Why So Many Product Launches Fail

Pivot International  |   December 30, 2016

You’ve doubtless heard the oft-repeated statistic that 80 percent of new products fail. In some cases, this failure rate is quoted as high as 95 percent.

While this extremely high rate of failure is up for debate, most professionals and academics agree that a majority of new products do, in fact, fail to earn $7.5 million in their first year, as the Harvard Business Review reports.

This isn’t the most encouraging news for new product developers. However, there is some good news: most of these failures are due to a set of fairly predictable scenarios. If you’re ramping up for a product launch, do yourself a favor by taking a look at these causes for failure and ensuring that your company isn’t falling into one of them.

The market doesn’t need your product.

Even the best, most revolutionary product will fail if there is no real need for it in the market.

How do you know if there’s a need? There’s only one way: thorough market research. The problem is that many product developers – even large companies, sometimes – fail to do enough market research. This results in products that don’t have a broad enough appeal to survive long-term in the market.

Takeaway: Invest in extensive market research for your new product before you put all your resources into developing it.

The company can’t scale up quickly enough to meet growing demand.

Some product failures aren’t due to a lack of consumer interest. Lots of failures occur because a product achieves more success than the company can manage.

For independent inventors and small product-development companies, this is a serious consideration. Scaling up is a complex process that involves more than simply manufacturing more units of your product.

For example, if you’re manufacturing your product in a low-volume facility, you may have to switch manufacturers. That could mean changing from domestic production to global, which means that you may not be able to provide the oversight that you once did.

If your product’s quality suffers as a result, you’ll start losing those enthusiastic customers. It’s vital, therefore, to have some kind of plan in place in case your product takes off and you have to scale up quickly.

In addition, even if you have a plan to scale up, there’s the risk that you may not be able to do it quickly enough.

Building a product from development through manufacture takes significant resources, and the return on that investment – money you make from shipping and selling the product – can take some time to manifest.

This time length can be terribly challenging for new developing firms, and is often underestimated. This, in turn, causes too slow of a scale up due to a simple lack of resources.

Takeaway: Spend time developing a plan for scaling up quickly if your product is a great success. Locate alternative suppliers, manufacturers, and distributors who can handle larger volumes, and be prepared to wait some time to begin making your investment back.

The product launches before it’s ready.

While sticking to a launch date deadline is important, there are certain cases when it will serve you better to push back a deadline rather than to release an imperfect product.

This is especially true when there’s a lot of hype around your product. Take Windows Vista, for example, the frequently-maligned Microsoft operating system that never really took off. Microsoft hyped Vista for months, building up customers’ expectations to an unrealistic level.

When Vista launched, it fell far short of those expectations. It was slow, full of bugs, and did little to change the computing paradigm.

There’s no way to know whether waiting until Vista was perfected would have helped the product succeed – maybe it was just a bad product. But releasing it when it still had issues that needed to be fixed undoubtedly made Vista’s situation worse.

Takeaway: Make sure you’ve tested your product, addressed any major usage or aesthetic issues, and re-tested the product before you launch it on a large scale.

Some product launch failures are impossible to predict. Even products that seem to be foolproof and poised for great success can fail for no understandable reason.

However, most products that fail do so because they fall into one of these three traps. When you’re working on your next product, take the time to evaluate whether any of these scenarios apply. If any do, you’ll do well to address the issues now, and increase your chances of success down the line.