10 Companies That Will Fail This Year
January 18, 2006
There's a point in a company's lifecycle where they hit a wall. New products and innovations are slow to come out and the feeling that they are so big nobody can catch them seems to become a company's belief. It's these times when the innovators, the smaller companies, have their window of opportunity to make strides and 2005 saw the beginning of this happening. This is the year though that the big companies stop to take notice and wonder what just happened to their market/mindshare. When I say "fail" I am thinking they won't disappear (although they might), but fail in the sense of what they are trying to achieve and categories they are trying to keep.
1. Microsoft
Microsoft is so far behind in the innovative desktop wars you have to wonder does it even make any sense to continue on with the development of Vista/Longhorn (of course it does, but you still have to wonder). Every new "feature" that they announce seems to have already been implemented in either OS X or Linux and the UI just seems to be made with prettier graphics.
Linux did a great job of distracting Microsoft while OS X was able to come in and start biting away at the mindshare of the public. With Apple using Intels in their computers now, that provides another blow to Microsoft not because you can easily move over from Windows to Mac OS X on your Intel box (you can't easily), but the fact that they use the same hardware will put a lot more at ease who are thinking about making the switch. Now we are on an even playing field, which was something Microsoft always had an advantage over the last couple of years so we will see how they respond.
2. Creative
Their Soundblaster cards will dominate the soundcard market for many years to come, but their mp3 players just can't seem to make a dent in Apple's marketshare. How much press did Creative receive when their new Zen won Best of Show at CES? None.
The problem here is that no matter what you do you look like an iPod knockoff. You want to design something similar, but anything close looks like a clone. I don't know what can be done here, but you have to assume the mighty will fall off sooner or later if you stick around long enough so if Creative just can keep a profit on its Portable business then maybe one day they can catch Apple sleeping.
3. Google
With the introduction of the Google Video Store, Google has shown that they are ready to expand their revenue streams into new areas. However, the problem here is that just launching a capable product isn't going to work when you are competing with companies like Apple. If you compare iTunes to Google Video there really is no comparison. Google stuck with their philosophy of engineers building and designing while Apple continues to innovate and win over customers with design.
For their homepage this philosophy was succesful for Google because their competition was so cluttered, but when entering a different category where the market leader has an easy to use product and the interface is well-designed you have to step it up a bit more than they have the past couple of years.
Look for Yahoo to regain a ton of mindshare this year from Google because they are just as capable of releasing products with the same features, but they seem to have a better understanding of the value aesthetics play in the public's eye.
Another issue to consider here is whether an app is best suited for a desktop application or web-based.
4. SixApart
The smartest move they ever made was the purchase of LiveJournal because I believe that will be their only saving grace. MovableType seems to be a lost cause (does anybody talk about it anymore?) and with the problems TypePad experienced last year you just get the feeling that someone is going to offer a better product and service that allows you to easily move from 6A's platform to their's.
I'm sure there are many out there already, but none of them have really received any hype or publicity. I'm sure many people believe WordPress.com is the best candidate and they probably are if they fix certain issues.
5. Newspapers
I know this isn't one company per se, but there are just too many newspapers that are going to fall apart this year due to their reluctance to embrace the online medium fast enough. Craigslist takes their classified business, while a company like Newsvine will start to take away their local news business. The New York Times company was fortunate enough to have enough money to make some moves in the online space, but the lesser known outfits that aren't owned by one of the big dogs will eventually fade into the oblivion.
Design's Role
I think it's interesting to note that with the first four companies mentioned the design of their products might be their saving grace. In each of their cases the leader in their category (Microsoft still is the marketshare leader obviously) has a better designed product. I think Creative has the most unfortunate luck since they do release strong products, but they are competing against the best design company in the world right now. Also interesting to see that two of Apple's competitors are on this list.
Design is a powerful thing.
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