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In this type of research, past failed projects similar to your own solution are examined to find out what went wrong. The aim is to not repeat the same mistakes and use already existing learnings to improve yourthe own solution.
This technique involves exploring "near miss" failures similar to our product idea to generate ideas about what to test and how to build a business model that could work in a second attempt. The goal of this technique is to identify a unique way to angle a product, so that you avoid a previously committed error. You will be introducing the idea at a later time, which will be to your benefit, but it's likely that previous failures will provide you with useful feedback..
Step-by-Step Guide:
- Identify Relevant Failures
Research companies, products, or services in your industry that failed. Focus on those similar to your business or product.
- Analyze the Root Causes
Investigate why they failed. Look for key issues such as product-market fit, mismanagement, poor marketing, or financial problems. Dig deeper into the underlying reasons.
- Compare with Your Situation
Assess if any of the identified failures relate to your business or product. Look for warning signs, parallels, or risk factors.
- Learn from Mistakes
Document the mistakes made and identify what could have been done differently. Use these insights to guide your strategy and avoid similar pitfalls.
- Apply Lessons to Your Business
Use the knowledge gained to improve your own product, strategy, or business model. Proactively adjust based on the identified risks and failures.
Example:
When Netflix transitioned from a DVD rental service to a streaming giant, they took the time to analyze the failures of other companies in the media and technology industries. They learned from past failed ventures like Blockbuster, Napster, and MySpace, understanding what led to their demise.
How Netflix Applied the Method:
- Blockbuster's Failure: Netflix studied how Blockbuster failed to adapt to digital transformation. Blockbuster relied heavily on physical stores and late fees, while Netflix saw the future in digital content and avoided penalizing customers with fees. This insight allowed Netflix to focus on the convenience of online subscriptions and streaming.
- Napster's Legal Issues: Netflix also observed the downfall of Napster, which struggled with legal challenges due to copyright issues. By contrast, Netflix ensured that it developed strong relationships with content creators and studios, making sure their platform complied with all legal standards from the start.
- MySpace's User Experience: Netflix learned from MySpace's inability to provide a seamless user experience, prioritizing simplicity and personalization in its interface. This helped Netflix dominate in user retention and satisfaction.
Why It Was Successful:
Netflix didn’t just innovate; they deliberately avoided the mistakes of other companies that came before them. By analyzing past failures, they could make informed decisions about content licensing, user experience, and digital transformation. This strategic foresight helped Netflix rise to become a leader in the streaming industry, effectively applying the Picnic in the Graveyard method.
#Risk #Competition #Substitution & alternatives
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