What Went Wrong...
Examining the missteps of various software products across industries reveals common pitfalls that can derail even the most promising innovations. From inadequate market research and poor user experience design to insufficient testing and failure to adapt to technological advancements, these challenges underscore the importance of thorough planning and execution. The following section outlines specific cases, offering insights into how these factors contributed to their downfall and the lessons that can be gleaned to inform future endeavors.
Available Lessons:
200
BitConnect Lending Program
CryptoTech
BitConnect
A Ponzi scheme disguised as a crypto lending program collapsed, leading to regulatory shutdowns and legal actions.
WHAT WENT WRONG
Lack of transparency in the lending process
Misleading marketing practices to attract users
SIGNALS MISSED
Warnings from regulators about fraudulent activities
User complaints about suspicious payout mechanisms
HOW COULD THEY HAVE AVOIDED THIS
Building a legitimate product with transparent practices
Engaging regulators to ensure compliance
TEAMS INVOLVED
Product, Marketing, CEO, Legal
Mt. Gox Cryptocurrency Exchange
CryptoTech
Mt. Gox
The exchange collapsed due to poor security practices, resulting in a massive hack that lost customer funds.
WHAT WENT WRONG
Lack of robust security protocols and monitoring tools
Delayed responses to known vulnerabilities
SIGNALS MISSED
Early reports of minor breaches ignored
Lack of transparency about missing funds
HOW COULD THEY HAVE AVOIDED THIS
Implementing multi-layered security measures
Conducting regular audits and penetration testing
TEAMS INVOLVED
Product, Engineering, Operations, Security
Victoria’s Secret Digital Fitting Room
FashionTech
Victoria’s Secret
A digital fitting room experience failed due to inaccurate size recommendations and a lack of consumer trust in the technology.
WHAT WENT WRONG
Poor algorithm accuracy for body measurements
Limited options for user feedback to refine results
SIGNALS MISSED
Feedback highlighting frequent size mismatches
Low engagement rates among online shoppers
HOW COULD THEY HAVE AVOIDED THIS
Feedback highlighting frequent size mismatches
Low engagement rates among online shoppers
TEAMS INVOLVED
Product, AI, Engineering, Marketing
Celsius Lending Platform
CryptoTech
Celsius Network
A crypto lending platform collapsed due to poor risk management and over-leveraged positions.
WHAT WENT WRONG
Lack of diversified risk in lending portfolios
Poor transparency with users about financial stability
SIGNALS MISSED
Early user concerns about withdrawal restrictions
Red flags during market downturns
HOW COULD THEY HAVE AVOIDED THIS
Improving risk management frameworks
Increasing transparency about financial practices
TEAMS INVOLVED
Product, Risk Management, CEO, Customer Success
TerraUSD Stablecoin
CryptoTech
Terra (Terraform Labs)
An algorithmic stablecoin collapsed due to poor design in its stabilization mechanism, wiping out billions in investor funds.
WHAT WENT WRONG
Overreliance on an unstable algorithmic peg mechanism
Lack of contingency for market volatility
SIGNALS MISSED
Early warnings about risks in the peg structure
Concerns from analysts about scalability during market downturns
HOW COULD THEY HAVE AVOIDED THIS
Designing a hybrid stabilization mechanism with diversified collateral
Conducting real-world stress tests before scaling
TEAMS INVOLVED
Product, Engineering, Risk Management, CEO
Forever 21 e-Commerce Revamp (2019)
FashionTech
Forever 21
A website overhaul intended to modernize its e-commerce presence failed due to technical issues and poor user experience.
WHAT WENT WRONG
Slow page load times and frequent site crashes
Poor search functionality and navigation
SIGNALS MISSED
High abandonment rates during checkout
Customer complaints about difficulties finding products
HOW COULD THEY HAVE AVOIDED THIS
Conducting extensive usability testing before launch
Ensuring robust site performance under peak traffic
TEAMS INVOLVED
Product, Engineering, Marketing, QA