Steve Jobs, one of the greatest product innovators of our times, started another company called NeXT Inc. after leaving Apple in 1985. Before leaving Apple, he had amassed vast experience in designing & launching of personal computers such as Macintosh I & Macintosh II. Personal computers were huge fad in USA then.
Steve was a living legend & his fans were eagerly waiting for next gen product innovations. NeXT debuted super computer combined powerful hardware and software in ways that had never been done before.
It was a powerful machine that embodied similar design philosophies to current-day Apple. Even down to its custom circuit board. It was designed & launched for universities & university students who were very tech savvy.
The same wonderful computer failed to resonate with his target audience.
NeXT computer was expensive. Very expensive. While other computers at the time ranged from $700 to a few thousand dollars, the NeXT computer had a base price of $6,500.
The target education market in USA then, had a lot of older computers and limited budgets.
NeXT’s computers never found mass success. So in 1993, NeXT completely stopped developing its hardware and shifted its focus to the real innovation: software.
After Steve’s exit, Apple launched new personal computers targeting general public & even they miserably failed in market.
There’s a myth in business that the best product wins!
That is not true. There is no eleventh commandment that says the best product wins.
There are various reasons why a great product fails.
Market Fit – The ultimate goal of any business is to understand the target market very well & design a product such that the product will sell itself. Even if the product is great but does fit with market needs, then it will not serve its purpose.
Branding – The majority of people understand brands and don’t understand technology. People can never use your product if they’re not aware of it. e pick up an apple or a cookie on the counter because it’s there. How can you design your environment to make those obvious choices the better choices and the non-obvious ones the worse ones.
Pricing – Majority of the buyers use emotions to buy low priced items & use logic to purchase high priced items. Customers expect the benefits derived from that product is higher than the price they have paid for it. Any product with higher price & low ROI is bound to loose interest among the audience.
Buying Process – You have a wonderful product & marketed well, You target audience loves to try it but its not available in nearby store or product is available but there is no after sales service or you may have everything but the buying process is very cumbersome!
Having a great product isn’t a bad thing — it’s fantastic and indisputably one of the best ways to lead the market. But great products alone don’t make for a winning company. How well a product aligns with the buyer’s core use cases, price point, and ideal buying experience will time and time again trump pure product capabilities.
Its not the best product that wins but the best known one that wins !