The Top 5 Product Development Challenges And How To Avoid Them

Developing a new product is hard. Research done by global strategy consulting firm, Strategy&, shows that 66% of new products fail within two years. Doblin says a startling 96% of all innovations fail to return their cost of capital.

Why are companies, from startups to enterprises, failing to launch products people love? They fail to start with the problem. Instead they fall victim to common product development pitfalls. Here are the top five challenges companies face when developing a new digital product and how to avoid them:

1. Focusing on the label.

Minimum viable product (MVP), Version One (V1), Beta, Alpha — we’re all familiar with these product labels. As product developers, labels may seem important, but intent is what matters. Is your intent to build a product that solves a problem in the simplest way? Do you want to gather insight to evolve the product and provide a valuable user experience? Whatever your goal, focus on intent, not the label.

2. Believing more is better.

Many product development teams believe adding features increases customer value and subtracting them eliminates value. This is a fallacy, especially for early product versions. Take for example the Amazon Fire Phone released in 2014. Amazon believed an endless array of features — including “dynamic perspective,” a screen that provided a three-dimensional effect without the need to wear 3D glasses — would enable the Fire Phone to take the lead in the high-end smartphone market. However, the features did little to spark consumer enthusiasm. Reviewers called the device “forgettable” and “mediocre.” Even after a series of price cuts, Amazon ended up taking a $170M loss due to the Fire Phone’s lack of sales.

Product adoption is not dependent on the number of product features. Do not allow the “more is better” philosophy to be your product downfall. Instead, center product development on value instead of feature volume, and embrace that less can be more.

3. Not targeting a market need.

According to CB Insights, the number one reason startups fail isn’t because they ran out of cash, it’s lack of market need. Don’t create a solution in search of a problem. This statement is as true for enterprise organizations developing a new product as it is for startups. If you can’t clearly identify a market need and explain how your product solves the problem, keep working. Tackling a problem that’s interesting to solve, rather than one that serves a market need, is a risky venture. Even with the best technology, the lack of market need — not to mention customer base — will destine your product for failure.

4. Solving low-value problems.

Problems are the foundation of product development — but are you solving the right problem? It takes the same amount of time and energy to solve a low-value problem as it does a high-value one. The difference lies in the end results. A product that tries to solve more than one or a low-value problem will end up solving nothing. To avoid this dilemma, evaluate the problem, clearly define how your product will provide a solution, and identify who you’re solving the problem for. Otherwise, you’ll spend valuable resources providing solutions to problems customers may not care about.

5. Forgetting to validate.

Nothing that hasn’t been validated should make it into a Version One product. Everything can and should be validated when you are this early on with a product. Adding functionality without validation at this stage is lazy and driven by ego. You might have the answer, and you might get it right, but you need customer input. Use your customers to point you in the right direction; in the end, you need them to buy and use your product. Validation not only makes the product better, it makes the company better at marketing, sales, and support.

So, how do you avoid these challenges and develop a deep understanding of the problem? Begin with user research and validation. By prioritizing this step in the product development process, you can clearly define the problem your potential customers or users are facing and understand how to address it at an expert level.

To help your organization have a successful start to product development, AWH has partnered with Rev1 Ventures to present during their interactive Product Learning Labs that lay the foundation for scalable product growth. Rev1’s Product Learning Labs focus on the importance of product discipline, how to implement a proven product development process, and how to make innovative product decisions based on decisions driven and validated by users.

In addition to the Product Learning Labs, Rev1 Ventures engages with AWH to complete due diligence on companies currently developing new digital products. AWH’s due diligence includes a comprehensive review of the state of the product, including architecture, technology, code, extensibility, and security. This report provides insight into where the product is in the product development cycle and what improvements need to be made.

To learn more about the Product Learning Labs or engage with Rev1 Ventures and AWH, please fill out the Get Started form at


Caitlin Zucal
Caitlin Zucal is the Marketing Coordinator at AWH. A graduate of The Ohio State University, she received her degree in International Studies with a concentration in Public Relations and Business. Caitlin is a passionate storyteller and enjoys combining creativity and analytical skills for the enhancement of marketing and product development.

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