Three Reasons Your Product is Underperforming

Product ApproachProduct Strategy

If you work in product or at a startup, you’ve likely heard the statistic “90 percent of products fail.” While depressing, this statement offers some measure of comfort to product managers struggling with underperformance. (At least you’re not alone, right?) If you dig a little, however, you’ll be hard pressed to find the origin of this widely quoted data point. According to an article published in 2012 by the Journal of Product Innovation Management, the actual product failure rate is around 40 percent. In the article, they claim this ‘90 percent’ statistic frequently quoted is an ‘urban legend.’

This is actually great news for product managers and the success rate of their products. You may not be able to control the timing of the market or what your competitors are doing, but you can learn to make better product decisions to avoid making the same mistakes many of your competitors are making.

Why do products underperform?

There are a number of factors that can contribute to an underperforming product. Here are some common culprits:

  • Lack of product strategy means failure to connect business outcomes with the product roadmap
  • Deficiencies of the product or technical team
  • The product doesn’t actually solve a problem for the customer

Below, let’s start unpacking why each of these points can lead to failure…

REASON #1: Lack of product strategy

Product strategy is critical to identifying how a product will help a client achieve a company’s strategic goals and create continuous value for users. One of the more challenging problems teams face when building products is failing to define a clear product strategy.

Symptoms of a non-existent or unclear product strategy:
  • Lack of prioritization
  • Building features for the loudest customers
  • Chasing new shiny objects
  • Burning through cash without any meaningful proof points along the way

A strong product strategy that is connected to business outcomes gives your team the opportunity to differentiate the product in the market by having a firm grasp on your customer’s pain points, the market, industry trends, and how it all ties to the company’s strategic goals. It also is crucial to validate your assumptions objectively—using data—after you create your initial product hypothesis. It could be as simple as validating a set of features with customers by building a clickable prototype to put in front of customers. This also helps clarify the product’s vision and goals.

REASON #2: Deficiencies of the product or technical team

Another common reason for why your product is underperforming is that you may have deficiencies on your team. You need a holistic approach that combines strategy, design, engineering, quality and data to set up the product for success. If the user experience is not good or the product keeps crashing or getting stuck, users will be less likely to continue using your product. Sometimes it’s the case that a product team creates a great product, but no one is using the product because either the team failed to include the product marketing team to help establish feedback loops in and out of the product, or there is no way to collect data on how your customers are using the product.

REASON #3: The product doesn’t actually solve a problem

The final reason products underperform is that it does not actually solve a problem for the users. Perhaps the concept was never verified by the users or there was no market or user research prior to defining the product. Another common issue is that there are no analytics embedded in the product or the wrong data is being tracked. This could lead to bad product decisions that will lead to poor results.

Give your product a checkup

The reality is that failure is necessary in order to learn. It is rare that anyone gets product-market fit right on launch day. Many successful companies launched products that failed. Apple had several failed products, Amazon failed to launch successful retail stores, and Facebook tried numerous monetization strategies (including micro-gifting) and… failed. The reason these companies are so successful is because they are quick to analyze their failures to correct-course.

If you have an excellent product on your hands that just isn’t delivering the outcomes you anticipated, it’s better to start your analysis sooner rather than later to diagnose the root issue of the problem. In the tech industry, speed is everything.

Failure is not the goal, but it is always an option. What framework does Dialexa’s team of product managers and engineers take to prevent underperforming products?

Learn more about dialexa’s product engineering approach →


Image of Jeanette Cajide

Jeanette Cajide, VP of Strategy, works with Dialexa’s team of product engineers to guide clients in creating new technology products, innovative businesses, and new service offerings that lead to growth and more revenue. Jeanette has a Masters in Public Administration from Harvard University, a Masters in Business Administration from Northwestern University’s Kellogg School of Management and a Bachelor of Journalism from the University of Texas at Austin. Jeanette has contributed as a writer for The Huffington Post, Entrepreneur, and TechCrunch and has been interviewed and featured in articles for Wall Street Journal, TechCrunch, Mashable, MIT Review, Huffington Post Live, BetaBeat, New York Magazine, Bloomberg, Dallas Business Journal and Tech Cocktail.
Connect with Jeanette on LinkedIn


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