Maturity

Why does it happen?

There are three reasons for a product to reach the maturity stage of its lifecycle:

  • Market exhaustion: This is the case for the TV in the previous figure. The TV market matured some 30 years after television was invented, that is, 100% of the addressable market that could buy a TV already had one. What was the solution that your manufacturers found to get out of maturity? In fact, they didn’t get out of maturity and eventually entered the last phase: the end of life. The solution they found was to create new TV products that could go through the entire lifecycle again. Today, television technology lifecycles are much faster, and the next technology starts its growth phase even before the previous technology leaves the same phase. Currently, TV manufacturers no longer wait for market exhaustion to create a new TV. They already use innovation as a way to force the current product to maturity and enjoy the growth phase of the new product.
  • Disruptive innovation: It is an innovation that helps create a new market and a new perception of value, and that eventually completely changes an existing market and its perception of value (over a few years or decades), rendering old technology obsolete ( https://en.wikipedia.org/wiki/Disruptive_innovation). This is the basis of the book The Innovator’s Dilemma, mandatory for all people who work with technology, by Prof. Clayton Christensen, Harvard professor and innovation consultant. Disruptive innovation is what happened to film cameras, with the arrival of the digital camera; or with cell phones that only made voice calls, with the arrival of smartphones; with traditional encyclopedias, with the creation of Wikipedia; and with CDs and DVDs with the launch of audio and video download and streaming services. Sometimes, disruptive innovation can be created by the same industry, as a strategy to defend against the maturing market. This is the case of the TV industry, which is launching SmartTVs, and the cell phone industry, with the launch of smartphones.
  • Programmed maturity: There is also a situation where the product owner, instead of waiting for maturity to happen, actively manages it. This is the case of TV manufacturers who barely launched plasma TVs, soon launched LCD TVs and then LED TVs, not allowing time for the market to saturate and anticipating maturity with the new version. This also happens in software product, mainly in installed software like Windows, MySQL, Nginx, Asterisk and several others. Anticipating the obsolescence of your product, your manager is already planning the release of new versions and the end-of-life process of previous versions. This process is usually very slow and, in many cases, traumatic. This is the recent case of Windows Server 2003, released in April 2003. It entered a state of programmed maturity as soon as the next version of Windows Server, Windows Server 2008, was released in 2008. As of 2008, it has lived in the of maturity; in 2010, it stopped being sold; July 14, 2015 was the date set by Microsoft to no longer support the product, that is, it decreed the product’s end of life. For online software products, scheduled maturity doesn’t make much sense, as the product is updated frequently and the user usually doesn’t suffer from updates. Of course there are exceptions, even for online products. There are cases where the product development team chooses to rewrite the product, for some reason, and decides to release a new version. In this case, it is important to understand that you will be putting the current product in a state of scheduled maturity and you must manage it as such. That is, you must plan the entire maturity and end-of-life cycle of that version, including thinking about what to do with existing customers of the version that will enter scheduled maturity and how to migrate them to the newest version of your product. This is something that should be discussed as one of the factors that can influence the product development team’s decision whether or not to go and develop a new version of their software product.

When does it happen?

It’s not too hard to tell when you’re coming to the maturity phase. If it is a programmed maturity, you will define when it will happen. If it is not programmed, just look at the growth of your product and notice that it is growing more slowly. Another point that happens is that growth; when there is, it will always be organic, that is, there is no point in investing in advertising and marketing as you will not have new sales no matter how much you invest.

  • Are we still focusing on the problem? As we saw in the Innovation: Focus on the Problem chapter, every product exists to solve a problem, and it is essential that the product manager never lose sight of this. When a product enters the growth phase, the focus often shifts from the problem to be solved to how to accelerate that growth. When this happens, the main tool that can help accelerate growth, which is the focus on the problem, is lost. When the product manager and product development team lose this focus, the chances of product growth starting to slow are very high, giving the impression that it has reached maturity. For years, we have had strong growth in Locaweb’s Website Hosting product. As I told you in the previous chapter, in 2012 we brought in a consultancy specializing in pricing, which after a lot of research and analysis, suggested changes to our hosting plans to optimize and increase our revenue and profit. The changes were in the limits of the plans and in the services included. Their suggestion was to reduce the number of sites per plan (there were already rare cases of customers who hosted more than one site per plan) and, to compensate, to offer included services such as WebChat, for chat service. As I said before, these changes ended up having no effect on revenue and profit at all, and we ended up wasting a lot of time and money on analysis to make these innocuous changes. But that wasn’t the worst. With the changes made, our Web Hosting product has gone further from addressing our customers’ problem. They came to feel that the product had less of the core feature and that we put in the additional services that made the product more expensive. Our customers ended up finding better solutions on the market. This affected our product, which slowed down considerably in 2013. As a result, we decided, more empirically, to do what we call a repackaging of the Website Hosting product, changing the limits based not only on data but also on our knowledge of customers. and your problems, and on all of our 15 years of experience with the product. With the change we made, which cost us much less time and money in its planning phase, it grew back at its old pace. Therefore, it is important for the product manager and his development team to never lose focus on the problem he solves, and to ensure that he is solving it in the best possible way. This example illustrates well what I said in the previous chapter when I said that in addition to metrics, you need to use other information, such as experience, intuition, judgment, and qualitative information, to make product-related decisions. The consultancy made us look exclusively at metrics, making us disregard all our empirical knowledge of the product.
  • Is the market slowing down? This is a second very important point to be analyzed when one observes a slowdown in growth. How are your competitors doing, are they also slowing down? And is the market as a whole slowing down? Are there any economic issues in your country or state that may be impacting your market? All of these issues should be evaluated when you start to notice a slowdown in your product’s growth.
  • Is there a disruptive substitute? This is the third point to consider when a product begins to show signs of slowing growth. Is there a different product category on the market that replaces yours? In the case that I mentioned about the slowdown in the growth of Locaweb’s Web Hosting, there was also a product category with strong potential to replace ours; were the website builders like Weebly, Wix, and SitePX. Since the first website building services, we have always been aware of this potential, which is why we launched our website building product to compete directly with Website Hosting as a solution to the problem of people who wanted to have one. There is also another problem that Web Hosting solves, which is the need to host and run web applications with a database. To solve this, there are application hosting solutions on the market today, such as Heroku and Google App Engine. With that in mind, we also launched our application hosting solution, called Jelastic Cloud. It is worth noting that disruption does not only exist in the technology used by the product. Business model is also a form of disruption. Locaweb launched its first Cloud version in 2008. We chose to maintain the same business model as Web Hosting, including disk space and transfer in the price and charging a monthly fee for the package. In 2009, AWS (Amazon Web Services) started to become well known for its Cloud Computing services, which were very similar to the technology that Locaweb offered. The big innovation came in the business model. Amazon chose to charge the services by the hour and to charge for disk space and transfer separately. Despite being a more complex way of charging, it had the attraction of charging only for what was used. When we launched Locaweb’s Jelastic Cloud, we also opted for this business model.

Next phase

If you eventually get to the point where the cost of maintaining the product no longer outweighs the return it gives, it’s most likely time to prepare for your next phase: the end of life, the subject of our next chapter.

Product leadership advisor

I’ve been helping several product leaders (CPOs, heads of product, CTOs, CEOs, tech founders, and heads of digital transformation) extract more value and results from their digital products. Check here how I can help you and your company.

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success, solve its user’s problems and achieve the company objectives? Check out my Digital Product Management bundle with my 3 books where I share what I learned during my 30+ years of experience in creating and managing digital products:

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Joca Torres

Joca Torres

Digital product development advisor, coach, and board member. Also an open water swimmer and ukulelist.