Why do most digital products fail?
I love Indie Hackers and the builders that share products here. I admire the parade of creativity and entrepreneurship and the community who support and promote them.
Just about every product posted shows a lot of love, effort, time, talent, and resources. I see potential in just about all of them.
But I've noticed that a small fraction of the products shown here go anywhere. Most settle to the bottom of the ocean that is the Internet. Forgotten sediment.
Having built a bunch of fintech startups over the past 10 years (Uphold, Airtm, Cadoo, and Slyk) I've come to think of building being four stages of product traction, each of which requires finding a different cohort of supporters:
- Idea Stage: you need to find Believers for moral support because building digital products is hard, requiring a lot of time, effort, and focus. Believers can be people suffering the painful problem you are trying to solve who validate that they need the better mousetrap you want to build.
Seems to me like most PH launches skip this step.
- Pitch Stage: you need to find Collaborators who are excited about helping you build the product. These can be co-founders or first-check investors-- people who are going to invest their time and money alongside you. This is where you need to not only describe the problem you are solving and the Believers you are going to help, but also why you are the one to do it. The Pitch is persuasion that your product has potential.
I feel like many product builders skip this step too and go straight to the coding stage.
- Product Stage: This is where you and your collaborators build the product, preferably a skinny MVP that you can get into the hands of your Believers ASAP and use to recruit more collaborators.
This is where we meet most of Products on Indie Hackers. The products and their marketing materials generally show a lot of love, care, and talent.
- Network Stage: This is where your awesome product gets spread by Believers to others who have the same problem. Many startups implement referral sale rewards programs to incentivize this sharing, essentially giving their user base a way to get discounts on the product they love.
The goal is the hypergrowth that useful digital products can easily achieve thanks to the Internet, accelerated by digital money (referral rewards).
Most product launches never achieve this stage, even though my impression is that every digital product launched on IH would love to experience exponential growth.
One explanation as to why not all products achieve hypergrowth I've heard is that there is a limited number of products that could be useful to that many people, like a limited number of songs or movies or books that can become hits.
I'm not convinced by this.
What I've learned from building a lot of digital products that have achieved Stage 4 virality is that you can iterate to hypergrowth if you establish feedback loops as early as possible, i.e. with Believers & Collaborators.
My thesis is that digital product builders need to start incentivizing these feedback loops at the earliest stage of product conception, way before the first line of code or domain registration.
And I don't think it's too late for products launched here or elsewhere to start these feedback loops to find and reward Believers or iterate until they do find them, and then leverage that cohort to find more collaborators (including investors like me), as well as users, until hypergrowth is unlocked.
I'd summarize my thesis like this: to achieve hypergrowth monetize the potential of your idea (coinify it and represent it as a digital token) as early as possible, and share the upside with everyone who helps you grow stage to stage.
Would love to hear thoughts and feedback on my thesis.
Shiny object syndrome, imposter syndrome, and burnout. The main component is sticking with it, IMO.
Not sure who, but someone said that if you consistently do any one thing for 10 years, you'll be successful. I think that's (mostly) true.
It's True. I have learned these things after a struggle of 7 years When I see a video, anything takes at least 5 years to be successful. We left most of our plan because of SOS or because of changing the context of our mind. We forget what we have planned. After failing lot. I have analyzed myself and decide to stick on a single project for which I am still working for 5 years with a job and I am seeing progress on Aligly website builder and I am going to spend my rest of time with this project until it gets successful.
This is just an ad-hoc list of conditions that while reasonable enough are very far from being universal or ideal.
Build something people are willing to pay for
Let as much people know as possible this thing exists.
That's it, equally arbitrary but far more universally applicable.
“If I had asked people what they wanted, they would have said faster horses.” - Henry Ford
The vast majority of businesses are not inventing an entirely new product class. Certainly indie hackers would be taking a big risk if they tried to do this without prior successes under their belt.
Seems pretty aligned to the YC approach:
Build things people want.
Simple to say. Hard to execute.
That's because the "what" is easy. The hard part is the "how".
Very good. When deciding on a venture, I always ask, where is the first sale? If I can't actually find someone who will buy the product, there isn't any point....
The guy behind Failory also had a unique perspective on this. He interviews over 100 founders who failed and the reasons were a combination of product-market fit failure/marketing/partnerships/timing and so on.
MIT once claimed that most tech startup failures were the result of neglecting user needs.
From my experience, I can only agree with this statement.
Shiny object syndrome, imposter syndrome, and burnout. The main component is sticking with it, IMO.
Thank you for sharing, in fact I find that many products fail because they can't get users and can't find users who are willing to pay.
The most innovative ideas and perfect products need people to use them, otherwise they lose the meaning of their creation.
Another reason they fail is because companies are not aware of their numbers (cash inflow/outflow), you cant improve what you don't measure
It seems like every day there's a new digital product that's supposed to revolutionize the way we do things. But most of them end up failing, and I've always wondered why.
I think it boils down to two main reasons:
The creators aren't thinking about how their product will fit into people's lives—they're just focused on making sure it works well.
They don't know how people use other products, so they can't create something that fits into the way people already do things.
A good example of this is [product name]. They made a social media platform that was supposed to be faster than anything else out there, but it didn't take into account how much time people spend on social media already or how they use those platforms today (like scrolling through their feeds). So when they released it, nobody wanted it because it wasn't as useful as what they already had!
I think because after the honeymoon phase is over and when the Product Hunt visits drop, that's when things get real for me.
And momentum, users, and money are like oxygen for the product. Preferably you have at least two of the three!
That sounds like a contradiction but Not every failed startup is a failure. :)
My take is that the failure rate of posted Products is a natural side effect of product validation. If someone posts a Product they want to launch and then gets crickets, it makes sense to not move forward with it (unless they're highly motivated to kick it into the next gear).
If you asked about startups, the answer is always co-founder issues.
1st hand experience several times.
When we got along, the sky was the limit, customers, investors.
When we did not, it explodes when you least expect it.
If we are talking about solopreneurs, not enough validations. Did few of those as well.
Buy branded product.
web3 products are a great example of your thesis!
I believe consistency is the key. Product owners in their endeavor to get successful by trying anything and everything often overlook the fact that building a great product and ensuring that reaches the right target audience takes time. Sticking to a strategy and consistently walking down that path makes a lot of difference in the long run. In my experience, it is ok to let go of something if it's not working, but changing the entire strategy should be a well thought of decision.
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Thanks <3
I always try to find Collaborators who are excited about helping me to create the product. It is a fact that I want to not only describe the problem for solving and confidently take help. The main target to manage my product has potential.
This is interesting. Would you mind sharing how you got this insight about these 4 stages? Would you say #2 and #3 should happen in parallel? People you pitch to ideally want to see demos right?
Suspect it's a mistake to focus on hypergrowth from the start unless you have the resources of a well-funded startup or big company.
Indie products without huge investments do not need to make as much money to be profitable, so it's probably advantageous to go after niche opportunities that are too small for well-funded competitors and then grow from there.
Great thesis. I share many of your thoughts.
Focusing on 'hypergrowth' is definitely critical and as a coder first product builder I've had to learn and adjust to understanding that nothing matters without the user.
Literally nothing matters without the users.
I think modern ideas of 'hypergrowth' are really trying to build community around thoughts, solutions and a product that represents that community.
I believe most products fail because they don't actually solve for the solutions the community desires or the product doesn't properly address the community.
Lmk what you think.
Very interesting take @slyk! I definitely think that working in isolation must be 1000x harder.
How do you propose founders "incentivize" (or reward) Believers "before the first line of code or domain registration"?
Thank you for your honest article. I completely agree on. However, I found myself in the opposite situation. Surrounded of believers and even a couple of persons who have already achieved amazing things but I cannot find a software developer with high technical skills and at the same time excellent social and leading abilities. I am stuck here.
I think the market is quite saturated. In terms of digital products, we have most of them at our disposal due to staggering success and headways in the last 15 years or so. You have food apps, ride apps, and apps to teach you habits and help you coordinate with colleagues at work from the comfort of your sofa (like we saw in the pandemic), and still seeing it with WFH being a permanent way of doing work, at least for knowledge-based industries. There's a digital product for EVERYTHING. Anything that gets started now, will have a difficult time scaling. Unless it's a super-specific niche that no one's tapped yet or a select few are working on. Otherwise, digital products are commonplace. Since 2018 and onward EU/GDPR, LGPD, & CCPA laws, software to discern what data companies have on customers is catching on.
You need to not only describe the problem you are solving and the Believers you are going to help, but also why you are the one to do it.
I hadn't actually thought to explain why I'm the best person to do it - thanks for the advice @slyk! But, beyond responses like "because I came up with the idea," or "I'm passionate about this," what would a good answer to this be? I can make points as to why a product is unique, but there are tons of people with the same skills as me...
very good thesis, I think that much of the blame lies in the films that are presented of successful founders who, inside their room, created revolutionary products
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Yes you are right I think to incorporate a feedback loop. My project wouldn't have been where it is now if it wasn't for the amount of feedback I got. Granted feedback is very stressful especially after you've written the code.
Digital products fail for the same reason millions of hours of music get uploaded to streaming services that never get listened to. Artists, who fit the same mold as founders, need believers (i.e Beliebers) who are collaborators, fans, consumers. Everyone’s so focused on writing and recording that they don’t get around to building the community. Just ship and fingers crossed that the meritocracy will take its course and everyone will flock to your amazing thing.
The answers to longevity and prosperity lie in Web3 tools, don’t you think?? IMO custom coins, crypto, and new engagement models are the only way to create a sizable and flourishing artist / founder / creator middle class.
Digital products fail for many reasons. One such reason is lack of proper market knowledge which makes it hard to get into competition.
There's a major key component most founders overlook. I have overlooked it myself many times as well. It's the biggest differentiator and driver of success. It can make or break any product, no matter what framework or methodology you've used. This component is market timing. Various people in their analysis of successful companies have determined that timing has always been the common denominator.
There are several reasons which can be attributed to the failure of an app. Poor User Experience undoubtedly remains the biggest culprit.https://grabtheapk.com/cheat-dragon-city/ Users don't really remember everything that they come across while using a product, but what really gets stamped on their minds is the experience of using the product.
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