Have you been part of a project that failed? Why do you think that happened?

One of the most frustrating experiences I've had as a software developer is to be part of a project that's doom to failure.

Some of the reasons for the failures I've witnessed are:

1. The business model of the software company doesn't allow for the flexibility needed to build the right software and have profit.
2. Lack of feedback from the real-world.

I think Reason 1 is most common when working with fixed quotes. What happens is that a client says he wants an app that does X, and the software company says it will cost Y$. But the truth is that the client doesn't know what X should do, with enough detail, to solve the problem they want to solve. This is perfectly normal since software development is a discovery process, and therefore we'll never know all we'll need before starting. The result is a quote that soon enough stops making sense, but that bounded both parties to building something useless. This creates a rigid environment that makes changing the course of a project so it can be useful and feasible extremely hard, since changing scope has financial implications. The renegotiations tend to drag so much and be so hostile that the project gets canceled.

I've seen reason 2 happen when there's a lack of feedback from the end-user of the app. In situations like this, the client is not the end-user but assumes the role. The problem is that the client can't faithfully represent the user and doesn't communicate with him/her nearly enough. The result is building something that isn't useful to the user, or the client gets analysis paralysis and can't decide on what needs to be developed. Either way, the budget runs out before something useful is ever produced.

Have you been in a project that failed? Why do you think it failed?