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Success of New Products: Getting Over the Tipping Point

http://www.businessweek.com/technology/content/jun2006/tc20060629_411177.htm

There are many factors that contribute to the popularity of a product; one key component that was discussed in class was the number of users already using the product, because people judge products in an environment with network effects. The article was about Google and its initial stage of product launching a couple years back; it highlighted the problems that Google may face as they push forward one new product after another within the year. Also the fact that at the time, the usage and sales of the then new products were low, and the main success was still the main search engine. The central concern for Google at the time was whether its series of new products and launches would fail and bring down the overall image of the company, despite its success as the search engine powerhouse.

Nevertheless, the article was a couple years old. Looking back now, it’s easy to say that many of Google’s endeavors were successful, such as the Google docs and the Google chat, we know now that those products would be successful because so many users now use it, but back then Google had to take the risk with these products. The way they measured the success of the products was based on the logs and feedback of the products. Like what was stressed in class, having a sense of where the “tipping point” for a product would be very significant to the company developing the product because that’s an unstable point where any slight deviation downward would cause further decline in the popularity of the product. Thus, if companies such as Google had a slight sense of where the “tipping point” might lay for a product, then it can employ strategies to try and eliminate the tipping point through methods such as altering the product itself, or change advertising and promotions. Overall, it is significant to take into account the fact that people are affected by the decisions of others, and that under usual circumstances with products, higher number of people using it will make it more valuable even if intrinsically the value of the product is the same.

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