Why Your Startup is Failing

Foundations for Success
Building foundations for product success

Tired of being part of failed ventures? Of building products destined for failure? It may not seem like there is an alternative approach to do things when, on average, 90% of startups fail, but there is another approach:

An approach founded upon the idea that, if we build the right foundations, we can engineer product - and ultimately business - success.

In this article, I will break down why products fail, then show you how to actually create value for your customers (and build a profitable business), whilst actually enjoying the journey.

In this article, I will address the reasons why most product teams fail, before showing you how to avoid failure & engineer success with your product & startup. By following a tried & tested three-step process, you will learn to build the right foundations - and thus create fertile conditions for - product success.

 Why do products fail?

Why, despite all the conventional advantages a startup may have (an experienced team, a load of investment, a rigorous product development process), do products still seem to fail?

This is the question I have attempted to answer over the last 6 years of my life. It is a journey that has taken me to 4 continents, working in a variety of product teams, industries and roles in the pursuit of a coherent answer.

It has taken me 6 years to theorise & experiment in practice to reach a conclusive answer. An answer I will outline in the next section.

With an estimated 90% of new ventures failing to become profitable, self-sustaining businesses, it is also a question that should be very much pertinent to you, whether you are an entrepreneur, product manager or currently working in a startup.

With such a high rate of failure, something in the conventional approach promulgated by the startup world is broken. Convention simply does not work.

I believe it’s time for a new approach to how we build products in order to engineer product -and business - success.

Searching for an Answer

In 2013, I founded my first business, a travel app called BackTracker, following the conventional wisdom of our mentors, our accelerator programme, other founders, academics and product books to pursue a specific definition of success: rapid growth in order to raise a large round of investment.

Yet nothing seemed to be working: raising investment didn’t help us create value for our customers, a rigorous development process simply made us more efficient (but not more effective), and our inexperience in business didn’t really limit us as we would have initially thought.

After a few years fluctuating between exhilarating promise and abject failure, we ran out of money and closed the business, no closer to answering the fundamental questions underpinning what we were trying to achieve: Building a profitable business.

Since that still-painful failure, I have spent my time examining how to approach product development differently in order to give a team the best chance of success, reflecting on the whole experience immediately in the aftermath of my failure that something wasn’t quite working in how startups approach the pursuit of long-term success.

Since then, I have researched, developed & - most importantly - applied in the real world my ideas in order to develop an approach that can effectively engineer product success.

I don’t boast the credentials of having worked for Google, Amazon or some other monolithic tech firm.

I’ve coached a Google Drive founder, consulted with a few large European startups, sure, but my value really comes from the breadth of experience, built up over numerous teams, in numerous industries, in numerous roles to test, iterate & hone my unique approach to building successful products from the ground up.

That process, one of focusing on building three core foundations to product success, has led me to where I am today:

Helping other startups engineer product success through my work as an Agile coach and consultant.

Building my own startup, Scribe, as a self-sustainable, profitable business to help people suffering from anxiety find calm & clarity in their lives.

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A Choice

Aren’t you tired of wasting your time - wasting your life, even - building things that create no value?

Working for months on a new feature or business that nobody uses? That makes no money? That ends up quietly dumped on the scrapheap and forgotten as you turn to your next project, one also doomed to failure?

If you actually want to create value with your work, there is another way.

A way where you can engineer success for your product and for your business. Where you can follow a framework (one that is not restrictive and limited to working in one specific context), laying the right foundations to work effectively as a product team, and ultimately to give your business the best chance of success.

A way where you can maximise your potential, approaching your work calmly & rationally, making high-quality decisions, to build the best product & business possible - and to actually enjoy your work each day.

Ready to take matters into your own hands?


Beliefs Holding You Back From Success

“But conventional methods do work. Where’s the evidence that this approach works?”

Agile, design thinking, traditional waterfall decision-making.

Each methodology to developing a product may work at times.

You may get lucky and build a feature that helps your product grow dramatically and makes you profitable. You may have been lucky with the timing of your product, hitting an upward trend in the market. You may get to profitability by simply replicating a similar international product in your domestic market.

But returning to the simple fact that 90% of new ventures fail (the vast majority of these following conventional product development methodologies), the chances of stumbling across success are very low if we are not able to rigorously measure progress & inform our decision-making with concrete learnings from the work we are doing.

Products fail by following convention for the following reasons:

  1. Startups are incredibly uncertain, and therefore require a different process

Put simply, conventional product development methodologies do not work in the context of uncertainty that a startup must operate in.

Because a startup cannot say with confidence what their market is, who their users are, what the solution they should build is - sometimes not even which problem they should be solving - we must use a different approach to effectively deal with the inherent uncertainty of a new venture.

If we plan & discuss ideas too thoroughly, we only find that they are outdated in a matter of days based on new data that is constantly coming in about our customers, our product or our market.

It is made redundant so quickly that it doesn’t make sense to follow conventional methods primarily focused on improving how organised & efficient our team is, as we shouldn’t make concrete plans for more than a few days ahead.

  1. Conventional methodologies mean we do not focus on what actually matters

Unfortunately, humans have a tendency to over-simplify things.

Rather than delving into the complex nature of life, death & purpose, for example, we prefer to tell ourselves a simple story that God made the world & that the purpose of life is to follow a list of rules from the Bible.

We like to find definitive answers to things that may not have definitive answers.

And so it is with product:

We focus on applying one specific methodology as our salvation. As a way of saying, “If we just do this one thing, then we will be successful”.

Rather than addressing the incredibly complex nature of how we, as individuals and as a team, address decision-making & determining what to build and why, we try to distil everything down to a simple process.

We cling on to one simplistic solution as we rush around, stressed, panicked, with thoughts clouded by anxiety, hoping for a way out of our spiral towards failure.

So we cling on to the certainty such a process provides: We estimate tasks better. Plan tasks together as a team. Track how much we are getting done each week.

We cling on to some sense of control & clarity that following methodology provides.

By applying a framework, like Agile, only to how we build each feature, rather than addressing our decision-making more holistically, we expect all of our problems to be solved.

This tendency to over-simplify our product development process, to distill everything down to how efficient we are - how much we can get done in a week, for example - leads us to failure.

However, by focusing on how efficient we are, it means we are not focusing on what really matters:

Delivering value to our customers.

The more time we spend discussing how we want to plan and execute the building of a new feature, the less time we are committed to working out whether it even makes sense to build the feature in the first place (and whether there is a more simple alternative we can come up with to deliver the same outcome).

By focusing on efficiency, we are distracted from focusing on being more effective.

Thus we optimise for the wrong thing, building more and more features each week, but building features that deliver no value, that tie us up in unnecessary complexity and technical debt, leading us farther and farther away from our core purpose: Delivering value to our customers.

And the unfortunate reality is that customers don’t care how long it took to build a new feature or how exciting it was to work on it. They just want to know what problem it solves for them. What value it delivers for them. And if it doesn’t deliver value, they won’t care (or even notice). That feature will lie unused on the scrapheap, a failure.

  1. Conventional methodologies do not allow us to track progress

“Startup success is not a consequence of good genes or being in the right place at the right time. Startup success can be engineered by following the right process.” - Eric Ries

Many product teams may already recognise the reality that their focus on efficiency doesn’t really matter if we aren’t delivering value. However, many also assume there is no alternative. They simply shrug & accept the chaos & disorder they currently experience in their team as inevitable.

This would be a fair assumption, considering conventional methods are, by definition, the norm.

Yet such a belief is wrong.

By measuring the specific impact we have with each new feature we build (a process I outline in Part 3 of my book), we can track precisely how we are progressing towards our goals.

Not in a vague sense that we see, say, the number of app sales increasing over time (which can generally be attributed to any random event outside our control, such as an App Store feature, the day of the week, maybe an article related to our industry written in the New York Times that drives more App Store searches).

Instead, by following a different approach (one that forms part of the foundations for product success I will outline below), we can track the exact impact we have with each thing we do, learning from the success or failure of each idea, adapting based on our learnings, and moving closer & closer to success: A profitable, self-sustainable business.

And it works.

Eric Ries, the founder of lean product development methodology, which forms one of the foundation of product success, after using his company IMVU as a guinea pig to develop the theory, has since had massive success, with 60 million customers and $50m in revenue since he published his book, ‘The Lean Startup’, in 2011.

“I’m already taking enough risks by running a startup. I can’t just take another big risk on a whole new approach”

It’s easy to find faults in what currently exists, but it’s always hard to pursue an alternative.

It’s hard, particularly in the context of uncertainty, stress and anxiety of trying to build a product up from nothing, to take a chance on a process that you have never tested - one that is entirely new for you & which comes with its own sense of uncertainty and risk.

Yet ask yourself this:

What do you want to achieve with your life?

Do you want to continue moving from failure to failure, never addressing the root cause of that failure? Are you happy to ignore the reality that your current approach simply isn’t working? To work so hard & commit so much energy - to commit so much of yourself - to something doomed to failure?

Everyone has a vision for how they want their life to be and what they want to achieve in life. Building successful products lies at the heart of that. It lies at the heart of our purpose in life.

Therefore, to have the impact we want to have on the world, we need to make bold decisions: Decisions that question - and sometimes go against - convention. Decisions that feel like risks. Decisions that lead to uncertainty and anxiety in the short-term.

Yet the most important decision we can make with our work is deciding that it is time for change. If something isn’t working, what is the point in stubbornly hitting our heads against the same wall, hoping something will change?

Is it not a greater risk continuing with something we know does not work?

If making the same mistake over and over again is, according to Einstein, the definition of madness, then what are we doing with our time?


Furthermore, if we are unable to build a profitable business in the long-term, then all of the time we spend working on something that is not going to work is a waste of time.

Even spending 2-3 years building a product that gets traction, that has users, that provides us with exciting possibilities doesn’t matter if we cannot validate the fundamental element underpinning success: Whether we can turn it into a profitable business in the long-term.

We owe it to ourselves. We owe it to the vision we set out for ourselves. We owe it to those people whose lives we want to improve with our work. And, last of all, we owe it to our team. A team who have their own hopes and dreams, who are also fed up with failure, but see no alternative.

We have a moral obligation to ourselves and our team to change our approach and try a process that can actually engineer success for our product and for our business.

So ask yourself,

What kind of impact do you want to have in the world? Are you ready to change?

“But how can I change my team’s beliefs? “

Yet even when we know the pitfalls of conventional product development methodologies & are willing to try an alternative approach to build for product success, we come up against a difficult question:

How can I convince my team to believe it’s time to change?

It is no small feat to change the beliefs and actions of an entire team who have been taught - & habitualised to - a certain approach to how they should work and what the nature of work should be like.

Changing entrenched beliefs is always difficult.

Yet there is a way: A way I outline in detail in my book about what team culture is, how we can change it through small steps & how we can remould our team culture to help us focus on what really matters: Building something of value for our customers.

It is not an easy path, but it is the right path.

It is the path that lays the foundation for success, for ourselves and for our team.

It is the path that helps us ruthlessly focus on what really matters, achieving massive results, all whilst enjoying the journey along the way.


So let me ask you a question…

“Are you ready for success?”

What is all of your time and effort worth to you? What is the price of success?

100,000 dollars? 1m dollars?

What is all the time and effort of your team worth? Not just as a ballpark figure, but as a concrete cost each month?

Let’s say you have a few developers, two founders to support, office costs & a marketing spend. What’s the outgoing costs each month? $20,000 at a minimum?

And if all those efforts are being expended following a strategy that does not worth - following a methodology that limits you to failure - then each month the $20,000 is being burned with no tangible outcome. No way of moving you closer and closer to success. No clear progress towards success.

A year of wasted effort and you’ve burned through over $200,000 of your company’s very much finite, valuable money, with your runway to attain profitability and/or sustained growth getting shorter by the way.

You can download a chapter of my new book, Why Your Startup is Failing, for free. The information you get there for free is something worth paying for in itself.

The whole book? With concrete steps to build the foundations for startup success? If that refocuses your efforts on working in a way that actually helps you have impact and progress towards your goals as a business, then that is also surely worth more than the $15 you’ll pay for it, right?

And if you believe that you’re unable to change, that you want to bring radical change to your company but don’t know how, then I have a simple solution for you:

Message me for a free consultation. A chat about where your startup is out & how we can rebuild old habits, replacing them with robust foundations for success.

What would you pay for success?

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Henry Latham

Henry Latham

Founder, Prod MBA

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