Why Software Products Fail: A Designer’s Perspective

It’s a tale as old as the tech industry itself: a product is envisioned, a strategy is laid out, teams are mobilized, and yet… it flops. Why does this happen, even when all the “right” ingredients—market research, an MVP, a marketing blitz, and sales demos—are in place?

Let’s start with some sobering facts. According to McKinsey, 70–90% of new products, 66% of software projects, and around 90% of startups fail. 

Having worked in design roles across various companies and industries, I’ve seen firsthand how products fail to reach their potential. Every success story like Slack or Canva, there are countless products discarded by tech giants like Google, Apple, and Microsoft. Google Wave, Apple Newton, Microsoft Zune—each was launched with fanfare only to be shelved later. The reasons for these failures are numerous and complex, ranging from organizational issues to a lack of understanding of user needs.

Why is success so elusive? Let’s first define what success and failure mean.

What Defines Success in a Product?

Success is relative. For a startup, success might mean acquiring 500 paying customers, while for an enterprise, it could mean hitting a $100 million revenue target. However, a globally accepted definition of product success can be:
“A product achieves success when it meets user needs, aligns with business goals, and generates sustainable value over time.”

Failure, on the other hand, isn’t always a bad thing. As designers, we know that failure can provide critical lessons. It can serve as a pivot point, help realign a vision, or indicate when to discard and restart with a new approach.

But why do products fail? From a designer’s perspective, here are some key reasons:

Top Reasons Software Products Fail

Here are the eight most common reasons products fail, based on my experience:

1. Vision Lost in Translation
A strong product vision often gets tangled in organizational complexities. Red tape, misaligned stakeholders, and lack of focus can lead to a product that strays far from its original purpose.

💡 Example: A product meant to simplify user workflows turns into a bloated tool with endless, unnecessary features.

2. Team Disconnected from the Vision
If the vision doesn’t resonate with the entire team—especially developers and designers—what’s built may fall short of what’s truly possible. Startups avoid this pitfall because their teams are small and agile, but larger organizations often struggle.

3.  Lack of User Research
Many companies skip user research, assuming stakeholders know what users want. This leads to products that focus on adding features rather than solving real problems.

💡 Example: Teams may prioritize flashy generative AI features when users actually need better integration with existing tools like Excel.

4. Not Solving the Right Problem
Products fail when they address internal assumptions rather than real user pain points. Leadership often relies on outdated knowledge, failing to adapt to rapidly changing market needs.

💡 Solution: Foster diverse leadership and robust research to stay aligned with user expectations.

5. Ignoring UX in CX
While Customer Experience (CX) often focuses on post-sales support and escalations, UX—the product’s usability and functionality—is critical to CX success. Neglecting this link results in frustrated users and churn.

6. Skipping Usability Testing
Without usability testing, teams lack insights into whether a product truly meets user needs. Rapid iterations, common in startups, allow for quick course corrections. Enterprises with longer feedback cycles often miss this window.

7. Misunderstanding User Mental Models
People’s mental models—how they think and make decisions—are shaped by years of experience. A product that feels intuitive to one person may be unintuitive to another.

💡 Example: A user accustomed to Excel for 20 years may struggle with a radically different interface unless it’s thoughtfully designed to bridge that gap.

8. Poor Timing
Even a well-designed product can fail if it enters the market too early—or too late. Timing is everything.

What We Learn from Failure

Failure isn’t a dead end; it’s a stepping stone. It forces us to ask hard questions:

• • Should we realign the vision?

• • Is it time to pivot or restart?

• • What can we learn to improve?

Some of the best innovations have come from products that initially failed. The designer’s role is critical in identifying these lessons and advocating for course corrections.

The road to a successful product is challenging, but understanding why products fail can help us design for success. By championing user research, aligning teams to a shared vision, and continuously iterating, we can build products that truly resonate and deliver value.