Why Do Good Companies Make Bad Products?

When I first started as an analyst, my cousin asked me a fairly basic question: "isn't all your analysis positive? Why would a company deliberately ship a bad product?" I was reminded of this question as I worked my way through several products over the past few weeks that definitely are not getting positive reviews.

Before I explain how a good company can make a bad product, let's stop for a second and remember that in some cases, that some bad products are not actually bad products, they just were not designed to appeal to you. One thing that reviewers and analysts always need to keep in mind is that everyone has a built in bias – and I'm not talking about cases of intentional bias or "fanboi-ism," just the reality that some of us are old, some young, some will buy anything that's pink, some hate pink, some have large hands, and some small.

For example, if I was evaluating Motorola's Flipout without proper context, I'd say it's a terrible phone: the twisting screen requires rotating the whole device for no apparent reason, it is too wide to hold easily as a phone, and the square display means that some Android apps don't run. However, the Flipout is aimed at teenagers, not 40 year old consumer device analysts (yeah, I turned 40 last week. I'm old now). So I showed it to my focus group of teenagers, and, as I suspected they might, they loved it. Square phones are in, swinging the screen around is reportedly "fun," and they loved the fact that it has both a full QWERTY keyboard and a touchscreen – the width didn't bother them one bit.

Other times, the product isn't bad, per se, it just isn't competitive with the other products on the market because it is priced wrong or because the market is saturated and this product does not bring anything uniquely valuable to the table. This is something I see all the time, and helping companies understand where their product fits in the market (as opposed to where they think it should fit in the market) is one of the key services a market analyst can provide.

But what about when it is genuinely a terrible product? How did it get to market? And why would a company try to sell a product that they know is awful? I have identified five main causes; I'll start with two here and finish the list next time.

Performs to Spec

The product is terrible, but it does exactly what the spec called for, so the company thinks its great and can't understand the criticism. This usually happens when products are designed by engineers or software developers, and are only shown to and tested by other engineers or software developers. Here are some telltale signs that this is the problem:

• There is no genuine consumer need for the product

• Features that consumers expect in a product of this type are missing

• No regular consumer could use the product without a six month training course

Fixing this problem is relatively straightforward: bring in professional product managers and give them the authority to do their jobs.

I'll Show You

The product is obviously a horrible idea, but it was the pet project of the CEO. Nobody was willing to contradict him throughout the development process (or their objections were ignored). In fact, the CEO still thinks it's a great product and that he'll be proven right in time. This happens a lot with CEOs who have had success in the past bucking conventional wisdom. They are used to people telling them that their idea is crazy, have come to enjoy their reputation as an "out of the box thinker" or "maverick," and may have even come to consider negative feedback akin to validation. This is compounded by the reality that doing something genuinely different is often only way to reap outsized rewards and achieve exceptional growth. The problem is that conventional wisdom is correct some of the time.

Unfortunately, there is no easy solution here – sometimes you have try crazy things. Sometimes they fail. The best you can hope for is to learn from them.

In my next column, I'll talk about the innovator's dilemma, incomplete solution sets, and three reasons a company might ship a product before it is ready.