A company that had a successful product but went bust for not innovating?

Question

At the company that I work we have a successful software product that did well but is now obsolete and unmaintainable. I am trying to explain that you need to innovate and replace this product with new offering in order to survive. I am looking for some good examples of companies that made the mistake that we are close to making - relying on one successful product way over it's normal lifetime, so I could use it as illustration when making an argument.

These products need not be software, emblematic cases that illustrate well this situation but where product was not software are also appreciated.

Answer 1

Netscape. Complete stack - from Web server and other server side software (THAT was crappy) to the browser that got technically sideballed by Microsoft (and no - the windows integration was AFTER they actually won the war).

I was there at that time (working as IT consultant) - Netscape's web browser went from "NICE" to "BLOATWARE" in the time MS IE went from "damn, what a crap" to "actually better than Netscape".

Then Netscape started to totally rewrite their stuff - which meant YEARS without a new version.

Answer 2

VisiCalc for the Apple II was the first spreadsheet program (i.e. 100% market share) and is considered by many the killer app that made owning a computer important for business rather than as a hobby. In that sense, it paved the way for the PC, yet failed to make the transition to that platform well, and was supplated by Lotus 1-2-3 and later Excel.

WordPerfect was for a time the dominant word processing app. It fell prey to a delayed and low-quality move from DOS to Windows.

Answer 3

I guess examples can be found in the (fast moving) gaming industry.

Some companies try to uninspiringly keep selling iterations of a once successful franchise (and releasing horrible sequels in the process).

A known company would be the once big Midway filing bankrupcy ; they were behind the long-running Mortal Kombat series (whose first entries are iconic in many aspects).

Answer 4

Palm -- you can't even hotsync with a 64-bit OS. If they had turned it into a phone .. what would be the difference between that and the iPhone?

Answer 5

Polaroid seems like another good example. The advent of digital imaging and photography just passed them by.

Answer 6

In a word: Evolution

Like every other aspect of life in the world around us, those which cannot adapt, become extinct. Companies, and the people that work for them, are no different. Ignore this at your peril.

Answer 7

MySpace. Not quite bust yet, but the party's been over for awhile.

Answer 8

Facebook is going to have problems soon if they don't change their privacy issues. Facebook also has issues with their interface being worse than it once was. Notifications don't work right. The feed is real wacky.

MySpace and Friendster didn't change fast enough prior to Facebook. Especially MySpace. I don't know what they were thinking with their bloated ad-corrupted interface for so long. They've made a nice adjustment now going for bands and such, but they could have been the dominant player.

Answer 9

In a word: 3DFX

They had a good product but failed to innovate like their competitor, Nvidia.

Answer 10

I see WordPerfect has been mentioned, but there's an even better example: MicroPro.

They developed WordMaster, the first ever Word Processing software, and then WordStar, which was incredibly successful for DOS.

What happened? Windows 3.0 came out. It became popular - ubiquitous, even. MicroPro didn't seem to notice or care. They didn't bother developing a Windows version. They didn't innovate. Eventually they bought and rebranded some other word processing software - but it was too late, Microsoft Word was already out.

Ask the average teenager or even twenty-something today; I doubt that any of them have ever heard of MicroPro or WordStar. They went from having one of the most important products ever made, to bust, simply because they waited too long to update their product suite.

Answer 11

Happens to search engines a lot. In the beginning I used Altavista a lot, then Yahoo a bit and now only Google. Might be switching to Yahoo back soon though.

Experts-Exchange isn't what it used to be. The better alternative (SO) is used a lot more (based on my own search results in Google).

ICQ, replaced by MSN Messenger (in our country).

We've also had this problem in the company I'm working at the moment. We had quite a good CMS (well, a bit more as a CMS, but let's keep it basic). In the years we maintaned and sold it, we always build new stuff in it, but based on the old architecture. Now it's grown so big that no one of us can maintain it anymore (original devs gone and no documentation). That's why we offer alternatives using Sharepoint now.

Answer 12

Companies get bought, products get recycled, renamed, etc., so all depends on the meaning of "going bust". Companies like Novell, Borland, Corel come to mind, but they still seem to exist, though not as important as they used to be.

Pick your favorite from wiki categories Defunct software companies and Companies disestablished in....

Answer 13

DEC (Digital Equipment Corporation) pretty much invented the minicomputer with the PDP and improved on it with the VAX. However, Alpha notwithstanding, they pretty much put all their eggs into the minicomputer basket and (ironically) missed the PC revolution (and when they did try selling a personal computer they went the wrong way). Granted that's a bit of an oversimplification. They were only "saved" by selling themselves.

Answer 14

Digital Equipment Corporation, they dominated the mainframe market with PDP-11's and other similar machines, but they failed to switch to the market of PCs, and in 1998 they were toast. Similar fate befelled SGI.

Answer 15

Sad but True: Borland.

They had a great product (Delphi) and put no innovation in it for about 7 or 8 years. Now they sold it to Embarcadero and they try to rescue what is left.

Answer 16

Have them read The Innovator's Dilemma, by Clayton Christensen - an entire book describing why companies need to replace/cannibalize their own products, before someone else does.

Answer 17

Not really an innovation failure, but a management failure, Commodore was the first to show a personal computer, the first to deliver low-cost computers to the masses, the first to sell a million computers, and the first to arrive with a true multimedia computer. If they had played their cards right, they could have been today’s Apple.

Answer 18

As you might have read, Apple surpassed Microsoft recently (market value). The culprit? According to the article:

"It's more than just Mac versus PC," said Yair Reiner, an analyst at Oppenheimer & Co. Inc. "The market sees Apple as an engine of innovation and growth, but with Microsoft, the vast majority of its profits come from products that been in the market for a long time."

"Microsoft has been the workhorse of the PC revolution, but it's seems that horse is running out of new tricks."

You just have to check the stock price comparison for both companies, and you will see that while Microsoft remained stagnant for TEN FREAKING YEARS, Apple, Inc. started growing rapidly in the later part of 2004. Now it is the bigger player.

Answer 19

SGI

They essentially founded the 3D graphics industry. Then they started sitting back on their laurels and spent the past 15 years withering. Recently their last remaining assets were sold off for peanuts.

Answer 20

I think Blockbuster is a good example of this, albeit not a software company (but that might be more apt for your audience). They dominated the market for years, but it was just the same product and service. Then comes along a new company (Netflix) with a fresh take on movie rentals, and now Blockbuster is all but dead.