Anyone remember when Google came out with smart glasses, thinking it would be super competitive in the market? No one? Not a surprise—it failed pretty massively. And that’s coming from a company like Google which has all the resources it needs to afford top-of-the-line market researchers, designers, promotion, etc. So if large, well-established companies can still release new products that fail, how are startups expected to survive?

Unfortunately, there’s a lot of reasons a new product may fail in the market. We’re going to break down the top five reasons and, more importantly, give you tips on how to make your new product successful. Let’s jump in!

5 Reasons New Products Fail

Launching a new product into the market is one of the most exciting days in any company’s history. In fact, even making it to market is quite the accomplishment. Only 40% of developed products make it to market and of those 40%, only 60% will generate any revenue at all.

New category requires too much education

Many new companies hope to differentiate themselves from their competition by creating a new market category. Unfortunately, it’s not enough to just define a new category and have the general market understand why your product is unique and going to solve their problems. People need to be properly educated and convinced that you are solving a specific need that isn’t being met in the market. Moreover, consumers need to believe that your product is truly a unique value add and that the existing competition isn’t able to stack up. If there’s not sufficient education materials or they don’t provide a compelling enough argument to support your category creation, consumers will continue to stick with the companies they’re already familiar with.

Weak product launch

Releasing a product is an exciting event for any company and deserves attention. However, it’s not enough to just celebrate the launch itself. Instead, there’s a lot of time that needs to be spent on promotion and brand awareness to create support for the product. A limited budget and promotional push, coupled with a lack of social media attention and user support is a recipe for product failure. Without growing brand awareness and general product promotion, there won’t be a demand for your product.

Prolonged development

The other side of a weak product launch can actually come from taking too long or delaying the product launch. If too much times passes between identifying a gap in the market and launching your product, customer needs may have changed, another company may have found a potential solution, or the economic market itself could shift. Be cognizant of market shifts during product development to ensure you’re launching your product at an optimal time and haven’t missed the mark.

Poor pricing structure

Pricing is one of the most important elements of a product. Companies rely on the revenue from their product to stay afloat. If a product is undervalued, the company is losing out on potential additional income. Or if the product is overvalued, you’re likely not receiving money in the first place. Companies need to understand the value of their product compared to market competitors to determine an exact pricing advantage that’s sustainable for that value. It’s also important to note that this price may fluctuate as the market shifts, new products enter the competition, and product updates are released.

Fails to deliver sufficient value

For all the hype and support a company may drum up for its product, at the end of the day the product needs to deliver on its promised value or risk market failure. Customers have high expectations and with the state of technology these days, one person can spread a negative review to thousands instantly. While most new product may have a small hiccup or two, if your product has multiple issues that aren’t addressed quickly and efficiently, it’s likely your users are going to make it known to others. Ensuring a positive user experience is essential to avoiding product failure.

5 Strategies to Prevent Your New Product from Failing

Now that we’ve covered some of the top reasons new products may fail to survive their launch, let’s cover some strategies that you can use to prevent your product from the same fate.

Research and understand your competitors

You shouldn’t let your competition guide your roadmap, but understanding the competitive landscape is important to figuring out where you fit in. Do you have competitors who are solving the same problem that you solve in a similar way? If so, you’ll need to find ways to differentiate yourself. Perhaps your solution will target smaller companies, while your main competitor targets the enterprise. Or maybe your competitors have robust, but complex solutions, and your approach is simpler. You need to find the opportunity space in the market and craft your product strategy to capture it.

Analyze your market

“Market” in this context means the external environment that your product exists in. And competition is just one aspect of this external environment. In addition to competition, look at things like the regulatory environment and how changes might impact your strategy. What changes are happening in your customers’ industries that might impact their solution needs? What other non-competitive or complementary products are used by your target persona? Are there ways that you can leverage integrations or partnerships with these other products? And what other early stage players that might not be competitors now have the potential to come in and disrupt the market. How does the broader economic environment impact your prospects for growth?

There are a lot of market factors that may impact your strategy. In earlier days, when you’re more resource-constrained, you may only focus on a few key factors. As your business grows, market analysis will become a more important factor in the long term growth of your business, and you’ll likely invest more resources.

Define your product vision

Your product vision is a high-level, aspirational statement that explains the why of your product. The distinction between what and why is important. Your product vision shouldn’t be a statement of what your product is, it’s a statement of why your product matters. How will your product improve your target persona’s life? How will it impact their business? Your product vision should be bold and ambitious, because it will serve as your north star to keep you moving in the right direction as you encounter the inevitable twists and turns of building a SaaS business. Your vision shouldn’t be something easily achievable. If it’s too easy, won’t make a big enough impact on your customers and won’t differentiate you from your competitors.

Work on a clear product positioning statement

With an understanding of your vision and your customers, you’re now ready to use those learnings to develop a clear, concise positioning statement. There are a number of different positioning frameworks that you can use to help develop your positioning statement. But ultimately an effective positioning statement describes who your solution is for, how it helps and how your solution is differentiated from your competition. This exercise isn’t supposed to be easy, but if you’re really struggling to fill in any of those key components, it’s probably a good idea to stop there and ask yourself why you’re having trouble positioning your product. You may need to revisit one of the first couple of steps in the product strategy framework to resolve any gaps in your positioning.

Understand your customer’s problem and needs

Once you understand the high-level vision for your product, you need to develop a deep understanding of your target customers. A persona exercise is an effective approach to developing this understanding of your target customers. Start by defining specifically who your customer is. What are their goals? How do they define success? What are the pain points and challenges that they face every day? And are they willing to pay for solutions that could solve these pain points and challenges?

Answering these questions will help you understand much more clearly how your product fits in, the value that it provides and how it will improve your customers’ lives. After all, if your product won’t have a major impact on your target customer, and make their day-to-day easier, they probably won’t find it valuable enough to keep using, and paying, for it.

While you can begin your persona definition through research and reading, there’s absolutely no substitute for speaking directly to your target customers. So once you’ve built an initial understanding of them, set up user interviews to dig in deeper. These conversations can also be a great way to establish relationships that you can use to win early customers as your product comes to market. Without understanding customer needs, you can’t establish a product strategy or understand your market.

How User Success Can Help

User Success is a business strategy that focuses on driving engagement, retention, and lifetime loyalty by creating personalized customer experiences through targeted user behavior trends, rather than account association.

So what does User Success do for you? Once you make it to your product launch, it’s essential to understand how your users are moving through the product, discovering any product friction that exists, as well as being more proactive in providing users with information they can use throughout their customer journey. You can do this by developing segmented user personas based on characteristics that actually matter to your team, such as activity level or satisfaction scores, to gain a deeper understanding of your user base that an account-level view can’t provide you. This means that you can drive higher levels of engagement with key personas to become an indispensable part of your users daily workflow. The goal being that your users will remain loyal to your product even after they leave the company they’re at, opening up an entirely new stream of growth.


Releasing a new product into the world is one of the most exciting days for a company. In order to ensure your product’s success in the market, it’s important to take the time to properly understand the gaps in the market that your product is going to solve. And moreover, you need to understand exactly how your customers expect you to solve their needs. Once the product is live, User Success can help you track the behavioral trends of key user personas so that you never have to wonder how users are using your product or what they need to succeed. This ensures that your product is going to survive not just its launch, but drive lifelong loyalty from your users.

P.S. launching the product is only half the battle—then you have to get people actually using your product. Check out some of our tips and tricks for product adoption here!