While we’re all for positivity here at Innovolo, we also appreciate the benefits of looking at failures to inform future success.
That’s why we’ve compiled this list of the top 10 most common reasons that new product ventures fail. If you’re in the early stages of product design, be sure to use these lessons to inform your roadmap to launch!
Lack of Product Necessity
Before going any further, ask yourself: is there a need for my product in the market? If not, then it won’t sell or succeed no matter how much effort or investment you put into it. This is commonly referred to as “product-market fit” in product design circles – so write that term down, and don’t forget it!
Underestimating Product Development Costs
It’s easy to underestimate the costs of converting a concept to a physical product. For consumer products, you have to create prototypes, test products, and make informed decisions about materials and manufacturing methods. Even digital products have costs, too – like consultations, development, and testing.
Burt Rutan, an American aerospace engineer once famously said that “Testing leads to failure, and failure leads to understanding.” That’s why testing is both one of the scariest and most important steps in the design process. Testing might force you to face some hard truths, but it’s the only way to make improvements and develop the best possible product.
Lack of Quality Control
As a project manager, you often have to think like a consumer, too. There’s nothing worse than ordering a package from an e-store, waiting patiently for a week for it to arrive, and then finding out that the product is defective, missing parts, or lacks functionality. Those problems, from the project manager’s perspective, should be addressed in the quality control phase. You need to determine that your product can be produced repeatedly and consistently at the right level of quality.
Sometimes, entrepreneurs and product owners get caught up in their own buzz-worthy headlines. While normally done with good intentions, it’s important not to over-promise and trick customers into buying your product. If your testing indicates that battery life for your Bluetooth-based speaker technology lasts 6 hours under regular conditions, it’s imperative you don’t try to stretch that advertised battery life. Think of what you advertise as a way to set expectations for your product rather than over-promise on features.
Sometimes, less truly is more. It’s an adage that’s all too important for product design. So many developers struggle with feature creep – when unnecessary features get crammed into a product in an attempt to make it “better.” Instead, try to focus on a few important features that make the biggest contributions to customer satisfaction rather than stuffing it full of features and not giving each one enough attention.
Running Out of Money
We’ve said it before, and we’ll say it again – cashflow is one of the biggest killers of startup businesses (and especially product development). Make sure you monitor exactly how much money you spend (and when you spend it) versus how much investment or revenue is available to cover your commitments. For startup ventures that operate on slim margins, a simple timing mismatch can be a death sentence: a big invoice can hit you while payment is still in collections, leaving you cash-strapped and forced into bankruptcy.
When you finally get to the product launch, make sure your product is priced appropriately. After months or years of development, you might be so attached to your product that you can’t possibly bring yourself to price your product at a reasonable level. The truth is that many project managers spend too little time with market research to estimate a fair product price that’s in line with industry standards. Pricing is also related to every other factor on this list – by controlling costs and being diligent in development, you can lower the overall cost of production and have better control of your launch price.
Insufficient Profit Margin
Profit margin is a crucial financial indicator that tells a product owner how well his or her finances are doing. It tells you how much net income you earn from each new sale (factoring in your costs for manufacturing and development). A healthy profit margin is important so that you can plan for business growth and future improvements to your products.
Modern-day marketing is easier and more efficient than ever. With new technologies that let you focus your advertisements on specific demographics and customer groups, there’s no excuse not to make digital marketing an essential part of your product launch cycle. To do this, be sure to get ahead of the curve and start marketing your product early. You should know your audience (market research helps!) and emphasise the important benefits that your product provides. These proactive and efficient marketing techniques will ensure that your product stays fresh in the minds of your consumers even after the product launch.
Why leave it to chance?
For every one product failure on this list, there’s another ten that you need to look out for. With everything else going on during your product development, how can you possibly keep track?
So don’t leave your product development to chance alone. Get in touch with us for a consultation before you make any of the critical errors so that your product development can work seamlessly.