History is littered with companies and products that should have been the next big thing, but ended up on the scrap heap. But why is this and what lessons can we learn from the past to make sure our businesses and services don’t go the same way?

For every success story in the world of business, there are probably a hundred times as many failures. Some businesses and products are awful and destined to end up forgotten forever – it’s often the founders that are the last to realise. But there are some products that are better then the competition, yet they still end up in obscurity – why is this?

It’s usually down to not scoping out the competition and misjudging public opinion. These are the last two things you should ever do when launching a new product, but they are mistakes made time and time again. Let’s take Sony’s Betamax as an example. Sony released the format in 1975, aiming to be the top format for home film viewing. They were quickly followed by JVC and their VHS format.

So, we had a battle on our hands – Betamax vs VHS. Sony were confident of winning hands down, they had a much higher quality product and they thought this would be enough to beat the poorer quality VHS into submission. The problem was, Sony didn’t realise that it was irrelevant which product was technically better – in any case, the VHS wasn’t terrible. Sure the Betamax was superior, but it wasn’t so much better that it made the VHS a non viable technology.

When the battle lines were drawn, VHS played the game and they played it smartly. They made their product cheaper and went to the film studios and made it clear that the market would be more responsive to a cheaper product of decent quality, rather than an expensive product of high quality – and the Betamax was damn expensive. The vast amount of studios were sold by the JVC pitch and they gave their backing to the VHS, giving the poorer quality product a much bigger choice of titles than the Betamax. In these conditions, the Betamax format died a pretty quick death. A superior quality product, but one that was beaten badly by the smart thinking of JVC.

Many marketers have analysed why the Betamax vs VHS battle ended in this way - but I think it is pretty simple. In the case of a home entertainment product like Betamax or VHS, it is the price and number of titles that is important, not the quality. This was lost on Sony at the time and was a source of huge embarrassment and soul searching after the event. Wisely for Sony, they learnt their lesson with the release of both CD and DVD, buying out the biggest major record label of the day, CBS, as well as Columbia Pictures – a nice little back catalogue to utilise for both formats.

The lesson to be learnt here, and Sony sure as hell learnt it with subsequent efforts, is that it’s all about judging public opinion and meeting a need – not over egging things and providing too much product at too high a price. The modern day testament to this is the iPod – not as good as some of the competition, but backed with bigger library of songs to utilise and a much better marketing campaign to match.

Hopefully I’ve mentioned a few points for you to remember if you’re launching your own product into the market – one more important one – don’t wait around for the competition, seize the initiative!