Avoiding the Product Death Cycle

Death Cycles can be hard to detect, but they are one of the main reasons why startups fail. What can we do to avoid them?
August 4, 2022
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We talk about the Software Development Life Cycle as a concept that encapsulates the nature of software development, continually growing, constantly changing, and always moving forward. That’s not to say that it’s a linear process or a simple one.

Software Development is anything but simple. From the unexpected to the unplanned, we often find ourselves in a position where we either have to backtrack or reframe our project. Be it due to financial concerns, market changes, or results not meeting expectations.

In our minds a Life Cycle implies growth. The more we work on a project, the better it becomes. But what if that’s not the case? What if our cycle is actually harming the project? What if we have fallen, without realizing it, into a death spiral.

What is a Death Cycle?

It begins with the launch of a product, at first glance everything seems to be going according to plan. Our indicators show rapid adoption and a strong userbase. On the surface, it seems that we have a strong product on our hands.

But after a few weeks, the cracks start showing, adoption slows down and our user base starts to shrink. At the same time, growth flattens, or worse yet, it begins to drop. Of course, this is expected, after all, it’s hard to keep the initial hype going for long. In fact, most startups account for this initial loss. 

With client feedback and more testing from Q&A, we squish bugs, add new features, and put the marketing machine into motion to let people know that our product is improving. Then the promised day arrives, as the new version reaches the production environment we see an uptick in our metrics. It worked, or so we thought. 

So far, what we are describing isn’t too far off from the normal Software Development Life Cycle from a business perspective. Growth is a key indicator when we are assessing the success of our product or business model, but sometimes growth can also obfuscate underlying issues. 

So we see clients return, but, how are our current numbers compared to our previous cycle? What’s the average engagement a user has with our product? Are we keeping long-term users? 

Even if we managed to hit bigger numbers the second time around, there’s no guarantee that the numbers won’t drop again as interest wanes. If we aren’t converting new users into long-term clients, we might end a bigger fall off the second time around. And in that case, we are facing a death cycle. 

In a death cycle, we are stuck in a loop, trying to salvage our numbers by adding more features to our product, which in turn leads to feature creep and all it entails. Ironically, even if our product is growing, we keep losing customers and interest, it’s the ultimate process of failing forward. 

Worse yet, thousands of projects enter a Death Cycle without even realizing it. Blinded by sudden spikes in growth, leaders, and decision-makers don’t pay attention to retention or new adoptions, not realizing that with each cycle their costs are growing while their profits are shrinking. 

How can we avoid getting trapped in a Death Cycle?

Rule 1: The Client Isn’t Always Right

Perhaps the most common mistake startups make when they feel like they are falling into a Death Cycle is going into panic mode, losing sight of the product vision, and fostering a user-led development process instead. 

There are three reasons why this doesn’t work:

  • Users are great at noticing problems, but they are not designers, you are. They don’t have any information about what’s happening under the hood, you do. By all means, ask for feedback, but keep in my mind that users don’t have the technical expertise to know how feasible new features are. 
  • Users who already know your product usually don’t represent the larger market. It’s important to keep your baseline happy, but at the same time, it’s important to understand that their vision is biased. They are already using your product, and the features they suggest might not appeal to the mainstream user.
  • Design by committee is a sure-proof way of inviting feature creep in your project. It’s perfectly fine to ask for opinions within your product vision, but trying to add everything everyone asks for is simply not feasible.

Rule #2: It’s Not About the Features

Another common mistake is assuming that by adding more features, the product will appeal to more people. Sometimes that might be the case, especially when you have competitors with bigger and more refined products. 

But sometimes it has nothing to do with the product itself. Maybe your pricing is wrong, maybe you targeted the wrong audience, or maybe the marketing campaign failed to reach a wider audience. 

Whatever the case, data gathering is key here. Instead of playing a guessing game, market research can help you pinpoint the reasons why your product is not performing as expected. A mixed-method approach to market research, with a bit of help from AI solutions, can go a long way in helping you understand the cause behind your problems.

Rule #3: One Step Back, Two Steps Forward

New features are a fantastic way to attract a new audience and to make your current audience happy. But they are only feasible if the baseline product is good enough. 

Sometimes the best solution is to go back to the drawing board and reframe your strategy. For example, if pricing is an issue, maybe you could think about relaunching your product as a freemium service. 

Keep in mind that userbases are volatile. For instance, losing 80% of mobile users within the first three days of installing an app is par for the course. The odds of recovering a lost user are minimal at best, and you are better off finding new ways to attract new clients.

While spikes are exciting, slow and steady growth is a sign of a healthy userbase, taking your time to make sure that your product is as good as it can possibly be is often the best strategy.

Escaping the Cycle

In the end, I would like to say that everyone can break the Death Cycle, but unfortunately, that’s not the case. One only needs to see the number of startups that go bankrupt within the first couple of years to realize just how difficult it can be. 

Having said that, there are success stories in every single tech industry, from videogames to electric cars, tales of developer teams that didn’t give up and kept working and polishing their products until they succeeded. Kind of like a redemption arc in a movie.

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