BY WILLIAM SEIDEL
John C. Maxwell is an American author on leadership who wrote, “Leaders who practice the Law of Victory believe that anything less than success is unacceptable. And they have no Plan B.”
On one hand, confidence in leadership can be so high that a backup plan is not necessary. It embodies a mind-set of unwavering commitment to succeed.
On the other hand, it is naïve, unprepared and shows an unwillingness to change.
Growth requires change, and pioneering new products involves many revisions. In fact, innovation is change. Having a Plan B is a different route to get to the same destination, or a pivot to a revised destination.
Even the best-designed plans go sideways. Contingency plans are common management tools.
Unrealistic mantra
In the military, contingency plans are used for every phase of every mission. Contingency plans even have contingency plans.
First, this is not a law! It is a rallying cry and an inspirational message to empower people in a primal way.
Maxwell’s message may be motivational for generals, absolutists and leaders—but it has no place in business, because change is constant.
Clients have told me, “Failure is not an option!”
This is a mantra for the U.S. Marines and an attitude of total commitment, like the Law of Victory. Though inspiring, this is the stuff of Hollywood.
In 1970, the Apollo 13 moon landing was aborted. The NASA flight director said, “When bad things happened, we just calmly laid out all the options, and failure was not one of them.”
This is another Hollywood writer tagline, like “Build it and they will come,” from “Field of Dreams”—which is also enormously misleading.
There is no 100 percent success! To say otherwise is to know nothing of sales, marketing, research, development or the product business. Ask any salesperson if he or she converts 100 percent of all leads to sales. The answer is never.
All-Stars fail most of the time
Though it varies by industry, for qualified sales leads a 20 percent close rate is about average. Automotive sales close rates are around 17 percent, home sales close rates around 3 percent.
In music, there is no tolerance for anything less than hitting every note every time. It is right to demand 100 percent success from your airline pilot, but this is not true for most situations.
Eighty percent completions from the basketball free throw line is good; 75 percent pass completion in football is great; batting 35 percent in baseball can make you an All-Star.
But would you hire an auto mechanic with a 35 percent success rate?
A success rate of 10 percent sounds low, but compared to what? Is it 10 percent of product sales off the shelf, which is a miserable failure, or is it one in 10 infomercials that succeed, which is average?
Or, 1 in 10 ideas that succeed from idea to product success, which is highly improbable.
Most consider a 0.2% product success rate unacceptable. However, only 3,000 of 1.5 million patents are commercially viable. And this does not include the high failure rate of unpatented products.
Concept failure rate is huge
Larry Udell of the Innovation Institute evaluated over 20,000 ideas, inventions and products in 30 years. He found 0.1%—or one in 1,000 product concepts— succeed.
Generally speaking, novice inventors are as likely to succeed as the man in the street (0.1%). Ralph Baer, who invented video games, says, “Of the 10 to 15 items we do a year, maybe one or two of them wind up with a licensing agreement.”
The biggest reason new products fail is no product-market fit. Forty-two percent fail because of no market need, 18 percent fail because of price/cost issues, and 14 percent ignore the customer, which is inviting failure.
Add these percentages and we see most product failure can be avoided by understanding how the product fits a customer need.
Corporations and professionals have customers, listen to them, and their failure rate drastically drops. Novice and independent inventors do not have customers to research.
There can be no realistic projections for early-stage concepts. If it is innovative, it is complicated because there is nothing comparable and requires expensive primary research to identify customers.
If it is just another “me-too-product,” sell it at a lower price or with better marketing.
Rare success in early stages
Early-stage product development is from concept to complete product. Business development begins in the early stages to assure there are customers and a viable opportunity.
This continues through the life of the product. Sales success is based on customer acceptance.
Early-stage corporate failure is enormous and hidden. Corporate products fail in the lab, or fail to meet the price, or have poor profits, timing issues, reduced funding, and a host of other reasons.
It’s called culling the opportunities or the kill rate: Eliminate the marginal and focus on the profitable.
Many top performing companies have less than a 6 percent success rate of products that start from concept to customer acceptance. These failures are not recorded, rarely discussed, and simply discarded.
Forbes reports the success of new product launched for established businesses can be from 5 to 15 percent. This is after the product is developed and introduced, like evolutionary products and line extensions—which have a success rate of about 10 percent.
Last word
The Law of Victory is motivational and an affirmation for leadership and generals, but it does not apply to most business situations. Maintaining a positive attitude is important—but not at the risk of denying the truth.
The truth is that anything can succeed if it is marketed correctly. Consider the sales of 22 million Billy Bob Teeth, millions of Pet Rocks and the $300 million of Chia Pet.
Product success is within reach for anyone with the passion, perseverance and grit to make it succeed. And it always starts and ends with the marketing.