Understanding Product Life Cycle Stages

We are surrounded chiefly by things that change with time, and we change ourselves. We also tend to create things that change.

In this article, we will examine how products change over time. Understanding these changes is essential for successful product management.

Let’s look at the chart of… well, of almost everything around us. It has some vital characteristics, v, and this characteristic rises from the ground to its highest point, stays there for some time, and then falls.

You may think of a fruit tree and its yields during the season, a cognitive ability during the day, or a rabbit’s maximum velocity during life.

You may also think of a product you create. v is its main derivative metric, which may be the number of users, revenue, or something else.

It is intuitive to add four points on a timeline – A, B, C, and D. The first is where visible growth starts from zero, the second is where visible growth stops, the third is where visible decline begins, and the fourth is where v falls to zero.

These points divide your product’s major life cycle stages. Let’s examine them one by one.

Development begins with an initial idea and lasts until the product’s launch.

During this stage, you, as a product manager, work with your team to create a product. You may need to prepare detailed product requirements, technical specifications, design mockups, and multiple checklists. Or you may need to talk to the team about your product vision. It depends on a formality level in your organization, and doesn’t actually affect the meaning of this stage.

In our chart, Development takes a period from zero to A, v=0. Your product’s crucial metric is not yet applicable.

The best thing about Development is that, in most cases, you have enough time to plan your actions to polish UI and UX, and bugs are only visible to your team now — and don’t cost too much.

The worst thing about Development is that you usually do not have customer feedback yet and cannot predict their behavior. To minimize this problem, you want to immediately test your product on real customers. Beta tests, early access subscriptions, and focus groups are used to obtain feedback even before the public launch.

The most important thing about Development is your ability to create a user scenario with core characteristics that will directly affect your crucial derivative metric v in the future. Such core factors may include user retention, conversion rates, lifetime value, etc.

The Growth stage starts with the product’s launch and lasts up to... well, while actual Growth is present.

From now and on you will probably focus mostly on marketing, scaling operations, processing customers’ feedback, suggesting improvements and monitoring results. This dynamic phase means that you accumulate your user base, expand your product to new cohorts, and work on increasing its core factors (retention, conversion, LTV) when possible. It leads to an increase of the derivative v.

In our chart, Growth takes a period from A to B, and v rises to its maximum.

The best thing about this stage is the feeling of discovering new lands around you. Your product has plenty of room for improvement, and the user base is far from depleted, so if you are good enough, you will go up and up.

The worst thing about this stage is that it ends. To stay in this phase for a long time, you must embrace a strategic approach. This approach will help you determine hidden opportunities, which can include technological breakthroughs, new geographical markets, or even pivoting to another user scenario.

The most important thing about this stage is that you should act fast. You often will need more time to plan your actions properly. You may need to be ready for scaling in a very short timeframe with minimal resources available.

The Maturity stage starts when the product reaches its best state and lasts until the start of a decline.

During the Maturity stage, growth stabilizes, and your product transitions into a 'cash cow'. This term refers to a product that has reached a peak in its market and is generating a steady, predictable value.

In our chart, Maturity takes a period from B to C, and v is flat at its peak.

The best thing about Maturity is that your product now has a heavy inertia. It is stable and not so easy to break, some mistakes are easily acceptable here.

The worst thing about Maturity is that opportunities to grow are often exhausted.

The most important thing is that you should keep your product here as long as possible. And it can be tough. If your product is successful, your team has probably already grown to a huge size, your processes have become bulky and bureaucratic, and your stakeholders would like to see some growth again (but from the current v, of course).

Decline starts when the product loses its peak position. Reasons vary, and market changes are often among them.

In our chart, Decline takes a period from C to D, and v decreases.

The best thing about Decline is that it is often a time for brave decisions that were not previously possible. When profits fall, stakeholders become more open-minded, and you may have better chances to get your pivotal plan approved than in serene times of Maturity.

The worst thing about Decline is that it breaks motivation. Your team may become pessimistic and lose their faith. You should think about how to support their morale.

The most important thing to know is that it is inevitable. It just happens, later or sooner.

Discontinuation starts when a product has no value anymore; it is stopped and abandoned.

In our chart, Discontinuation takes a period from D and on, and v is zero.

The best thing about it is that it releases resources for new activities.

The worst thing about it is that you may feel empty as a product owner after its end. Even if you didn't start the thing, you will likely be bonded to it by the end.

The most important thing to know is that even if your team decides to stop operating the product, you may still have some users remaining. It is always a good idea to care for them by warning them in advance, sending a goodbye email, and, of course, resolving all potential conflicts regarding paid services and customers' expectations.

Products in real life behave differently than in pictures. They often look more like these:

Yet day-by-day statistics may be confusing, you should always look for a long-term trend. Understanding the current stage will help you to organize your team efforts more effectively. You likely do not want to implement a dozen-level approval chain in a period of rapid growth; it will slow down your scaling capability. Intensive brainstorming and strategic sessions will more likely bring results when your product is mature and does not need 24/7 attention.

It is also useful to know that you may prefer one stage to another, and it is completely normal. There are product experts who specialize in young-growing products, gurus who work with mature products, and, of course, lots of professionals who deal with dying, declining products.

This topic is closely related to business strategy and organizational health, as both tend to be cycled exactly like products. If you are interested in learning more, I would highly recommend getting acknowledged to Ichak Adizes' ideas of the organizational life cycle ("Corporate Lifecycles" by Ichak Adizes) and Richard Foster's approach to S-curves in business strategy ("Innovation: The Attacker's Advantage" by Richard Foster.)