Google Glass, Amazon Fire, Friendster: Why great ideas from successful companies fail
In the world of business, we tend to believe that success is a direct result of talent, resources, and a “great idea.” We expect that if a company has a track record of dominance, like Google, Amazon, or Apple, they are a sure bet for the next big thing. Yet, the history of innovation is littered with the wreckage of unexpected flops launched by industry giants.
From the futuristic promise of the Segway to the early dominance of MySpace, these failures prove that even a massive war chest and a visionary concept cannot guarantee market survival. Here are some of the traps that companies fall into.
The ‘Solution in Search of a Problem’ Trap
One of the most common reasons for failure is based on “technology push” versus “market pull.” This happens when a company develops a sophisticated piece of technology and then hunts for a problem to solve, rather than starting with a genuine consumer need.
Google Glass is a fine example. Technically, it was a marvel, an engineering feat that brought augmented reality to a wearable form. However, Google failed to articulate why the average person needed it. It lacked a defined purpose. The device made people uncomfortable regarding privacy (the “Glasshole” effect), leading to it being banned in bars and theaters before it even hit mass-market shelves.
Similarly, the Segway was heralded by Steve Jobs and Jeff Bezos as a revolution in urban transport that would “reshape cities.” But for the consumer, it was an expensive, bulky solution to a problem that didn’t exist. It was too fast for sidewalks and too slow for roads. It was a great idea in theory, but a failure in the real world.
The Arrogance of Success Trap
When a company is dominant in one field, it can become blind to its limitations. They try to force the approach of their successful core business into a completely different field.
Amazon’s Fire Phone failed because Amazon treated hardware like its retail platform. They packed the phone with “Dynamic Perspective” (a 3D effect) and “Firefly”—a button to scan products to buy on Amazon. These were clever technical features, but they served Amazon’s needs more than the user’s. Users wanted a robust ecosystem of apps and a reliable interface; they didn’t want a shopping cart in their pocket. Amazon’s immense success in e-commerce blinded them to the specific needs of the smartphone market.
The ‘First Mover’ Trap
It is a common precept that being first to market is an advantage. However, Friendster and MySpace prove that being first is a double-edged sword. Friendster had the great idea of social networking long before Facebook. It failed because it couldn’t handle its own success. The servers crashed constantly, and the site became unusable. This technical failure allowed MySpace to take the lead. But MySpace eventually fell into the same trap: It became cluttered with ads and customizable profiles, failing to evolve its user experience as the audience matured. These companies didn’t fail because their ideas were bad. They failed because they couldn’t scale as demand grew.
The Timing Trap
Bill Gross has studied what makes some start-ups succeed and so many fail. He analyzed the histories of 200 startup companies and compared five factors: the idea, the team, the business model, the funding, and the timing. You can see him relate his findings in his Ted talk, “The single biggest reason why start-ups succeed.”
His findings were striking. The most important factor was timing, then the team, and then the idea. Many startup companies with great teams and innovative business ideas fail because the timing of their launch is unfortunate. And this can be down to luck.
The timing trap applies to big companies too. If you launch a product too early, you have to educate the market which is expensive. If you launch too late, you’re fighting for scraps.
An idea might be great, but the world isn’t ready yet. For example, the online grocery business Webvan failed during the dot-com bubble (Webvan) because high-speed internet and mobile logistics weren’t mature. Twenty years later, the same idea is a multi-billion-dollar industry. Similarly, Google Glass might have succeeded today in an era of TikTok creators and remote assistance, but in 2013, the culture was far more sensitive to “always-on” cameras.
Is it Just Luck?
In his book The Black Swan, Nassim Taleb argues that we often underestimate the role of randomness in success. A sudden shift in the economy, a competitor’s unexpected move, or even a global pandemic can make a “great idea” look like a disaster, or a “mediocre idea” look like a stroke of genius.
Luck plays a role, but “luck” depends on preparation and timing. Successful companies that fail usually have the preparation but miss the timing. They are so focused on their internal roadmap that they lose sight of the external environment.
Lessons for Today’s Leaders
These failed ventures can teach us some powerful lessons:
- Solve a Real Problem: You should be able to explain the problem your product solves in one concise sentence. Leave out buzzwords like revolutionary, ground-breaking, or next-generation.
- Social Context Matters: Technology does not exist in a vacuum. How will people feel when they use it? How will others feel around them?
- Minimun Viable Product: Build a small cheap prototype or model and show it to discerning customers. Ask, “Does it solve your problem?” “Would you pay money for it?” “What needs to change?”
- Kill The Losers: Successful companies often suffer from “sunk cost fallacy.” They keep pouring money into a failing venture because they are too proud to admit the “great idea” isn’t working.
- Agility Over Ego: The ability to pivot is critical. When Slack found that their video games was a flop they switched to producing a communication tool.
A great idea is just a hypothesis. The failures of Google Glass, the Fire Phone, and the Segway teach us that the market is a harsh laboratory. Success requires more than just a breakthrough in engineering. It requires an alignment of cultural timing, user-centric design, and the humility to adapt when reality contradicts your vision. Even the giants can fall. It is vital to look at the world through the eyes of the user and stop admiring your own designs—no matter how brilliant they appear.