Last updated on | Lean Product Development

3 Terrible Mistakes of Digital Product Companies And How to Avoid Them

by Gerard Chiva
Mistakes of Digital Product Companies

Are you offering products nobody is interested in? About 72% of all newly launched products fall short of their revenue targets, according to a recent HBR blog post. In case you are interested in digital product management we have a nice blog post for you: Lean Product Management.


We have developed a Product Management Guide to help you understand How to successfully apply Lean StartUp practices to deliver better products to market faster.

Download The Guide Now!

In fact, as soon as you launch a new startup or release a new product, the odds are already not in your favour.

As many as 75% of venture-backed startups do not succeed while 40% – 90% of newly launched products end up with a very low market adoption rate.

Even at the micro level, the challenge is still the same. A larger percent of new ideas fail to provide any real value for individual customers and corporate clients.

However, among leading brands such as Netflix, Amazon, or Microsoft, failure rate is within 50% to 70%.

The question is, why do startups and newly launched products record such high percentage of failure?  Is it because the brain behind them aren’t so smart? No!

Rather, many startups and newly launched products fail because they implement wrong processes, structures and thoughts.

Nonetheless, for larger brands like Netflix, Amazon and Microsoft, failure is not considered a huge challenge because they strongly believe in experimenting to arrive at the right result.

The major challenge with failure is the amount of money the company lost in the process as well as the associated learning. In fact, it is normal to experience a high rate of failure.

But the most significant aspects are the amount of money spent and what you learned from the failure so far.

If an executive like you cannot create an effective strategy that you can repeat to generate similar successful results to develop a business idea into a sustainable and growing business model by testing and gradually funding it, you have a business challenge.

Mistakes of Digital Product Companies

There are three major mistakes many businesses make irrespective of their industry, niche or how long the company has been in business:

  1. The wrong structure
  2. The wrong process
  3. The wrong people

The Wrong Structure

As businesses grow, they add more hierarchy, bureaucracy, and segment their workforce into specialised units or departments and easily forget how they became successful in the first place.

Lean Thinking has five key principles:

  • Define value
  • Organise in Value Streams
  • Enable flow
  • Implement pull
  • Seek perfection

One of the key principles many companies always abandon as they grow is focusing on value and organising to deliver value promptly to either corporate clients or individual customers.

This is the principle an executive like you should never abandon when you’re growing your business in the digital era and when you have grown so big to the extent that you’re no longer competitive or innovative.

If you’re running a digital business, you should organise in a Product Organisation with independent end-to-end teams in charge of a product or line of products.  If you are interested in this topic you should check the blog post: “Why A Matrix Organisation Will Kill Your Company“.

The Wrong Process

Agile is built on two solid principles. The first is pleasing your customers via quick and constant delivery of important and useful software. While the second is that a working software is the basic measure of improvement.

This is only acceptable if you have teams that are mindless feature factories that are not connected to customers and strategy. Otherwise known as delivery teams, they are not connected to the customer and the company.

They are only responsible for repeatedly and gradually delivering whatever they are instructed to.

However, the right process involves having a better perception and having a crystal clear understanding about the mission of your teams which must include building a business model or achieving a business objective.

The entire process should revolve around moving from idea to execution, research, and authentication. It involves creating an effective business model and a product to satisfy customers.

The Wrong People

Finding great Product Owners in the market is becoming extremely difficult by the day and I explained why that is gradually becoming a regular problem in this post.

Asking the wrong person to take responsibility of a product is a costly mistake.

On the other hand, one of the key mistakes many businesses make is presuming that Scrum Masters or Agile Coaches can transform an amateur or inexperienced Product Owner into a skilled Product Owner.

Why is this a mistake? Most Agile Coaches and Scrum Masters do not have the required skills and experience a modern Product Owner needs to be successful.

Agile, Scrum and Kanban, are valuable at enhancing operational effectiveness. Agile is very great at enhancing delivery.

Nonetheless, Agile knows nothing about creating a viable business model, conduction market research, repeating an MVP or conducting customer development.

The procedures and practices needed to try-out and authenticate an idea until it is good enough for implementation are unknown to most professionals who use Agile.

Our Approach

We propose that executives just like yourself should consider a Product Owner as a Product Manager who is well-equipped, experienced and has acquired contemporary skills such as Innovation, Behavioural Economics, Analytics, Lean Startup, and Customer Development.

As soon as you organise around products, put a skilled Product Owner in charge. One that is professional enough to steer positive business development to thrive your business in the digital era.

However, such Product owners are scarce so finding one is very expensive and takes a whole lot of time.

To make it easier for you to save time, money, and avoid stress, we have created an effective program that will help you to develop great Product Owners within your company.

Our program was designed by our expert product coaches and consultants with a wealth of skills and experience in the Product.

To know more about this program, contact us at [email protected].


We have developed a Product Management Guide to help you understand How to successfully apply Lean StartUp practices to deliver better products to market faster.

Download The Guide Now!
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Gerard Chiva

About Gerard Chiva

Gerard Chiva works with digital businesses to drive market leadership by enabling operational excellence, customer focus, innovation and strategic alignment. He offers expert advice, consulting and coaching to companies who develop software based products which are looking for high growth rates.


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