Growthink Blog

10 Famous Product Failures And the Advertisements That Did Not Sell Them


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Everyone makes mistakes. When big business makes mistakes, however, it’s typically after they’ve spent millions of dollars on marketing campaigns to let us know about their flawed products.

Here we present the advertisements for ten of the most infamous product failures in history.

 


The Greatest Time to Be an Entrepreneur


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Amidst the daily deluge of negative news regarding current business and economic conditions, it is important to look at the big picture: namely the very bright, long-term outlook for business and entrepreneurship in our global, Internet age. A recent interview with Ted Leonsis – the current Chairman of Revolution Money - a new Web 2.0 payment platform and credit-card service and Vice Chairman Emeritus of AOL (and one of the key executives that fueled AOL's Internet rise in the 1990's), drives this point home.

"It's the greatest time to be an entrepreneur," was Ted's core theme at a recent Wharton Entrepreneurship Conference. Leonsis also made a number of prescient points regarding our current "three-screen world" – a world in which entertainment and commerce play out on computer screens, TVs, and mobile phones:

  • In this new world, consumer expectations are "off the charts." They want everything "great, fast, and free."

  • Today's consumers are a study in contradictions. They have a lot of purchasing power, but little leisure time. They are real estate rich (though increasingly less so), with less cash. Family life is more fractured, and people are overscheduled and on the move. They are watching less TV and living life online more and more. Only 25% of 30-year olds now read newspapers daily. Circulations are in long-term decline at the New York Times, USA Today, the Washington Post and the Wall Street Journal.

  • In contrast, consumers now see the Internet as a "routine and indispensable part of their work and home life, spending 23% of their time hooked up to the Web, compared to seven minutes a day" in 1993.

  • North America now accounts for just 16% of worldwide Internet users, down from 35% in 2000. "If you're building products and services just for the U.S. market, you're giving up 80% of the market," Leonsis says.

  • Leonsis drives home the point that entrepreneurial opportunity has never been greater than it is right now, but by no means is it easy. "While it's never been easier to launch a new world-class business," investor and marketplace expectations are intense. "If you can't grow 25% month over month, we don't think you know what you're doing." If a startup doesn't take off fast, "you fall behind very, very quickly."

 

Just as significant, Leonsis says, is the "happiness business," which involves "getting out of the I, I and I, and really seeing where you want to fit into the bigger world."

At Growthink, we echo Ted Leonis' sentiments that business and entrepreneurship are and can be the best drivers of positive transformation in the world, and that Internet technologies and the global economy are and will accelerate this transformation to dizzying speed.

For more on Ted Leonsis, click here and here.


Federal Government Financing Alternatives


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Entrepreneurs and small companies often overlook two ripe sources for capital: federal grants and loan financing.

But instead of trading equity positions in their companies for thenecessary capital, entrepreneurs and small companies who pursue fundingfrom the Small Business Administration (SBA) and from Small BusinessInvestment Companies (SBICs) donít have to deal with an equitycomponent to their transactions. However, similar to individual ìangelîinvestor and VC financing, companies seeking SBA and SBIC financingneed a strong management team and value proposition, and a credible andexciting business plan to consummate a financing transaction.

That's because an SBA loan, regardless of whether it is a directloan from the SBA, or, more commonly, a bank loan guaranteed by theSBA, is essentially a bank loan. The benefits of it versus atraditional bank loan are that it offers a lower borrowing rate and asomewhat greater ease of attainment for startups and smaller businesses.

In most cases, the SBA will guarantee that 90 percent of the loanwill be repaid to the bank. As such, banks are taking on less risk andcorrespondingly are more flexible with approvals. The SBA does usuallyrequire that the founders of the company personally guarantee the loans.

Alternatively, Small Business Investment Companies (SBICs) areprivately organized corporations that are licensed and regulated by theSBA. Small or emerging businesses which qualify for assistance from theSBIC program can receive equity capital and/or long-term loans fromthese companies. Essentially, these companies provide their owncapital, which is then supplemented by federal funds, to the companiesthey fund.

In a testament to the great "multiplier" value of small businessinvestment, U.S. taxpayers benefit from the SBIC program as taxrevenues generated from successful SBIC investments have more thancovered the cost of the program. Equally impressive, over the last 20years, small businesses have created roughly three out of four net newprivate non-farm U.S. jobs, with a significant percentage of thesebusinesses initially seeded/funded by these government loan programs.


Market Research and The Business Idea


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It's an easy trap to think of market research as a data point collections process when in actuality, it's a creative undertaking where synthesis, strategies, and ideas are paramount.

Market Research - Tips & Ideas


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The tremendous clutter of 21st Century communication creates unique challenges in being heard above the noise when attempting to gather market research data. This is especially true when attempting to gather data via telephone surveying and/or email surveying on a stand-alone basis. For traditional telephone surveying, advanced voicemail and caller ID technologies have significantly reduced the percentage of connected market survey calls.


Nine Business Plan Pitfalls


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In our experience of assisting with their business plans more than 1000 startups, small businesses, middle market and Fortune 500 companies, we have noted the following common business plan pitfalls:

Pitfall #9: Not Including Successful Companies in the Competitive Discussion.


Analysis Paralysis


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Does anyone do "early-stage investing" anymore? When we present deals to "early-stage" investors, we find their criteria to be more in line with the milestones of more established companies, and it sometimes seems like early stage is a non-entity.

I was encouraged by the news of Battelle Ventures and Allied Minds Inc., posted in The Deal here. The author mentions how both firms operate under unique structures which allow them to do true early stage investing in "pre-seed" technologies sourced straight out of research institutions and universities. Battelle only has one LP, the Battelle Memorial Institute, while Allied Minds raises money from shareholders in exchange for future equity with no specified time horizon. Perhaps these "special" circumstances allow them to take on more "risky" investments without having to answer to large numbers of LP's.

It makes me wonder if the traditional VC model actually works. What if traditional VC's could take the handcuffs off and get dirty with raw technologies and mad-scientists out of some futuristic research lab? What sort of companies would we start to see hit the marketplace and how frequent? What about timing issues and market relevancy?

"The greater the level of involvement and business expertise focused on early stage innovation, the more and higher quality of innovation we will see coming out in the marketplace" - Lesa Mitchell- VP for advancing innovation, Kauffman Foundation.

Amen.


7 Keys to Startup Success


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In 1995, Paul Graham co-developed the web-based application, Viaweb, which was subsequently acquired by Yahoo in 1998. Later, in 2002, he conceived a spam filter that inspired most current filters. Paul is currently a partner at Y Combinator, a venture firm that specializes in funding early stage startups.

In a recent article that Graham wrote entitled "The Hardest Lessons for Startups to Learn," Graham offers many insights and lessons that virtually all entrepreneurs can use.


The Business Of Ideas


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The best entrepreneurs and executives at fast-growing companies have the ability to move efficiently and profitably from ideation to execution, and then from execution back to ideation and then back to re-focused execution. And they do so regarding all aspects of their businesses -- marketing and sales, operations and finance.


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