Emergic: Rajesh Jain's Blog

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Blog Past: One Reason Why Companies Fail

March 6th, 2011 · 2 Comments

From a blog post a year ago:

One of the reasons companies fail (and I have also gone through my share of failures) is that we do not reset starting assumptions against the market realities. Let me explain.

We start off with some ideas, and assumptions about the market. Once we take the product out into the market, we get feedback – about customers’ expectations and market size. It is at that time that we need to think about some course alteration – in case there is a mismatch. Many times, we don’t do that – working under the principle that our efforts will accelerate the market’s response towards our product. That rarely happens. What follows is disappointment.

It is never easy changing one’s assumptions quickly, especially when one has been thinking about them for a long time. But they should be exactly that – just starting assumptions.

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2 responses so far ↓

  • 1 Wrenj // Mar 6, 2011 at 8:12 pm

    Agreed. I have come to accept that every story of success, in individual lives and in businesses is explained by a formula. It’s unique to each success story and cannot be replicated, though there may be common elements with other stories.

    However, as time passes, markets shift and a new formula is needed. However, it’s hard abandoning the thinking and habits that have developed out of the old formula.

    And so the business enters into decline. Leaders should remember the phase of search for the success formula (though they may have never articulated it as such.)

    The organization must return to it’s roots of searching for new markets all over again.

  • 2 Gaurav Sharma // Mar 7, 2011 at 7:17 pm

    Just don’t assume. Marketing Research can help. It’s like fitting three blocks together.

    1) What I think customer wants (that the product has)-a,b,z
    2) What I want-Profit
    3) What the customer really wants-x,y,z

    a,b,z can be made to look like x,y,z; it can be seen as a,y,z using Advertising. a,b,z can be changed to x,b,z using Development. But, what if x,y,z becomes 1,2,3 tomorrow?

    It’s about evolution of the market, people and their needs.

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