I have seen this hoary chestnut quoted by every marketing professor I have ever met…but, is this true? Nobody seems to have a reference for the paper that expounds this bit of wisdom!
If the failure rate for new products were actually so high, would not our local “Dollar” stores be flooded with merchandise?
Anybody know the source of this truism? 
It’s true*
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*80% of all statements are false.
87.5% of all statistics are made up on the spot.
Interesting, yet doubtful. See above post.
Ah, so if 80% of statements are false, and 87.5% of statistics are made up on the spot, then only 20% of genuine statistics are true.
20% of 12.5% is 2.5%. So we can conclude that only 2.5% of statistics are accurate. I never realised the percentage was that high.
Slightly more usefully, in the software industry something like 20-25% of software projects fail to deliver a useable product. The exact figure varies depending on which study you read.
Oh, and the dollar stores aren’t flooded because if a product is unsuccessful it is unlikely to be produced in quantity.
Fail HOW? Fail to meet the demands of the market? Fail as in break? Fail to be built on time? Fail to earn the profit that was predicted for them?
Since you mentioned that ‘marketing’ profs told you this, I’m thinking that they have a different definition of failure.
If you mean “at some point in their use, they fail”, then for some types of products that could be true, because many products are used UNTIL they fail.
But if you mean “They are shipped with defects”, then it’s clearly false.
In short, we need a better definition.
I’m assuming that ‘failure’ in this context means failure to pick-up steam and become ingrained in either the general market or a significant niche.
Since we are talking about marketing, I’d agree this is a fair assumption.
I would guess that the figure is roughly correct, after doing no research. When I think of all the hmmm, say pepsi variants that have been tried and are no longer made-
pepsi am
crystal pepsi
pepsi Kona
pepsi free
It seems that there must be lots of products that hit the shelves in your local grocery store, are carried for a few months, and then quietly disappear.
Sam, I think it quite clear that it means “Fail to become commercially viable products.”
Of course, “80%” is just a round number plucked out of midair, and is obviously not based on any objective evidence. It is generally true, however, that a lot of new products that get beyond the design stage and into the marketing stage never become commerically viable.
However, this is largely a product of the specific industry. It may be true that soft drink companies fail with most new introductions. On the other hand, a factory that designs and manufactures plastic bottles will almost never have a new product “Fail” because they will never design a new bottle UNLESS a customer approaches them and asks them to do so. Customer consumables like soft drinks might fail 80% of the time, but I doubt ALL products sold include an 80% success rate. Most new products are industrial inputs, which generally are not designed and produced unless specifically ordered.
This, of course, only counts the products that reach the shelves. For every one of these there are many more ideas developed to one degree or another which never make it to production.
The way I have always heard the statistic put is that for every 100 inventions, only 10 of them ever finds the backing, timing, and niche to make a product. And of these, ony 10% ever finds enough of these things to become profitable. And then of these ony 10% “makes it big”.
Notice the lovely symmetry? 10% of 10% of 10%… It must be true. 
I don’t think it’s plucked out of midair. It would seem a reapplication of Pareto’s Law, which was originally an economic theory that 20% of the population earns 80% of the income. It get’s reapplied a lot. For example at my old company they used to claim that 20% of our customers were responsible for 80% of our revenue (note the distinction of customers like WalMart and Krogers versus consumers). It’s also known as the 80/20 rule. In our software projects we used to talk about getting 80% of the project done with the first 20% of effort, and then you spend a lot of time refining things.
Originally by Uncivil
This would be making the assumption that the truth/falseness of statements are evenly distributed between made up/genuine statistics. I think you’ll find that 75% of the time, this just isn’t true. 92% of the time 88% of genuine statistics are just the opposite, making them 12% of the other 45%.
Here is a link*.
*please note, I never said it was a link supporting anything I said. For the humor impaired, everything beyond the first sentence is utter BS. Including this.
Do you have a cite for that please?