For a product manager, it’s important to understand the various stages that products go through during their lifecycle. The following four broadly-defined stages constitute the product life-cycle:
This article will introduce you to each of these stages as well as examples of products in each to help you better identify them moving forward.
The introduction phase of a product’s life-cycle is defined by the following:
- There have only been a few iterations of the product thus far
- The product’s direct competitors are few and far between
- The product is currently losing money for the organization
- The only people currently purchasing the product are early-adopters.
An example of a product at this stage of its life-cycle is a product called Halo Sport — a product that uses electric signals to stimulate the part of your brain responsible for muscle movement. The product fits the bill for the following reasons:
- Currently in its first iteration
- Little to no competition at the moment
- Primarily used by early adopters — it has only 106 reviews on the Amazon page.
The growth phase of a product’s life-cycle is defined by the following:
- Product has been accepted by the marketplace and sales have started to rise
- The offering has been through various iterations and the product is starting to mature
- Marketplace for the solution is relatively more crowded
A company in the growth stage of its life-cycle is Square for the following reasons:
- The company has progressed from its first ad-hoc Point-of-Sale (POS) offering — one requiring an iPad — to an all-in-one POS
- Sales have been rising and the their stock price has almost tripled through 2017
- The offerings are starting to become mainstream and the competitive landscape is starting to heat up
The maturity phase of a product’s life-cycle is defined by the following:
- Sales are starting to slow down — it is hard to know this in the moment and therefore this factor is only evident in hindsight
- Competition becomes even tougher than it was in the growth phase since competitors are starting to enter this category en-masse as the market opportunity is becoming widely recognised as one that is lucrative and/or strategically important.
An example of a company at the maturity stage of its life-cycle is Snapchat for the following reasons:
- The number of new users joining the platform is starting to slow
- A number of competing offerings — Instagram Stories, Instagram Direct, Messenger Days, among others — have flooded the marketplace as the product is seen as key to reaching a younger demographic and the advertising revenue that comes from entities looking to target said demographic.
Products or companies in their decline phase are defined by the following characteristics:
- Sales begin to diminish
- Products are being phased out.
When various key metrics — daily active users, monthly active users, install base, etc. — are plotted over time, the resulting graphs come to resemble stretched out ‘S’s. These graphs are known as S-curves. During the introduction phase, the metric just starts to pick up and forms the base of the curve. In the following phase — the growth phase — the numbers skyrocket and we see the formation of the trunk of the shape. During the following phases — maturity and decline — we see the slope come back towards zero, become flat, and form the final part of our stretched out ‘S’.
A great example of a product during whose life the four stages — introduction, growth, maturity, and decline — are discernible is the personal computer. As is evident in the S-curve graphic above, the PC was introduced in the early-1980s and was slow to gain traction. This was the phase during which there had only been a few iterations and product-market fit was yet to be determined. Following this phase, sales started to pick up and there are two discernible phases of growth — a few years following 1995-2000 and 2005-2010. The former time-period saw the maturation and subsequent domination of the Windows ecosystem and the latter saw increased global adoption of the PC. Between 2010 and 2012 we can start to see the PC installed base slowly amble towards the 1 billion mark and plateau. Thereafter, the industry enters into its phase of decline as more and more computational tasks — those that were previously best-handled by PCs — can be performed just as well, if not better, on devices such as smartphones that are still solidly in their growth phase.