How to Recognize Failure Patterns: How HP Quit and Apple Won

Recognizing failure patterns is the closest thing an innovator has to seeing the future.

 

If you can recognize the patterns, you can change the future, because most failures are not original. They repeat, and that repetition is the pattern: the same handful of patterns reappearing in one organization after another, decade after decade.

 

This one stings a little.

 

In 2011, Bill Geiser told me, almost word for word, how the project we had spent the past two years building was going to fail. He saw the pattern before I did; I heard him say it, and I never forgot it.

 

The failure still happened.

 

This is not a pre-mortem. A pre-mortem imagines new ways your plan could fail. Recognizing failure patterns means learning from failures that have already happened elsewhere and spotting the early signals before you repeat them, while there is still time to act.

 

By the end of this episode, you will have four patterns in your own library, a five-minute way to check any project against them, and the four steps to take when you find one.

 

Let's get into it.

The Smartwatch We Killed

In 2004, Fossil hired a watch-technology executive named Bill Geiser to help build innovative technology for their watches. A few years later, he and I started spending real time together, me as HP's CTO, him running watch technology at Fossil. Between us, we had an idea we both believed in: a connected wearable, years before anyone used that phrase, co-innovated by HP and Fossil, with each bringing its expertise.

 

Fossil named the resulting platform the MetaWatch. It ran an ultra-low-power processor with a 96 by 96 display, an accelerometer, and Bluetooth. It was designed to last a week on a charge, and it shipped with a full developer kit so anyone could build apps for it. We revealed the partnership in March 2011, at an HP event in China. And between us, we had the one thing Apple did not have in 2011: distribution. HP held roughly ten percent of consumer-electronics shelf space. Fossil sold through twenty thousand retail stores that carried its watches.

 

Bill saw the ending before anyone. He told me in 2011: "Phil, I wouldn't be shocked if Apple evolved the Nano to take advantage of this space. They'll legitimize it in consumers' minds worldwide."

 

So the man building the watch spotted the failure in advance, out loud. And naming it changed nothing.

 

The signs kept arriving in plain sight. HP went through three CEOs in thirteen months. In August 2011, Leo Apotheker killed HP's consumer mobile strategy and WebOS, which removed the platform that made a smartwatch matter to HP at all. The battery lasted three to four hours against the original target of a week. We ran month-long approval cycles for changes that startups could implement in days.

 

Then I went out on medical leave. When I came back six weeks later, HP had killed Palm, WebOS, and the connected wearable project.

 

Here is what the ignored warning turned into. The Apple Watch shipped in April 2015. It sold 4.2 million units in its first quarter, and by that fall Apple was selling three out of every four smartwatches on the planet. The market we walked away from grew from three hundred thousand units in 2012 to forty-five million by 2018, and Apple held fifty-one percent of the market share.

 

The idea was never the hard part. It never is. The hard part is committing.

What Recognizing Failure Patterns Means

Nothing that killed the MetaWat