Wildly successful start-ups always hit the headlines, but innovation fails are all too common. More common than you might think. No one wants their innovation vision to fizzle. So we’ve decided to explore the common reasons why innovation fails. And what, if anything, founders and business leaders can do to side-step these dream-crushing pitfalls.
Nine ways your innovation can fail
The experts have spoken, and most agree. Innovation failure commonly falls into nine different areas. Could your business innovation be at risk of one or more of these pitfalls? Let’s take a look at what they are.
1. The innovation didn’t have a problem to solve
Innovators can get so wrapped up in the technology or solution they’ve invented, that they overlook one vital ingredient: the problem it solves. If your innovation doesn’t offer a solution consumers need, then it’s innovation for innovation’s sake. Avian’s Water Bra was designed to keep the wearer hydrated, cool and presumably well-supported at the same time. But like the Juicero, a machine designed to squeeze pouches of juice into a glass, it’s a classic example of an innovation no one wanted or needed.[1] Always consider whether your innovation is providing an unmet need. If you don’t, you could waste precious time and resources and miss a genuine opportunity to innovate.
2. The innovation wasn’t good enough
Good ideas are the basis of great innovations. But some businesses can struggle to get out of the starting blocks. They produce weird and wonderful ideas that just don’t cut the mustard. The Premier Smokeless Cigarette and CueCat are prime examples.[2] In the 1980s, RJ Reynolds sunk an eye-watering $325 million into a smoke-free cigarette that would simply heat the tobacco leaves rather than burn them. But the innovation backfired, and quite literally left smokers with a bad taste in their mouths. The CueCat, a device for scanning internet barcodes, sprang into the market at the height of the dotcom boom as an alternative to typing in URLs. But disinterest from consumers left the CueCat languishing on desks as an expensive paperweight instead.
3. The innovation was poorly executed
You can have a great innovation that solves a problem for consumers. But if you execute your idea badly, you’ll run into trouble, just like Ford did with its notorious Pinto. Raising eyebrows because of its name in Brazil was the least of its woes.[3] With an iconic design and budget price, the Pinto seemed destined to be a runaway success. But Ford overlooked the need to strengthen the Pinto’s fuel tank, leaving the vehicle prone to bursting into flames whenever one was involved in even the most minor of collisions.
4. Not having or not following an innovation strategy
Without an innovation strategy, you’ll struggle with focus and motivation when the going gets tough – which inevitably it will. Worse still, if you create an innovation strategy, but allow yourself to get distracted and diverted, you’ll risk heading down blind alleys and burning through resources on R&D whims. Ultimately, you’ll probably fail to get to market as fast as you could have done. Take Swatch for example, the watchmaker was beguiled by the prospect of developing an intelligent watch with Microsoft. It created the Swatch Paparazzi — a watch that could continuously communicate with home PCs and other devices using radio waves. But when it didn’t catch on, Microsoft canned the project and Swatch was left holding the baby.[4]
5. The timing was wrong
Some innovations were just born in the wrong era. But a lucky few get another chance to shine. Apple Newton Message Pad falls into this category. When it premiered in 1993, after a rather rushed launch process, the world wasn’t ready for its shortcomings or its hefty price tag. However, its technology and the lessons Apple learned paved the way for the phenomenal success of the iPad. While you can take steps to read the room on customer readiness, it’s not always possible to mitigate every timing issue. Many leisure and event-related innovations and apps, for example, saw their innovations falter with the onset of the pandemic in 2020.
6. No customer demand for the innovation
You can have an amazing innovation that solves a problem, execute it well and stay with your strategy, but if there’s no customer demand, then your innovation will flop. Knowing what your customer needs and what they’re prepared to pay is crucial. Many an innovation can languish on the shelves because it’s too expensive for the target market. As well as struggling with being ahead of its time, Google Glass is a prime example of a product that failed to find a market by being too pricey for its customer base.
7. Cultural barriers to innovation
Often seen in mid-size or larger organisations, cultural barriers and silos can become formidable blockers to successful innovation. But regardless of your organisation’s size, if you don’t have a culture that nurtures innovation and the systems to bring it to fruition, your business will be stuck spinning its wheels. Eastman Kodak Company faced serious headwinds after competition from digital cameras disrupted its main market. Gallingly, the company’s own in-house researchers had invented the digital camera in the 1970s. But the idea failed to gain traction for cultural reasons and the business paid a heavy price.
8. Pessimism around innovation
Beware the negative Nancy. If you have people who continually throw shade on every creative idea without good reason, then take note. It could be more about them and a deep-seated fear of change than your innovation team and their ideas. And there’s a good chance someone else, somewhere else is busily working on the innovation, your in-house naysayers are putting the brakes on. Apple Co-founder, Steve Wozniak, sharing his ideas about developing personal computers with his then employer Hewlitt Packard is a legendary example of pessimism around innovation. And it resulted in Hewlitt Packard missing one of the biggest innovation opportunities of all time.[5]
9. Lack of funding or other resources
Last but by no means least is lack of funding and other resources for your innovation. Countless promising innovations end up on the scrap heap because they don’t have the funding, time and people to get off the ground and scale up to success. Indeed, the top reason why Australian start-ups fail is lack of capital.[6]
Avoiding the kiss of death for your innovation
So how do you avoid your innovation being consigned to the dustbin of history? Behind each of the nine reasons for innovation failures was either a lack of customer focus or an internal business issue. Thinking about the problems your customers need solutions for, then providing high-quality innovations at the right price and the right time, will reduce the risk of your innovation failing for customer reasons.
When it comes to internal issues, having an innovation strategy will go a long way to aligning the internal elements your venture will need for successful innovation. For more information about innovation strategies, read our article, Create a winning innovation strategy for your business.
Other internal factors such as issues with the innovation process, quality control, corporate culture and resident naysayers can take longer to iron out. Although it’s the number one reason, lack of capital and resources should never be why your innovation fails. If the R&D behind your innovation is eligible for the R&D Tax Incentive refund, you’re eligible to apply for a Radium Advance. It’s an R&D loan that will give you up to 80% of your expected R&D refund in just a few business days. It’s fast and cash flow friendly with no repayments or fees due until your tax refund arrives to pay off your loan. So that means you have the capital and cash flow to buy the resources you need to keep your R&D on track.
Accepting failure is a life lesson
If you’ve taken steps to mitigate the external and internal risks, but you’re still staring down the barrel of failure, Don’t despair. R&D flops are lessons innovators can and do learn from. Many of our customers have several attempts at innovation before they eventually succeed. And what you may have written off as a failed innovation may turn out to be anything but. Read our article, Five ways to respond when your innovation fails to deliver to discover how you can flip an innovation flop into a winner. If you think we may be able to help you fund your innovation, book a call with one of our R&D financing experts.
[1] 35 Famous Innovation Failures – and What You Can Learn From Them – Braineet. 2023. 35 Famous Innovation Failures – and What You Can Learn From Them – Braineet. [ONLINE] Available at: https://www.braineet.com/blog/innovation-failures
[2] TIME.com. 2023. CueCat – The 50 Worst Inventions – TIME. [ONLINE] Available at: https://content.time.com/time/specials/packages/article/0,28804,1991915_1991909_1991857,00.html.
[3] Econsultancy. 2023. Why Brazil-bound brands should be wary of cultural mistakes. [ONLINE] Available at: https://econsultancy.com/why-brazil-bound-brands-should-be-wary-of-cultural-mistakes/.
[4] Daniel Wörle. 2023. Examples of Innovation Flops that you can learn from. [ONLINE] Available at: https://digitalleadership.com/blog/examples-of-innovation-flops/
[5] Business View. 2023. Insights from Steve Wozniak from the World Business Forum | Business Research and Insights. [ONLINE] Available at: https://business.nab.com.au/insights-from-steve-wozniak-from-the-world-business-forum-sydney-11216/
[6] Lesson at Startup (2021) Latest list of famous failed Australian Startups and Businesses 2019-20 [online] available at: https://lessonsatstartup.com/list-of-famous-failed-australian-startups-and-businesses/