Root Causes of Product Failures
Launching a new product isn’t an easy thing. There is no telling whether it would become a hit or a miss. A sizable proportion of new launches fail, according to research.
A failed product isn’t necessarily one that gets pulled from the market or leads to the demise of its maker instantly. Any product that fails to produce any meaningful financial return may qualify for this description. As much as 45 percent of new launches are believed to fall in this category.
Why do so many new products fail? Let’s consider some of the major causes.
Cause #1: Wrong Source of Ideas
The journey to a product failure often begins from the source of ideas. Where or who do we look to for them?
In many companies, the bulk of the ideas come from investors, business owners, or executives. They say, “He who pays the piper calls the tune.” There are also the major customers with big accounts or the sales team to chip in on what we should do.
In all of this, the product team practically has no voice. It simply has to run with whatever the top-level put before it. This essentially results in a disempowered team and that’s certainly not what we need to create a winning solution.
Cause #2: Unsound Business Cases
Companies come up with a business case for every item for prioritization. When doing business cases, we have to consider the cost of building and how much money we are going to make. It is necessary to ensure that the cost of building isn’t too high so that we can be competitive in our pricing.
While business cases may help, especially for ideas requiring large investments, they could impact adversely on our roadmaps and ability to create great products. It is hard to guess right how much we’re going to make or how much a product will cost to build upfront.
Yet, because we feel the need for business cases to prioritize our roadmaps, we are forced to do them all the same. We end up prioritizing based on estimates that may be way off the mark. This can make a product fail.
Cause #3: Poor Planning
That takes us to our roadmap. We can become carried away and fill it with features that don’t really contribute to having a clear idea of the big picture. The features that excite us so much to be included in the roadmap might not have a similar effect on the customer. Essentially, we may end up with an ordered list of features that have been requested by different stakeholders. Customers might not use many of these if we built them.
It isn’t always a case of customers not wanting certain features, however. They might actually desire them but we could find out too late that we cannot deliver due to high costs or extremely difficult execution. In some cases, it could take longer than expected to get a feature right.
Cause #4: Reduced Product Role
When products are stakeholder-driven or Sales-driven, it is safe to say that the approach project-centric. Product is given the ideas and funds plus the order to deliver the goods – they are consultants, not owners, beholden to the observations and priorities of others.
Essentially, product management is reduced to project management. Product managers become primarily responsible for gathering and documenting requirements to be handed over to engineering. It shouldn’t be surprising when products that come out of such arrangements fail.
Cause #5: Under-utilization of Engineers
Often, products fail because companies fail to make good use of the engineering team. We could make the mistake of only bringing in the engineers when it’s time for coding. That is too late in the process!
The engineering team has a lot to offer us. We would have missed a large chunk of that when we delay in bringing them in. If we only depend on them for coding, we’d be missing so much in terms of innovation. Launches can fail due to a lack of innovation.
Cause #6: Delayed Validation
This is more a characteristic of companies running a Waterfall process. They take their time to build and do QA testing before putting the product before the customer. Basically, customer validation is put at or near the end.
If we did this, we put ourselves at a high risk of failure. We would have thus created a product that we are unsure whether the customer wants it or not. If they don’t want it, we may have to settle for a loss.
Cause #7: Teams Not Empowered
It is interesting the number of companies claiming to use Agile methodologies. Yet, what some do in practice is more Waterfall. Product teams do not play a key part in idea generation and engineers almost solely do coding.
Rather than applying them organization-wide, Lean/Agile principles are considered a thing for the development or engineering team. The methodologies are viewed in light of delivery, thereby reducing their efficacy in promoting the development of winning products.
To lower the chances of product failures, product discovery must receive more attention. We need to first of all determine what the right thing to build is before we can think of building it right. The process, which should ideally be continuous, entails trying to understand the customer and their needs. It shifts our attention from shipping features to solving problems.
