95% of product innovations fail.

This widely-cited, harrowing stat is attributed to Harvard Business School Professor Clayton Christensen in the book “The Innovator's Dilemma”. Yet, each year companies go against the odds and launch more than 30,000 new products. If Christensen is right, that means only 1500 products succeed each year.

Why? Too often, companies approach innovation backward, starting with a technology and looking for a market, instead of starting with a market need and developing the right solution.

Many organizations fall into the trap of believing "if we build it, they will come." They assume that if they create a new product, the market will naturally follow. But technology-driven innovation without understanding market needs is risky, expensive, and often unsuccessful.

The alternative? Market-driven innovation. Companies that prioritize market research, customer insights, and industry trends reduce risk, increase commercialization success, and ensure long-term growth.

The Pitfalls of Technology-Driven Innovation

Technology-driven innovation starts with capability rather than demand. A company realizes it can build something new and assumes there will be demand for it. This approach often sounds visionary:

“We have the technology to do this, so let’s build it.”

“If we create it, the market will come.”

While some revolutionary breakthroughs have emerged from this strategy, most technology-first innovations fail because they don’t align with actual market needs. Some notable examples of innovation failures include the Segway, Google Glass, the Osborne Executive computer, and the Juicero.

When Technology Outpaces Market Demand

Consider industrial automation. In recent years, manufacturers have developed augmented reality (AR) tools for machine maintenance, allowing technicians to view real-time repair data through smart glasses. The technology seemed transformative, but adoption has been slow. Why?

• Market research revealed that frontline workers weren’t comfortable wearing AR devices for long periods.
• Traditional diagnostic tools were already solving the problem effectively.
• Companies weren’t willing to invest in expensive, unproven hardware.

Despite AR’s potential, the market wasn’t ready—or willing—to embrace it.

This is the fundamental risk of technology-driven innovation:

• Just because something is possible doesn’t mean it’s necessary.
• Companies that fail to validate demand risk launching products that never gain traction.

Why Market-Driven Innovation Wins

Market-driven innovation starts with research, not assumptions. Instead of pushing technology for its own sake, companies focus on:

• Identifying real industry pain points.
• Analyzing trends and competitive gaps.
• Assessing revenue potential before investing in R&D.

By taking this approach, businesses increase commercialization success and minimize wasted investment.

Traditional Voice of Customer (VOC) research plays a vital role in identifying opportunities for improvement. However, if you’re seeking market share gains, it is essential to augment VOC with market research. Customer insights will reveal pain points, wish lists, and emerging trends—they must be validated by the market. Often, the reason companies have strong wallet share and loyalty but struggle to capture market share is because their offering doesn’t align with market needs.

For companies exploring new categories, technologies, or industries, it's critical to complement customer feedback with broader market intelligence and field research and observation. Companies that successfully innovate understand not just what current customers want, but what target customers in adjacent markets will benefit from.

Example: Hydrogen-Powered Forklifts

Unlike AR in industrial maintenance, hydrogen-powered forklifts gained rapid traction because they solved a known market problem. Warehouse operators needed:

• Faster refueling times than traditional electric forklifts.
• Emission-free alternatives to gas-powered models.
• Longer operational cycles without downtime.

Hydrogen technology already existed, but it wasn't until market research identified these needs that companies like Doosan Bobcat, Hyundai, and Plug Power, successfully commercialized the innovation.

The lesson? Technology alone isn’t enough—market insight is critical.

• Market-driven innovation reduces uncertainty and increases success rates.
• Technology-driven innovation is riskier and can lead to expensive failures.

The Bottom Line

Innovation without insight is just a gamble. While technology can open exciting possibilities, it’s market-driven innovation that consistently delivers commercial success. By starting with real-world needs, validated through research and observation, companies can avoid costly missteps and bring to market solutions that matter.

Whether you’re launching a new product, entering an adjacent market, or evaluating emerging technologies, the question isn’t “What can we build?” but rather, “What does the market truly need?”