SaaS business

Introduction Stage of the Product Life Cycle: How to Get Through It Successfully 


min to read

27 Oct



Table of contents

You’ve probably heard that a good beginning is half the battle. This proverb describes the introduction stage of the product life cycle.

Launching the startup on the market evokes many doubts and implies taking risks. 

According to the Most Fascinating Startup Failure Rates in 2020 only 40 percent of startups bring profit. In the long run, 90% of projects end up with failure and about 20% of them break down during the first year of their existence. What makes the product go through the introduction period successfully? 

Eleken is a product design agency and we work a lot with startups.  New entrepreneurs often assume that an interesting idea plus a catchy website design will bring lines of customers wishing to make a purchase. We agree that a good product and appealing design are vital for your further prosperity, but it is not all you should know when bringing the product to the market. 

What is waiting for me at the introductory stage? What if I fail? Why do startups fail? How to prevent my product from shutting down at the beginning of its lifespan? We guess these and some more questions arise in your head when you are about to launch a new product. 

In this article, we are going to find answers to these questions. Let’s start with the basic characteristics of the introduction period. 

Key features

The product or brand life cycle consists of four stages, and the introduction period is the first one. How to identify that your product is in the introduction phase? It’s simple, once you launch it on the market and ready to start selling you are there. 

Sometimes the research and development stage is distinguished as the one that precedes the introduction. At that time you come up with an idea of a product or service and start working on it with a team of researchers, designers, and product developers. However, as soon as the product is ready for sale the introduction stage begins. 

The introduction is considered to be a risky phase that can bring either very significant gains or losses in the following product stages. Its main characteristics are: 

  • Low sales. When a new product is in the introduction phase the awareness of it is low and sales grow slowly. 
  • High spendings. To increase sales you need to acquaint as many people as you can with your product. You have to monitor the reaction of the audience to your product and search for different places of distribution. These actions need constant expenses.
  • Low competition. The great advantage of this period is a low competition or even the absence of it. It allows setting a beneficial price and gain a monopoly.
  • Little profitability. Even if in the case of highly effective marketing at this stage the sales go up rapidly this is not enough to cover production and promotion costs. 

There is no need to prolong the introduction period, as its main objective is to build enough awareness of the product to move to the growth stage. To do this quickly and efficiently you have to be familiar with challenges you can face during this stage. 

Challenges during the introduction phase

If your products are in the introduction stage, it means they are new and nobody has heard about it before. You just start finding out whether the audience accepts the concept of your service. This fact creates some challenges your startup has to face. 

Solid investments

The first great challenge is to have enough money to launch the product on the market. You’ve probably already spent a fortune on your project during the development stage. Of course, you can’t wait till it starts bringing profit. Be patient, further success requires solid investments. 

Not all the customers will be aware of your product at the beginning of its lifespan, in fact, most of the target audience won’t be. You need to spend heavily on the introduction of promotional strategies to spread the word about the product among potential clients. 

As well, you shouldn’t forget about the budget on distribution at this stage. Showing up in front of your customer in the right place raises the chance of sales. There are various online distribution channels like Amazon, eBay, Instagram, etc. Testing these platforms to choose the best variant for your product costs money.

Read more about Go-to-market strategies to make sure your product will bring revenue.

No profit or losses at the beginning

The second challenge is no profit or losses at the beginning. Initially, there is a low demand for the launched product. As is said above, most of your spendings goes on advertising and promotion. That’s why the product does not bring profit yet. Even if the sales go up, they actually don’t generate cash but only cover the cost you spend on promotion. You have to be ready to get over this period to move to the next stage. Monitor the growth rate to be sure the company's revenue increases and you are moving in the right direction.

Small market

The third objection is a small market. When first launching a product on the market you start selling it to early adopters. People won’t compare your product with somebody else’s, so you need to create a primary demand. Being a pioneer requires taking risks, finding distribution channels, testing the target audience, and attracting their attention. Obviously, sales usually grow slowly under such conditions and there is no guarantee for success. 

Even taking into account all the risks, entrepreneurs make mistakes that lead to the fail of the project at the initial stage. In the next section, we are going to analyze these miscalculations for you to be able to prevent them. 

Common mistakes in the introduction period

At the beginning of the article, we’ve mentioned that 90 percent of new projects eventually suffer a defeat. Let’s figure out the reasons for this disappointing statistic to be able to foresee them before creating the product.

The product doesn’t meet the need of customers

The main reason companies in the introduction stage go off the trail is they create the product that nobody needs. Of course, founders have done a great job developing their idea, but customers want to have their problems solved and won’t pay money for unnecessary things.

We can’t help mentioning here. was an online platform that allowed users to choose all the necessary stuff for their pets on the web site and get it delivered right to their houses. It was launched in 1998. They did a great job with marketing (their slogan and the logo were catchy) and gained great popularity by February 2000. In November 2000 announced itself bankrupt. 

The problem was that at that time you could easily find everything for your pet in the nearest local store. People had a choice to order online and wait for delivery, or to buy it in the nearest pet shop. As you can guess, most customers chose the second variant. Nowadays, Amazon provides similar services very efficiently, but back in 2000 that startup wasn’t in demand.

Lack of financing

Very often newly launched projects close down because they run out of money. Allocating funds correctly among each component of the project is a difficult task. 

If you’ve already read the article up to this moment, you understand that in the initial cycle the new product launch requires much spending on promotion and distribution. The mistake that businesses tend to make is they don’t calculate the cost they’ve spent on attracting the customer vs value that the customer brings them. The first index should never exceed the second. Otherwise, you risk suffering losses.  


peppertap example of product in the introduction stage
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Peppertap has made the mistake of spending too much on customer acquisition. Pappertap was a grocery delivery service set up in 2014. They started cooperating with local stores and managed to find the first customers very quickly.  Peppertap set a goal to create a solid base of dedicated clients. To reach this objective they provided users with beneficial discounts. This way they were working at a loss hoping it would bring them a long list of loyal clients. Eventually, this delivery service ran out of budget and shut down. Indeed, new product intro requires a lot of financing, but you should be very careful with your budget.

Poorly matched team

The next mistake you can make at the beginning of the product’s lifespan is choosing the wrong people for your team. No business will be profitable based on the idea only, it is the execution that contributes to the product’s future success. People who work with you should be diverse and possess different skills. Sometimes the founder thinks that he or she will be able to run the project only with the technical team. They try to perform all other duties on their own. Keep in mind, running a startup involves not only engineering but also many business aspects and it is very difficult for one person to cope with it. 


One of the reasons Devver, a cloud-based software tool for enterprises, shut down was a team issue. Due to the fact that both founders were technicians, they measured the progress of their startup by the quantity of written code. They didn’t pay attention to non-technical tasks like analyzing customers’ feedback, searching for new distribution channels, etc. 

In the Devver Blog, one of the cofounders writes: “Dan and I are both technical founders. Looking back, it would have been to our advantage to have a third founder who really loved the business aspect of running a startup”.

It’s better to be responsible when creating a team and make sure that each member does his job. 

Underestimating the competition

It’s true that one of the key features of the launching stage is the low competition level. Still, not paying attention to the competitors at all can lead to the failure of your startup. 

If the launched product is interesting and people start paying attention to it, be sure that very soon you will see similar offers on the market. 

If you decided to create a competitive product get ready that it would be difficult to make people stop using the service they get accustomed to. 

Learning about red and blue ocean strategies can help you cope with the competition.


vidme case study introduction stage
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Vidme is a video platform that was introduced as a new product in 2014. Its simple interface and ability to embed this player in any social network made it a potential competitor to YouTube. Vidme managed to gather more than six billion views and seemed to attract users’ attention. Still, they failed to convince the audience to stop using familiar platforms and switch to a new one. In 2017 Vidme’s team announced they close the project.

These stories about startup failures are here not to terrify you, but to help you learn from others mistakes. Launching a new product is risky but it is still worthy. With good preparation, you will be able to cope with the introduction period successfully. Here are some tips for it. 

How to prevent the failure of your startup

You should understand that there is no secret key using which will definitely save your startup. It’s all about being passionate about your idea and working hard. Still, there are some recommendations that can help.

Create a business plan

Writing a business plan is important as it can help with other aspects we are going to discuss in this section later. Think of a plan as a map that leads you to the final goal - transforming the startup into a profitable business. A well-prepared business plan guides you on how to operate your project and grow it successfully. A plan usually outlines up to 5 years of the product’s life. 

You can divide it into several parts, that is to separate marketing goals, from sales goals, etc. It will help you to view the objective picture of your business and prompt you to make the right decisions for further project development. 

A business plan is also very useful in encouraging investments. It helps to persuade a potential partner that a project is profitable and worth his or her attention. Funding is the next key to prevent the failure of the startup. 

Provide appropriate funding

It’s clear that running a business without enough capital is impossible. The sum of money you need for a startup varies in different industries and range from several thousand dollars to several million. Writing a business plan will help to determine the number of expenses for your specific case. The question is where to get this money? 

Top funding sources: Personal saings&credit, friends&family, centure capital, Angel investors, Banks, crowdfunding
Startup sources of funding

The graphic shows that the main source of fundings comes from personal savings. Very often the needed cost is much higher than the entrepreneur initially expects. Your business plan will be useful here again. It usually contains a financial plan which provides alternative funding sources. 

In case you need to find investors you may start aking your friends or family. You can also post info about your idea on special platforms for finding investors, like Product Hunt, Angellist, Republic, and others. 

Note, before presenting your startup to investors make sure you have an effective pitch deck design. It’ll help to make the right impression and get an immediate understanding of the core of your project. 

It’s impossible not to mention Airbnb here. Airbnb is an online platform that allows people to find and rent suitable apartments around the world. Its success story is amazing and shows how to grab the audience. Airbnb’s pitch deck had become a perfect sample for entrepreneurs all over the world known for its simplicity and clarity. 

As soon as you’ve found enough money for your startup, you can think of the next aspect.

Talk with experts

Most startups have a small team at the beginning of their life. The team usually consists of up to 5 people. These can be a founder, a couple of employees, and sometimes a manager. 

Starting a business includes more than creating a product or service. You need to register your company, get a federal tax ID number, and many other financial and law issues. That’s why it would be a great benefit to consult with a lawyer, accountant, and financial expert before launching a product. These people can help you save money and explain your obligations and responsibilities.

They may not be a part of your team, but talking with experts can help your business to avoid some unpleasant issues in the long run.  

Take care of the marketing aspect

We’ve already said that having a great product is essential, but there is no use of this product if nobody knows about it. 

Traditional ways of promotion like paper ads, advertising on TV, billboards, and so on are rather expensive and not so effective in today’s digital world. You have to learn more about SEO, SMM, SEM, email marketing, content marketing, and other digital marketing techniques. Distribute your budget on promotion among different channels to reach more people.

One more recommendation here is to think well about the design of your website. In case the ad campaign is effective and the lead is interested in your service a properly designed page promotes the user to try out your service/product. To understand better why the design is helpful here check the article Inspiring SaaS Landing Page Examples that Convert.


Product introduction to the market is not an easy task. There will always be some situations you can’t predict and control. Still, taking into consideration all the tips from this article will make you one step closer to a successful startup launch. While difficulties and challenges during the introduction phase will give you a valuable experience you will need later at the growth stage

Kateryna Mayka

Writer at Eleken