Commercializing Technological Innovation: Learning from Failures in High-Tech Markets*

Commercialization is known to be a critical stage of the technological innovation process, mainly because of the high risks and costs that it entails. Despite this, many scholars consider it to be often the least well managed phase of the entire innovation process, and there is ample empirical evidence corroborating this belief. In high-tech markets, the difficulties encountered by firms in commercializing technological innovation are exacerbated by the volatility, interconnectedness, and proliferation of new technologies that characterize such markets. This is clearly evinced by the abundance of new high-tech products that fail on the market chiefly due to poor commercialization. Yet there is no clear understanding, in management theory and practice, of how commercialization decisions influence the market failure of new high-tech products. Drawing on research in innovation management, diffusion of innovation, and marketing, this article shows how commercialization decisions can influence consumer acceptance of a new high-tech product in two major ways: (i) by affecting the extent to which the players in the innovation's adoption network support the new product; (ii) by affecting the post-purchase attitude early adopters develop toward the innovation, and hence the type of word-of-mouth (positive or negative) they disseminate among later adopters. Lack of support from the adoption network is found to be an especially critical cause of failure for systemic innovations, while a negative post-purchase attitude of early adopters is a more significant determinant of market failure for radical innovations. There follows a historical analysis of eight innovations launched on consumer high-tech markets (Apple Newton, IBM PC-Junior, Tom Tom GO, Sony Walkman, 3DO Interactive Multiplayer, Sony MiniDisc, Palm Pilot, and Nintendo NES), which illustrates how commercialization decisions (i.e., timing, targeting and positioning, inter-firm relationships, product configuration, distribution, advertising, and pricing) can determine lack of support from the innovation's adoption network and a negative post-purchase attitude of early adopters. The results of this work provide useful insights for improving the commercialization decisions of product and marketing managers operating in high-technology markets, helping them avoid errors that are precursors of market failure. It is also hoped the article will inform further research aimed at identifying, theoretically and empirically, other possible causes of poor customer acceptance in high-tech markets.