Category design isn’t all sunshine and rainbows. Sometimes, categories are dead on arrival, and others, while eventually successful, don’t hit it out of the park on their first try. In fact, many of these “category ideas” go through a tough journey, often evolving in unexpected ways, or fading out completely.
Some categories fade away for good – the losers. Some take a nap, only to reemerge in a new form later on – the snoozers. And then there are those that hang around, constantly evolving and changing, holding promise of a comeback – the schmoozers.
So, what causes this? Many categories fail because they are poorly conceived or executed, leading to huge disappointments despite early adopter enthusiasm and significant investment. Let’s dive into ten cautionary tales of category design, uncovering their strategic flaws, why they didn’t work, and whether they were losers, snoozers, or schmoozers.
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Blockchain for Everything
In the past decade, blockchain was the talk of the town – from cryptocurrency to supply chain tracking, everyone was trying to apply it everywhere. The promise of a decentralized, frictionless future was appealing. But here’s what went wrong…
Strategic Flaw: Blockchain technology was applied across too many industries with unclear use cases or proven benefits.
Why It Failed: Blockchain is not the magic solution for every problem. Many projects overpromised and underdelivered, leading to a lot of wasted resources and disillusionment.
Snoozer: While blockchain has retreated mostly into financial services, other sectors like manufacturing and logistics still hold potential. We’re waiting to see how big players like SAP approach the tech in the future.
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Smart Home Hubs
The idea of a smart home, where devices communicate seamlessly with each other, has been a futuristic dream for decades. The arrival of smart home hubs seemed to be the solution. But the reality didn’t quite match the vision.
Strategic Flaw: Manufacturers launched smart home hubs without ensuring compatibility across various brands and devices.
Why It Failed: Lack of standardization and interoperability left consumers frustrated, unable to connect their devices effectively.
Schmoozer: Now, big tech companies like Google and Amazon are making strides in integrating smart home devices. As use cases normalize, we may see integrated systems become mainstream.
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Wearable Tech
Wearable tech, from smart clothes to wrist-worn devices, seemed destined to revolutionize how we interact with technology. But it wasn’t as easy as strapping a computer to your wrist.
Strategic Flaw: Wearable tech was rushed to market with immature technology that didn’t meet consumer expectations.
Why It Failed: Early wearables had poor battery life, limited functionality, and unreliable performance, which damaged trust and slowed growth.
Schmoozer: It took years, but wearables found their stride with fitness trackers. Companies like Apple made a breakthrough with the Apple Watch, integrating health features that aligned with consumer needs. Wearables are now an essential part of the healthcare tech ecosystem.
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HD DVD
In the early 2000s, HD DVD competed directly with Blu-ray for the next-generation disc format. Despite technical advantages, it was the classic case of a format war that went the wrong way.
Strategic Flaw: Engaging in a format war with Blu-ray without securing industry support or consumer interest.
Why It Failed: Despite having better technical specs, HD DVD couldn’t match Blu-ray’s industry backing, and eventually, lost the format war. But it wasn’t just about the disc – consumers were quickly moving to digital streaming.
Looooser: It’s safe to say HD DVD didn’t survive. Blu-ray may have won the battle, but it was a pyrrhic victory as consumers soon turned to streaming.
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Ultra-HD Blu-ray
Just a few years ago, Ultra-HD Blu-ray came on the scene as an enhanced version of Blu-ray. It seemed like a logical evolution given the rise of HD and 4K displays. But…
Strategic Flaw: Pushing a new physical media format when digital streaming was rapidly overtaking physical media.
Why It Failed: The growing dominance of streaming services like Netflix and Amazon Prime made physical discs less appealing, despite the higher quality offered by Ultra-HD Blu-ray.
Looooser: Ultra-HD Blu-ray couldn’t compete with the convenience and speed of streaming, and it quickly faded into obscurity.
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Standalone VR Headsets
Virtual reality has been the next big thing for decades. Yet, despite multiple attempts to create a successful VR headset, the tech didn’t take off as expected.
Strategic Flaw: Launching standalone VR headsets with limited content and high prices.
Why It Failed: Without enough compelling content or an ecosystem of games and apps, VR headsets were expensive, complex, and not worth the investment for many consumers.
Snoozer: Today, VR is mainly a B2B technology with applications in fields like healthcare and engineering. But consumer-focused VR is still struggling to find its niche.
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Satellite Phones for Mass Market
Satellite phones were once seen as the solution to staying connected anywhere in the world. But in a world dominated by cellular networks, they didn’t quite make the cut.
Strategic Flaw: Attempting to market satellite phones to the general public rather than focusing on niche markets that truly needed them.
Why It Failed: Satellite phones were bulky, expensive, and impractical for most consumers, especially with the rise of cellular networks.
Schmoozer: Satellite phones are now being integrated with existing devices like smartphones, and we’re seeing more affordable options emerge. Apple’s recent partnership with Globalstar shows there’s still potential for this category to thrive in a more realistic form.
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Web Portals (Dot-com Bubble Era)
In the early days of the internet, companies invested heavily in web portals, creating hubs that aggregated emails, search results, and more. What could go wrong? Plenty.
Strategic Flaw: Investing in all-encompassing web portals that didn’t have clear customer value or unique propositions.
Why It Failed: The dot-com bubble burst, and many web portals collapsed because they lacked a distinct purpose and didn’t adapt to the growing importance of search engines like Google.
Loooser: Most web portals from the 90s and early 2000s are gone, but their legacy lives on through the rise of integrated platforms like Google Workspace and Microsoft 365.
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Cryptocurrency Forks and Copycats
In the early days of cryptocurrency, the market was flooded with different versions, forks, and new coins promising to be the next big thing. But not all were created equal.
Strategic Flaw: Flooding the market with similar cryptocurrencies that offered little innovation over established ones.
Why It Failed: There was too much too soon. The market couldn’t sustain this many variations of cryptocurrency, and many failed to gain any significant traction.
Schmoozer: The cryptocurrency market is far from over. We’re still waiting for market maturity or reinvention, but it will likely evolve into something much stronger.
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Windows Phone
Microsoft’s entry into the mobile phone market seemed like a no-brainer. After all, they had the most successful desktop OS in the world. But…
Strategic Flaw: Entering the smartphone market too late with an operating system that lacked a strong app ecosystem and distinct advantages over iOS and Android.
Why It Failed: Windows Phone couldn’t break into a market already dominated by Apple and Android. Microsoft’s partnership with Nokia failed to overcome the already established ecosystems.
Looooser: Windows Phone is a classic case of market hubris. Microsoft eventually pulled the plug, but the company has learned valuable lessons from its mobile misadventure.
What Did We Learn?
The road to successful tech category design is filled with missteps, bad timing, and, of course, a little bit of luck. Many of the categories that failed did so because of strategic miscalculations, poor market readiness, or the inability to create compelling ecosystems.
What we can take away from these cautionary tales is that creating a successful category requires more than just a shiny new idea. It requires understanding market needs, perfecting the technology, and executing relentlessly. While we can’t always predict luck, the discipline of category design can help us avoid many of the pitfalls that led to these tech flops.