HBR On Strategy
The 6 Forces of Failure—and How to Protect Your Company from Them
· Summarized
Key takeaways
- Fail fast and learn from the six identified forces of failure to improve business outcomes.
- Ensure product-market fit by validating demand early and avoiding premature scaling.
- Build strong, knowledgeable teams with expertise relevant to your industry.
- Timing is crucial; adapt to market changes and recognize opportunities and threats promptly.
- Stay informed about your competitors and differentiate your offerings effectively.
- Select early customers wisely to foster product success and broader market acceptance.
Summary
Introduction to the Failure Museum and its Lessons
The episode opens by introducing the Failure Museum, founded by Sean Jacobson, which houses over 1,000 relics of failed business ventures. These failures, from quirky products like Heinz ketchup cookbooks to corporate flops like Bix pencils for women, serve as educational tools for business leaders. Jacobson highlights the importance of learning from these failures to avoid costly mistakes in the future.
The Six Forces of Failure
Sean Jacobson discusses the six key factors that lead to business failure, supported by examples from his collection. These include product-market fit issues, team mistakes, poor financial management, bad timing, fierce competition, and failure to understand customer success. Each factor is illustrated with specific examples, such as WebVan's overambitious delivery service, Theranos' lack of domain expertise, and Google Glass's misjudged early user base.
Case Studies of Failed Ventures and Products
The episode reviews several notable failures, including WebVan's unsustainable business model, Theranos' collapse due to insufficient data and expertise, and Google's missteps with Google Glass. It also covers WeWork's failed expansion model during the pandemic, Blockbuster's missed opportunity with Netflix, and other examples to emphasize lessons learned about market timing, customer focus, and competitive awareness.
Lessons and Key Takeaways for Business Leaders
The discussion underscores that understanding these failure forces can help companies anticipate and mitigate risks. Critical lessons include validating product-market fit before scaling, assembling a knowledgeable team, timing market entry wisely, and staying vigilant about competitive threats. Jacobson advocates for learning from failures to build more resilient and successful enterprises.
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Show notes
What can failures like Harley-Davidson Cologne or Cheetos Lip Balm teach us about success? Sean Jacobsohn, partner at Norwest Venture Partners and founder of the Failure Museum, takes us on a tour of notable product failures, sharing insights into why they failed and the lessons we can learn from them. Discover the six forces of failure and learn how companies can avoid making the same mistakes.
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