Home Blog 9 Ways to Prevent Product Failures in 2022

9 Ways to Prevent Product Failures in 2022

February 22, 2022 Edwin Kooistra

Whenever a company or a business, especially entrepreneurs, launch a new product or service, they are excited about it, but they’re also very much convinced about the product’s success.

This can, of course, be attributed to the efforts and passion that has gone into the development of the product, but unfortunately, not all products are what they seem to be, especially when it comes to the eyes of the customer and the market dynamics.

In the technology-based entrepreneurial ecosystem, the rate of product failures is high number which of course can be attributed to several factors. But what remains is that more than 30% to 45% of the products launched in the last fiscal year have failed to deliver a financial impact or return for their investors.

Research suggests that with over 3000 ideas being pitched to investors in the final stages, only 100 are taken as projects, and out of those hundred, only two see the light of the day in the form of a launch and guess what? On average, only one of them is a success.

For the year 2021, the tech industry statistics reveal that at least one of three products launched failed despite extensive research and planning. Market data also suggests that out of the four products that entered the development phase, only one of them is taken to market.

Not only that when it comes to the US tech industry, but over 48% of the financial resources are also invested in products that did eventually fail and did not give a solid financial return.

At Chasm, our team of experts can help you avoid product failures. Check out our product marketing services and find out how you can take benefit from our expertise.

What is a Product Failure?

A product is considered a failure when it fails to establish itself in the market as a go-to option for the market segment that it was targeted towards.

Even one-time success is not accepted, and for a product to be not considered a failure, a consistent success with tangible financial returns is a must condition.

Product failures or product flops lead to the product being called from the market because of numerous reasons. The reasons include but are not limited to the product not being able to capture a share of the market to sustain its presence and recognition or the product not following the product life cycle and even falling short in terms of profitability.

Market research has concluded that a leading cause of new-product failure is somewhat qualitative that revolves around product fit and understanding of the customer’s needs.

The majority of new products are failures because the product fails to capture the market, or if they’re able to do so, then it is just for a short period after which the product fizzles out of the market.

A question that is commonly asked by industry observers, even concerned customers, and consumers is why a new product fails? But the answer to this is not quite simple just put it across when a product is being developed, it looks really good on paper, and it seems like the market segment will grab it up like anything, and it will become the market leader.

9 Reasons Why Products Fails (And Solutions)

Let us now look at some of the top reasons why products fail in the market. We shall also look at some possible solutions to avoid these causes in the first place.

  1. Lack of Research into the Market and Target Audience
  2. Inappropriate Go to Market Strategy
  3. Lack of Internal Capabilities
  4. Absence of Product-Market Fit
  5. Poor Market and Customer Education
  6. Absence of a Real-World Problem 
  7. Flawed Business Model
  8. Lack of Product Differentiation
  9. Product Fails to Deliver

1- Lack of Research into the Market and Target Audience

Researchers concluded that one of the top reasons why products, especially software and tech-based innovations, fail is because much effort has gone into the product itself while there has been a lack of effort when it comes to market research. Companies do not invest in market intelligence and getting to know their target audience. Hence when the product is launched, it is a mismatch for the market and the target segment and therefore fails.

Solution: We suggest that one should hire market research experts who specialize in doing market research and building target segment personas. Tangible investment is required in this step because not only is it critical to the product’s introduction into the market, but it also helps you define whether your product is satisfying the need of the target segment or not. 

2- Inappropriate Go to Market Strategy

Another top reason why a product fails is the development of an unsuitable go-to-market strategy for the product or service. So might have an amazing product at your hand that is going to revolutionize your target segment, but when it comes to your go-to-market strategy or defining a launch, there is no effort.

Without creating the right hype for the product through the right channel and means, you cannot expect your product to succeed.

Solution: To counter this issue, it is recommended that as the product is being developed, a thorough content-focused go-to-market strategy based on market intelligence and tangible research is developed alongside.

Once product development and go-to-market strategy are being developed side by side, you will get a chance to ensure that it is a good match. By testing on a smaller scale, errors and issues can also be fixed in both the product and the go-to-market strategy.

3- Lack of Internal Capabilities

It is difficult to say and put it out there for business owners and product developers, but lacking relevant skills to develop a certain product leads to product failure. Sometimes determination and passion get the better of us, and it is difficult to let go of an idea despite lacking the skills to work on it.

Also, in some cases, possessiveness wins, and one does not get external help got to work on an idea, therefore, the product that is developed is not up to par in terms of quality and value proposition.

Solution: The obvious solution to this problem is to conduct an internal capabilities audit before starting on any project or idea. In case it is concluded that you do not have the resources or technical skills to take the idea to perfection, then never hesitate to get external help or consultation.

We do understand that there can be financial constraints in bringing onboard external developers, but as a business owner, it’s a decision that you must make to survive in the market.

4- Absence of Product-Market Fit

The failure rate for new products is high due to a multitude of reasons, and one of the top reasons is the lack or absence of a product-market fit. The product or software that you have developed or are planning to develop might provide an amazing value proposition, but what if you are targeting it toward the wrong segment?

This is where the importance of offering appropriate product-market fit and visualization of buyer persona steps in. The majority of the products failing in today’s tech industry are because of poor product-market fit that is not in line with the value proposition and customer’s pain points.

Solution: The obvious solution to this issue is, of course, thorough market research and a trial and hit method. Experts recommend that you keep on developing and working on the product-market fit until or unless you find the right alignment. If you are new to product marketing then you should take help from a product validation agency that has both the expertise and team to support your business.

It is also important to know that the product-market fit keeps on evolving with the industry and the customer’s needs; hence, it is important to keep on reviewing it to ensure product growth and sustainability.

Recommended reading: How to find the right product-market fit

5- Poor Market and Customer Education

Another top reason for product failure is insufficient or poor customer and product market selection. This means that despite having an amazing product or service, you as a business owner or organization fail to make your customer aware of its value proposition as well as identification of their need. This is usually because of a poor marketing strategy or an efficient marketing department that is unable to deliver on its goals and objectives.

Solution: To overcome this issue, of course, we recommend having a thoroughly developed marketing strategy that focuses on making your customer aware of the product as well as generating buzz. For more critical segments or areas where you believe that it is difficult to penetrate the market in terms of customer education, you can always consult experts.

Always remember if your customer is not aware of the product’s benefits and value proposition, then no matter what the product is, it is going to fail.

6- Absence of a Real-World Problem 

This may seem like a not-so-obvious reason, but as research has proven, the absence of a real-world problem is one of the main reasons why products fail. Sometimes entrepreneurs or product developers get ideas that excite them and seem very interesting.

They start working on them in various creative ways and develop a product that looks promising. But once you start looking around you realize that the segment it is targeted towards does not have that problem that the product promises to solve.

Similarly, in other cases, the problem just exists on paper in the real world; the cost-benefit analysis of solving it is not that positive.

Solution: The two-word solution to this reason for product failure is market research. Always make it a pet rule that before embarking on an ambitious product journey or just product development in general, you as a business owner will focus and invest in market research because you must know whether the need for your product exists in the market or not and whether the product itself will solve a problem for the target segment.

Once you have conducted thorough market research to understand the problem that you want to solve with your product, you will not only be able to deliver a high-quality value proposition, but on the other hand, it might save you millions of dollars.

7- Flawed Business Model

You have an amazing product that delivers on the value proposition and solves a problem that your target segment has. But the product still fails and does not make a mark in the market, and you start wondering why?

This is because the product tanks financially due to poor planning and development of a business model that was not sustainable in relevance to the product or service.

Solution: The majority of the new products fail because of unclear strategic direction and having an inappropriate business model. Always remember that when developing a product, you need to have a strategic plan in mind as to where you want to see the product in the coming times.

Also, you need to have a solid business model in place that not only promises financial returns but ensures that you can sustain the growth and penetration that you want to achieve. One business model or strategic option that works for a certain product does will not necessarily work for your new product.

To fix this issue you can either get strategic direction from a product marketing agency or you can work your way through reading online resources to help you from scratch to build a better business model.

8- Lack of Product Differentiation

Sometimes products fail because they fail to stand out in the market and develop a niche for themselves. If you’re not able to make your product look differentiated from what is already available in the market, then as an obvious customer response, the product will not succeed.

You must entice your customer to invest in your product or service by offering something different. Otherwise, why would a customer buy a product or service if it is just the same as what is already available to him or her?

Solution: Always ensure that when you’re developing a new product, it is differentiated from its competitors and your current product portfolio. Because if it is not the case, then what sense does it make to develop a new product from scratch.

The differentiation does not only need to be in terms of features, but it also must be in terms of brand and the product persona itself. For achieving this, your marketing department needs to work in close cohesion with the brand’s team and deliver results.

9- Product Fails to Deliver

The most obvious of reasons as to why products fail is that the product itself fails to deliver on the promise and value proposition that is made in the first place. Sometimes organizations make claims that they are unable to deliver due to a multitude of reasons.

This is why once the product hits the market and the customers buy it, the product fails due to the non-delivery of the promise.

Solution: We do understand that sometimes in the world of marketing, claims are escalated to add to brand image and product theme. But always remember to align the product’s actual value proposition with what it can deliver.

If the product does not provide the solution to a customer’s need, then not only will it fail, but it will also damage your company’s reputation and endanger the success of any future product launches.

Examples of Product Failures & Key Takeaways

We will now look at some examples of product failures and why these products were not able to succeed.

1- Google Glass

Failed Because: Absence of a Real-World Problem

Simply put, Google Glass was a smartphone installed into an eyewear frame. Google invested millions in the product, and of course, the idea seemed exciting as well. But after two years of disappointing sales, the product line was removed for good. It turned out that the world did not need Google Glass in the first place.

2- Windows Vista

Failed Because: Product Failed to Deliver

Introduced to the world after basking on the success of Windows XP, Microsoft Windows Vista failed as a product. The reason for this product failure was the product itself being unable to deliver on its value proposition. It was full of bugs, and it slowed down processing speed, something no computer user would appreciate.

3- Home by Meta

Failed Because: Product Failed to Deliver and Absence of a Real-World Problem

Home by Meta (previously known as Facebook) was an app that converted the home screen of your smartphone into a news feed style outlook, like Facebook feed. The app never caught on due to a multitude of reasons, including the difficulty of usage and issues with switching between different apps.


The success of a product is considered a planned process. When developing your product, it is recommended that you work backward if you want to ensure product success and avoid product failure. Always keep the result in mind and then work backward as to how you will achieve it and what is required to do so. There might not be one fit for all strategies available for product sales and success and to avoid product failure.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Edwin Kooistra - Product Marketer & Founder

Technology can be a huge differentiator but leveraging emerging technologies can be challenging. After my degree in Business Information Technology I decided to work on the provider side of Technology, because I believe Technology providers play an important role in guiding enterprises on their digital journey. Besides helping tech businesses to optimize their growth and go-to-market strategies, I also like to write about the topic. I hope you find it useful!

Related Content