Why do most products fail at the initial stage and what to do about it?


Any entrepreneur, when they decide to launch a startup, realizes that their project may never become a full-fledged business that can hold out on the market in a profitable status for many years. Below we decided to reveal the issues of startup viability in more detail and tell our readers what is often the reason for startup failures.

Some Statistics to Check 

First, let’s answer the question: what percentage of new products fail in the marketplace? In particular, to understand the riskiness of your project, let’s take a look at a few statistical facts:

  • 45% of new startups fail during the first five years;
  • 65% of new startups fail during the first ten years;
  • 10-20% of startups stay alive over the long term.

If we discard such serious reasons when the products fail as the lack of funding and the departure of key specialists from the team, we can conclude that the main problem that entails this event is the lack of proper preparation and the wrong strategy for further development. Let's see what exactly the gaps can be.

5 Issues You Have to Overcome

Unfortunately, not all problems can be solved or prevented on your own. Sometimes they depend on those factors that you cannot influence, and therefore you just have to put up with failures. At the same time, there are those that you can anticipate in advance and develop strategies for dealing with them.

So, what are these issues of product failure? Below, we will consider the most significant five of them.

Fast Project Growth Which It Is Hard to Cope With

Imagine that you have already launched your product on the market, and it turned out to be even more in demand than you could initially imagine. Instead of a small local production, you now urgently need to implement a strategy for mass launching your products without compromising their level of quality. Sounds very inspiring, which, however, sometimes turns out to be an unattainable goal for teams in practice.

Indeed, many projects that have met with overwhelming success in the early stages of their presence on the market do not have a well-thought-out strategy for further development. We will not remind you how important it is to have the necessary financial and human resources to maintain the new pace of production, we will just say that sometimes even this is not enough to achieve success.

The fact is that mass sales imply not only the need to expand the staff and purchase new premises and equipment that will be used for serial production and marketing of goods. It is also important here to be able to properly organize internal business processes so that their implementation does not become unprofitable in relation to the profits received. Moreover, some projects are initially unable to become mass-produced due to the complexity of automating the processes that accompany the production.

Conclusion: you need to prepare for potential success no less carefully than for possible failures.

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Too Much of Bad Users’ Feedback

Unlike launching a minimum viable product (MVP), startups should not have significant shortcomings, which, as in the case of MVP, are aimed at obtaining constructive feedback from real users. In short, a startup is not a test sample of your business idea that will be tested on people who are ready to face some problems in the process of using it. On the contrary, it should be a full-fledged product that should be better and cooler than everything that your target audience has used before.

Therefore, to protect yourself from a failed product launch, try to plan the timeline in such a way that even if you need to launch it as quickly as possible, it will have the proper quality and perform all the stated tasks without any problems that the vast majority of your users may encounter. For example, if we are talking about software, it is important not only to thoroughly test it for bugs and ensure compliance with industry standards but also to make sure that it is compatible with all popular operating systems. Otherwise, you risk getting a lot of bad reviews that will put an end to the further development of your project.

Conclusion: to prevent product launch failures, even if you need to reduce time-to-market as far as possible, take the time to make sure that your target audience can use it without problems.

New Product Features Become Useless

After launching the first version of your project, you will probably have to enrich it with new, more advanced functionality from time to time to maintain its competitiveness and encourage the target audience to make new purchases. However, unfortunately, these updates can cause failed product launches. 

The fact is that if your next new feature is generated by a brainstorm with the wrong set of issues, its results may also turn out to be lost. That’s why it’s so important to be able “to walk in your customers’ shoes” or, even better, dedicate a separate phase of your project development process to collecting real feedback and opinions about what your potential users need.

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Users Don’t Know How to Deal with Your Product

The answer to the question: “Why does a new product fail?” can also be an ambiguous understanding of how your product can be used. This is especially true for “multiple-in-one” products, which have such extensive functionality that is difficult to be correctly presented to new users in a short promotional video.

If you want a quick guide to best practices for promoting these products, just check out the Barbie doll ad campaigns in the early 2000s —  even though the target audience for this product was children, their parents instantly devastated the shelves of toy stores after the next ad on TV with a new doll, equipped with brand-new add-ons that made its use beyond the standard “dress-up and comb”.

There’s No Market Segment to Cover

Although the presence of the target audience at first glance seems obvious, in practice, you will not always be able to predict whether your prospective customers will buy your product at the price you specify. Especially when it comes to innovative ones. Therefore, situations when a new product failed are so common.

The point is that when you conduct marketing research, you are looking at the ideal cause-and-effect relationships to guarantee your product's demand. For example, you know that the automotive industry is not well-developed in your local market, and then you decide to start mass production of cars with characteristics that are not inferior to cars of the same price segment from well-known manufacturers. However, in reality, it may turn out that no one wants to buy a no-name just because there are time-tested analogs that will definitely not offer their customers a “pig in a poke”.

That is why it is so important before starting work on a project to check whether your target audience will really be ready to buy your products at the price that will be profitable for you. 

Final Thoughts

Let's summarize the above about the issues that may cause product failure. Unfortunately, taking into account the above risks is not as difficult as actually eliminating them in practice. If you want to enlist the support of a reliable technology partner who will help you build a sustainable and viable strategy for creating and developing your brand-new product, feel free to contact us. Our portfolio includes more than a hundred successfully implemented projects. We have also dedicated over 240 hours of consulting to startups. Therefore, you can be sure that our cooperation will bring positive results to your project as well.


According to statistics, 45% of new startups fail during the first five years, and 65% fail during the first ten years. Only 10-20% of startups stay alive over the long term.

The main reasons for startup failures include the lack of proper preparation and the wrong strategy for further development. Other issues include fast project growth which is hard to cope with, too much negative user feedback, new product features becoming useless, users not knowing how to deal with the product, and there being no market segment to cover.

To prevent product launch failures, it is important to thoroughly test the product for bugs, ensure compliance with industry standards, and make sure it is compatible with popular operating systems. It is also crucial to collect real feedback and opinions from potential users to understand their needs and expectations. Additionally, providing clear instructions and demonstrations on how to use the product can help prevent user confusion. Finally, conducting market research to identify a viable market segment and pricing the product appropriately can also contribute to a successful product launch.

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