“Developing successful products is an art and a science. The Innovator’s Guide to Growth provides practical guidance for companies seeking to bring their expertise and experience together in an efficient way to better design and develop breakthrough products.”
– Dondeena Bradley, Vice President, Nutrition, PepsiCo.

“Innovation for growth is a road map that business needs to meet today’s global challenges. This book is a great guide to making it happen. A must-read.”
– Arkadi Kuhlmann, CEO, ING Direct

Scott D. Anthony's latest blog posts

Lessons from Clear's Failure

Posted by Scott Anthony on June 29, 2009

About two months ago, a colleague convinced me to sign up for Verified Identity Pass' Clear service. I dutifully filled in the forms, had the company capture my fingerprints and take pictures of my iris, forked over a couple hundred bucks, and received my Clear pass in the mail.

I wouldn't quite say the Clear card changed my life, but the next couple months of travel (at airports that had special Clear lines) were a breeze. I made at least one flight because of Clear. I started recommending the service to my colleagues.

Then, last week, a sad email arrived in my inbox:

"At 11:00 p.m. PST today, Clear will cease operations. Clear's parent company, Verified Identity Pass, Inc. has been unable to negotiate an agreement with its senior creditor to continue operations."

I'm honestly not all that surprised at this outcome. Clear was a beautiful technological solution. The machines worked reliably, processing my fingerprints almost instantaneously. The service delivered on its value proposition.

But I couldn't help but notice how Clear employees always outnumbered Clear customers in my visits to Boston, New York, Washington, D.C., and Cincinnati.

While I have no inside knowledge about Verified's operations, I'm willing to wager that the company fell into two traps that make it hard for innovators to build new growth businesses.

1. Trusting what customers say. I bet that the company did market research where it described the service to customers and said, "Would you buy this?" Less time in line? Just a couple hundred dollars? Sure, why not. But what a customer says and what that customer does are often two very different things.

2. Focusing too much on "can we" instead of "should we." It's easy for a company to focus all of its attention on developing rock-solid technological solutions. But that can lead companies to squander tens of millions of dollars producing something that people won't actually buy. As I describe in Chapter 6 of The Silver Lining, it's critical for companies to test strategic assumptions early and often, because more often than not, missing those strategic assumptions is what causes companies to fail.

Of course, it couldn't help that Clear began to come of age in a rotten economy. But I'm willing to wager that a more staged path with lower up-front investment would have given Clear a longer runway and maximized its long-term chances of success.

—Scott D. Anthony

Scott's blog on Harvard Business Publishing Online.