Why do some companies succeed and others fail? Does the blame fall on the CEO, the Board Members, the employees, the product, bad timing, terrible product positioning, or all of the above? This is the same question that many investors, employees, and users of the Friendster social networking service are asking themselves.
The New York Times published a great article highlighting the explosive rise and calamitous fall of Friendster. The article gives tremendous incite as to why you think of MySpace and not Friendster whenever someone mentions social networking.
Let us begin with a scenario…
Let’s say you’re the CEO of a startup vacuum cleaner company. Your product is a vacuum cleaner that becomes popular because it cleans using a new, more effective system. Word gets out of your amazing vacuum and pretty soon you have over a million orders. Meanwhile, you have an executive board that’s brainstorming how the company can become the next Hoover. Now due to the influx of orders, the factory has increased production. However only the production rate has increase, quality control has not. Before long you get employees and eventually customers complaining that your new, amazing vacuum stops functioning after 30 hours of use. The executive board’s response to the problem is to add more features to the vacuum, like an eight foot extender nozzle.
How would you solve the problem of your short-lived vacuums?
If your response is to postpone the added features and increase quality control, congratulations… you just used commonsense!
Let’s get one thing straight, a business is only as profitable as the product is effective. The best marketing and the most productive brainstorming sessions will not help the bottom line if your product is faulty. Sounds like commonsense, right? Well, it is. It’s just too bad that sometimes corporate executives focus on the “next big thing” and forget commonsense practices.