Why do the Majority of New Products Fail? How to Avoid a Product Launch Flop

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Welcome to today's episode.

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Our guest today is Narek.

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He is an author, an entrepreneur and a keynote speaker.

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Welcome to the show.

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Thanks for having me.

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Why don't we start by you sharing with us a minute or two about who you are and what you do?

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in what you do.

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Sure, I'm Narek.

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I'm the CEO and co-founder of this company called Prelaunchcom, and what we do?

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We help creators, innovators and innovative minds to validate their products and have data-driven decisions.

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So, basically, to understand if the creative concepts that they have in mind, whether they have viability to move into the markets or to the next steps and only after to invest money in producing that.

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That makes a lot of sense, a highly needed service in my mind.

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So why don't we jump right in and can you share a story with us about some of the best marketing you've done, the marketing that you're most proud of?

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Sure, we're a startup, we don't have that much resources.

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We always try to optimize and then try to get the most effectiveness on all the activities and events that we're participating.

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And recently we were participating in an expo.

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It was actually one of the biggest expos in the world called CES, held in Las Vegas, and our goal was to get attention.

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But we're a small startup, we don't have much budget and in that expo, like, we're competing with Google, with Samsung, with Sony, with pretty much all the biggest Fortune 500 brands who were building literally houses in there, and then we needed somehow to get attention and there was just no way that we could just get a better boot and everybody would come to us.

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So what we did was pretty creative and then we got the result out of it.

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We created a wall and then we started to display the biggest failures from these companies and we found these products because, essentially, what Preloads does?

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It helps companies to not to fail right, like we give them the data, we validate the data and we help all these companies to make data-driven decisions to not to fail.

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So we decided that that would be a cool idea if we show the biggest failures in the history and from Amazon, from Samsung, from TCL, from all the biggest companies, from Harley-Davidson all these funky and funny products that from time to time they created and they fail.

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We found them from eBay, from private collections.

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We displayed them all in this wall.

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We called it a gallery of flops and we wrote use pre-launch to not appear on this wall, and it was really funny and attention-grabbing at the same time, and we literally have stolen the show, I could say, because there always was a big line of people from those companies also, that they were coming checking it out.

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Like Harley Davidson produced this perfume back then and Twitter produced a very funny smartphone which you could only tweet using that smartphone, and obviously it felt like there was this very funny mask that you could put and remove wrinkles, but it was so scary that nobody ever used it.

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So it's really fun.

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You can check it out.

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We got tons of publicity, tons of attention from media.

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All the biggest media, like TechCrunch, wrote three articles about us.

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Daily Mail, the Wire everybody covered it for free, of course, and that was it.

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Hopefully we didn't get any suitcases or nobody sued us.

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So that was it.

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Hopefully we didn't get any suitcases or nobody sued us.

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So that was the danger, but yeah, it worked.

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With a small budget, we got like tons of attention, tons of publicity and, of course, clients as well.

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Were you able?

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to get a lot of meetings with people.

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Because of having the gallery of flops, Were you able to get a lot of meetings with people and stand out from the 100,000 other people who were there?

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Absolutely absolutely, we are the only gallery of Flops Like anybody could remember us.

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Like we're saying, hey, we're the guys from the gallery of Flops and then literally everybody would recognize oh, these are you guys.

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It was so funny, we enjoyed it so much.

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The people, the designers who designed actually those products, were coming and taking photos with those products and then sharing in social media, etc.

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It got a lot of attention and, of course, from all this attention and all this traffic, we were able to identify these key players who then tried to ask okay, what you guys do, how you could prevent us from failure.

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And then the pre-launch pitch started afterwards because it organically was so smooth and what we do.

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We have a very revolutionary and transformative method where people are putting down a small amount of money and that prevents them from failure because it's a real purchase intent and, yeah, it made sense.

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We got a lot of clients, big enterprise clients, and it was a really interesting market.

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Did you have products on there like the Microsoft Zune?

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What was your favorite flop on the wall?

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We had Microsoft Zune there.

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We got this Harley-Davidson perfume.

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We got TCS.

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It's called Palm Phone.

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It's the smallest phone in the world, but it's so small that basically you can't use it.

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It's just super small.

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My favorite of all time is Twitter's smartphone, which was called Twitter Peak, that you could only tweet.

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You should carry another phone with you, used only for tweeting.

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Wow, that's fantastic.

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Congratulations.

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That is a remarkable way to stand out at a massive event like CES.

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I absolutely love the guerrilla aspect to that and I think that's the one thing that marketers and product marketing people never want to be in the gallery of flops.

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I think that's a great positioning.

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So talk to us a little bit about avoiding that and having products that flop what you're doing with prelaunchcom.

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How do you guys help people avoid that?

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So before prelaunchcom, I had a marketing agency and we tried literally all the ways of research, trying to use all the surveys, focus group and all the conventional methods, and I can tell you that nothing works right Because still 80, 90% of the products still are failing that are launched into the markets.

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And what we are doing differently is that we take or pre-launch people put down a small amount of deposits to prove their ski in the game, to prove their real buying intent, and as a result, they would get some incentives, some discount, if these products are actually released into the market.

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Right, so you know who your actual buyers are.

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In this case, you display your concepts at an early stage, see whether people buy it or don't buy it, learn who are your customers, get tons of feedback from those guys Like they help you literally to co-create these products together with them, and then you both know whether it works or not, what's your pricing, what's your positioning strategies, how you can improve the product, and you already have a very loyal community and customer base that will help you and become your ambassadors when you launch the products, if you decide to eventually launch.

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This makes so much sense to us because we help a lot of companies already to do data-driven decisions and invest into the products using the data that we have.

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That can save literally hundreds of thousands of dollars for individual creators or even big companies, Because this way they will avoid working in isolation and relying too much on their gut feelings which in many cases are wrong and making data-driven decisions to move forward confidently.

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So do you guys do this by helping people look at things in a number of different ways, including, like, the positioning of the product, and then, after they've looked at that, look at the pricing of the product?

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Do you help look at different dimensions like that to get to the right answer of if it's going to be a flop or not?

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It's a data-driven data platform analytical tool and we have a lot of A-B testings methods which make it a lot more convenient for you to do a lot of testings.

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Do iterations understand the positioning separately, pricing separately, and then what we do?

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Also, we use AI to squeeze these hidden insights that are out there and they could be just not noticeable from regular people if you go and read all these transcripts, et cetera, and then with the AI, we clusterize all these learnings, understand what segments are out there, who are the customer personas, what use cases they have, why they buy and also why they don't buy, like those groups who, for some reason, they don't put reservation deposit.

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We also ask them a lot of questions to understand what will make them buy.

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This gives you really rich data on the goals that you need to talk before moving to the next stage.

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So I thought about other tools that I've seen over the last 10 years, like Product Hunt, but that is more.

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Like you just announced, you have a new product here.

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It is right, it's not necessarily testing the new product idea right, exactly, product Hunt, crowdfunding platforms, kickstarter, indiegogo they all are great, but it's too late.

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When you go to those platforms, it's already too late.

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You already have put down like resources, energy, money, time to build those products.

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Pre-launch is the first step to launch.

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This is how we position it.

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It's the first thing that you need to do before you move to the next stage, before you even start the prototyping right?

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Because prototyping, especially when it's talking about the hardware, it's really expensive and could cost easily $100,000.

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So, before that, when you have the design, when you have the concept, why not seeing how people feel about it, whether people are ready to pay, and even if people are putting down $1, that's 10 times more credible than 100 people give you like best of the opinions that they got.

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So what happens?

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Let me ask you this You're working with a lot of clients who are using the platform.

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What have you seen?

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When people are either able to validate their idea or they get feedback saying, hey, this doesn't really make sense?

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What happens with the clients when they get the results?

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I'm just curious.

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Yeah, the good thing with pre-launch is that it's not a binary just yes or no.

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It's validated or it's not validated.

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It's more of an iterative process on how you could improve your product and get the maximum out there and then you decide if that would make sense to launch or not.

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Still, the vast majority doesn't launch the products.

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If we say, about 60% is prevented from launching their products because it's too risky, it doesn't make sense and most probably they will become flops and might appear in our wall later on.

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But we're saving them tons of money.

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It's still considered a success from everybody's point of view.

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Right, and that's the cool thing.

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And then, small amount of people.

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The amount of people who just validate their products right away is really small and it's very rarely.

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When you see everything is working amazingly, even for the best products from the best companies, you would see that a lot of things work great, but there's some nuances that need fine tuning.

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Right, you need to.

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The pricing is great, the positioning is great, but the markets these markets are not the best markets.

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To start with.

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You might change your market or the product characteristic or something like that.

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So in all the cases, what we see, there is something to improve and then with this improvement it puts significantly impact to the overall product performance.

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Sometimes it can be just increasing the pricing.

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It's not always just decrease the price.

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We helped a lot of people to go into the market with increased price and then that gave them another margins.

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It's really interesting that 60% don't get validated, because a lot of times, like you're saying, the key is what not to do.

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What do you need to do to avoid a flop.

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I think that's really interesting.

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And it's also really interesting that almost all of the ideas need some refinement.

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I think people know that when they launch a product, they're like this is the first version or we're going to do better things over time to understand which enhancements you need to make first right, Based on feedback from people versus just trying to take it from your gut right.

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Absolutely, Especially in the software.

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I think it's very common and many people and companies are using this agile and lean methodologies.

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But especially in the hardware, in the CPG, in the apparel sectors, it's not that way.

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People are working in isolation, putting a lot of resources, energy and timing into making the products and then making stocks.

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If you're going to Amazon and then they go only relying on their gut feeling, because creators are optimists and they always bet for the best scenarios, but it's not always the case.

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And they always bet for the best scenarios, but it's not always the case.

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And even if it's a great product, you would go and then improve it with the version 2 because you will get all the feedbacks from version 1.

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But why not avoid this version 1, which wouldn't go that great, and right away launch the version 2, taking into account all the feedbacks that you could get at an early stage?

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David Pérez Awesome.

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So my final question is what advice do you give marketers and business leaders about how to avoid being on the wall of flops other than become a customer?

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But outside of that, what sort of advice do you give people on how not to have a flop?

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Yeah, privilege is a tool to make it convenient, to give you benchmarks so you understand how you're doing your data, etc.

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But overall, this is a kind of mindset and this is an approach which we advocate a lot for people to just make data-driven decisions and also take into account the data.

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What kind of data is that?

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You can do it with the other tools.

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You can combine your website, some other tools and then basically get the data, and it's really important to understand how the data is collected and whether people who provided this data, whether they had the skin in the game.

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Like this is how you check the authenticity of the results, because in most of the cases, it's just opinionated.

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It's very subjective and people are getting incentivized for giving feedback and this might be your live product and you should take data seriously.

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What is the hardest thing about doing this?

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that you see across clients about doing this that you see across clients.

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The hardest thing is to face the truth, especially when you're faced when you have a lot of hopes and a lot of and already have toured a lot of time and energy.

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You have been building these products for six years and then you understand that it doesn't make sense for the market.

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Customers just don't buy it, right?

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It's really hard for us also to see this disappointment in creators, but it's taking really short and very quickly.

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They are recovering and they understand that probably we saved them from much bigger failures and disappointment that they would get if they would go to the market with this strategy and these products.

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In this case it's much smaller.

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It's not considered a failure.

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It's considered just experiment or iteration and usually it helps you.

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If you're creative enough, you just start again.

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All right.

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Thank you very much for sharing your story and all this advice.

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I think this is amazing product marketing advice for those marketers who want to be remarkable.

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So thank you for sharing this with us today and appreciate you being on the show.

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I encourage everyone to share this episode with your friends, and I always like to end episodes by saying marketing is never easy, but it should always be fun.

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So thank you for highlighting another area that is not easy, but it should be fun.