Why Products Fail: Product Launches Black Hole (Part 3 of 4)

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If you have been building products for a while, you have been there. At some point in your career, it happened. So let’s talk about it.
Welcome to the third issue of a 4-part series about why products fail and how to avoid it.

Here are 4 big reasons why your product might fail:

1. Failure in premise: You picked the wrong problem to solve.

2. Failure in execution: You picked the right problem to solve, but you built the wrong solution.

3. Failure in launch: You picked the right problem to solve, you built the right solution, but you launched it wrong.

4. Failure in scalability: You built a product that works initially but fails to scale with increased users or complexity.

In this issue, we will focus on the second type of failure, the failure in launch.

My Baptism by Fire: Turning Free to Fee

When I embarked on transforming an on-demand platform into a SaaS, the challenge wasn't just about technology; it was about convincing users to embrace a new way of accessing our services. This meant shifting from free access to a subscription model, a move that could easily backfire.

I still vividly remember the knots in my stomach as we geared up to flip the switches and launch our subscription service. Asking loyal users to pay for additional services was never going to win us popularity contests. But building lasting business viability meant biting this bullet.

I struggled to turn off the voice screaming we weren't truly ready yet, that critical gaps remained in both product and strategy. My fears seemed to be confirmed when on launch day, the reception was lukewarm.

A "Failure in Launch" occurs when a product that has the potential to be successful does not realize that potential because of how it is introduced to and perceived by the market.

This type of failure is particularly frustrating because it occurs after significant investment in product development and often arises from factors that are, in theory, more controllable than those in earlier stages of product development.

When and Why Does “Failure in Launch” Occur?

A "failure to launch" typically occurs due to a mix of strategic missteps and market-related issues:

Strategic issues:

• Inadequate Market Understanding: Failing to grasp the target market's needs, preferences, or behaviors.

• Misaligned Marketing Strategy: An ineffective marketing campaign that fails to clearly communicate the product's value or reach the intended audience.

• Unprepared for Demand: If interest is generated but the company cannot handle the volume, this leads to technical/quality issues, customer service problems, and brand damage.

Market-related issues:

• Poor Timing: This could stem from external conditions, like an economic downturn, or internal factors like rushing to market before your product is fully ready.

• Overpromising: Setting unrealistic expectations about the product's capabilities leads to consumer disappointment and mistrust.

• Missed Product Education: When the product defines a new category and requires substantial consumer education but you fail to deliver it

• Ignoring Competition: Neglecting the competitive landscape results in an undifferentiated product easily overshadowed by rivals.

Each factor can individually or jointly contribute to a failure at launch.

The recent launch of Google's Gemini AI model, claimed to outperform ChatGPT 4 in almost every aspect, it’s an example of product launch with poor timing. Google showcased Gemini's capabilities through a demonstration video that quickly went viral, creating a buzz across social media platforms.
However, the demo wasn’t conducted in real-time or through voice interaction as the video had suggested. Instead, as Google later admitted to Bloomberg, the video was made by using still image frames and text prompts to showcase Gemini’s capabilities.

The footage turned out to be edited, made to appear what it was not, and released way too early (Gemini Ultra, the model allegedly capable of such marvel, will only be released sometime in January).

Needless to say, this product launch undermines Google's reputation as a serious competitor to GPT4 and the trust of their customers.

Lessons Learned: Tactics For A Successful Launch Strategy

In hindsight, I understand why our initial reception was lukewarm when converting users from a free to paid model. Clients weren’t accustomed to paying a premium, so necessitating this shift required both enhancing benefits and amping up communication efforts to educate users on the value-add.

I learned that even if the core product has merit, failing to effectively communicate its purpose or launching before truly ready can sink its prospects. By focusing on those gaps, conversion picked up fast and we quickly found our product-market fit.

Here are key lessons on crucial pre-launch, launch, and post-launch factors.

Pre-Launch:

Define Positioning Early: Conduct market research to understand audience needs, preferences, and behaviors, including competitor analysis, trends, and potential customer feedback. In our case for example, we knew from the beginning we weren’t targeting all our customer base, but only a specific portion.
What does "early" mean? It means from day #1 - right when you are creating your product strategy. Otherwise, what are you even building? If you have a product marketing department, get them involved.

Articulate the Value Proposition & Messaging: Develop a compelling value proposition that clearly conveys the product's unique benefits, resonating with the target audience while differentiating from competitors. Ensure your messaging is consistent across all platforms and speaks in your customers' language, not your internal company jargon.
We spent considerable time aligning on appropriate wording, acknowledging that perception varies across languages; what works in English might not resonate the same way in French or German.

Strategic Timing: Optimal launch timing balances external dynamics like market saturation along with internal readiness. Wait until the product merits claims to avoid overpromising at launch.
This is something I regret not doing. I should have extended our beta testing phase and waited longer to publicly launch, until we had enough product solutions to make a big impact right from the beginning, rather than a few months later.

Pre-Launch Your Product: Gradually release your product through alpha or beta programs to gather feedback, refining your positioning and messaging. For us, the beta testing phase was invaluable, and as I mentioned I wish we had extended it further.

Build Pre-Launch Excitement: Nurture the desire of those without early access through teaser content, early access programs, and events to generate buzz.

During the Launch:

Effective Marketing: Implement a cross-channel marketing strategy, ensuring consistent messaging both externally and within your product interface. When we launched, we integrated dedicated launch and upsell moments throughout our platform.

Do Things That Don’t Scale: Personally engage with customers as much as possible. Direct calls or messages and special offers can incentivize them to try your product.

Scale Infrastructure: Prepare your technology, operations, and customer support to handle anticipated demand. Streamlining internal communication and establishing special protocols is essential.

Educate, Don’t Just Tell: Contrary to what you believe, understanding the value of your product is not immediate. With very few products, you have this "aha" moment where you say, "yes, I get it," straight away. The rest of us have some explaining to do. My product, at least, did for sure, and this is an area I wish I would have focused more on during the pre-launch phase. So your goal, starting from the launch date onward, should be to educate on the use and benefits of your product.

Post Launch:

Embed Feedback Loops: Establish mechanisms to quickly capture and respond to user feedback, adjusting your product and strategy in real time.

Measure and Optimize: Utilize metrics to evaluate launch success and make data-driven optimizations post-launch. Continuous monitoring and user feedback were key to finding our product-market fit.

Keep Ongoing Communication: Remember, the launch day is just the beginning of your communication and education efforts. Develop a strategy to continuously engage and connect with your customers across various channels.

Want to learn more about how to launch a successful product? Take a look at my recent interview with Jason Oakley. You'll find all the necessary details and ingredients you need.

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