Why companies fail – and how JTBD helps to develop products that customers really want

The most common reason why companies fail

The figures are alarming: up to 90% of all new products fail, and 35–42% of all failed start-ups name a “lack of market need” as the main reason. But what does that actually mean? At its core, it means that companies develop products that nobody really needs – simply because they do not know their customers’ real needs well enough. This problem affects not only start-ups but also established companies, in B2B and B2C alike, worldwide just as much as here in Germany, Austria and Switzerland (DACH).

Graveyard of irrelevant features: gravestones for dark mode, chat integration, AR preview, feature #96 and vanilla-flavoured barbecue charcoal (image text in German)

So why does this still happen? And above all: how can you effectively minimise this risk for your company?

Why a lack of customer understanding makes products fail

In our report “Scheitern am Kunden vorbei” (in German), we worked with UTXO Solutions to analyse current studies and data from the last ten years, including:

The result is clear:

Start-ups most often fail (35–42%) because there is no real need for their product. At established companies, as many as 60–90% of all product launches fail because they are not aligned with real customer needs.

Companies often lack in-depth customer insights, or they are not close enough to the market. The result: an enormous waste of resources, lost revenue and, ultimately, the failure of entire companies.

And if, as you read, you notice that you are about to make your next decision blind: our purchase-reason finding (Kaufgrund-Befund, in German) puts an interview with a real buyer from your market next to your assumptions. The analysis is ready two working days after the interview, for €1,900 net, fixed price.

See also our latest whitepaper: Bitcoin strategies with Jobs to be Done (JTBD) – how Bitcoin companies create sustainable markets through genuine customer proximity (in German)

What does this mean for start-ups and established companies?

Start-ups: no customer problem, no success

Young companies in particular urgently need to validate whether their business idea solves a real customer problem. Studies show that more than a third of founders realise far too late that there is no relevant market at all.

Established companies: customer needs underestimated

Large companies often lose their direct line to the customer. Products are created in internal silos, without enough connection to what customers actually want. Examples such as Google Glass or “New Coke” show that investments worth billions fail when customer focus is missing.

The difference between B2C and B2B

B2C and B2B companies are equally affected:

  • B2C: Around 50% of B2C start-ups fail because of a lack of market need – rapid customer churn and a lack of customer acceptance are common.
  • B2B: 44% of B2B start-ups fail because they misjudge willingness to buy or priorities. B2B customers churn more slowly, but here too, insufficient customer understanding leads to high losses.

Why traditional innovation methods are often not enough

Many companies already rely on methods such as design thinking, Lean Startup or customer experience analyses. Even so, failure rates remain high. The reason usually lies not in the methods themselves, but in the fact that they are applied half-heartedly or superficially:

The result: companies often do not even know which problem they actually need to solve.

Why do companies fail with classic opinion research?

Companies fail with classic opinion research because surveys and focus groups ask what people think about a product instead of reconstructing what they did at their last real purchase – this produces plausible answers with no explanatory power, and product, message and budget are built on a reason to buy that never triggered the decision.

This is rarely down to the sample. It is down to the direction of the question. The typical question is: “What matters to you when you buy?” And almost everyone gives an answer that sounds reasonable. But what customers give you as their reason for buying is rarely the cause. It is the explanation that seems plausible to them afterwards. In other words: a thousand answers show you the what, but not the why.

Then there is the analysis. Classic market research segments by characteristics such as age, industry or income and averages the opinions. And that produces a profile. But people buy in a specific situation, because a job has become urgent enough. So you need the script: what happened before someone bought, what made them hesitate, and what decided it in the end?

Take a manufacturer of sustainable yoga mats that we supported with Jobs to be Done. The team was sure the target group bought because of sustainability, and all the marketing revolved around it. A survey would only have confirmed this assumption. Four in-depth interviews that reconstructed the real moment of purchase showed something else: what decided it was the grip on the mat. One buyer said about her yoga teacher’s recommendation: “If she says I won’t slip on it, then I won’t slip on it.”

So the company put grip at the centre, with a yoga teacher’s recommendation and a 30-day guarantee on the product page. Sales rose fivefold, and the cost per new customer fell by 60 per cent. In other words: the difference was not made by a bigger sample, but by asking about the real moment of purchase.

Jobs to Be Done (JTBD) as the key to real customer understanding

This is where Jobs to Be Done comes in. JTBD helps you and your company understand systematically:

  • What problem do my customers really have?
  • What do customers want to achieve when they use my product?
  • What progress are customers striving for?

The JTBD method is based on structured, in-depth customer interviews and makes it possible to identify relevant customer needs precisely before products are developed.

With JTBD, you can establish early on whether there is any market need at all – and if so, what the product must look like to meet that need as well as possible.

How Oberwasser Consulting and JTBD help you

Peter Rochel has been working with the Jobs to be Done method since 2006, and since 2014 with Oberwasser Consulting. Our team, led by JTBD expert Peter Rochel, has helped companies in Germany, Austria and Switzerland build real customer understanding systematically in more than 700 client projects – and so reduce the risk of product flops.

Our services include:

  • JTBD customer interviews: precise analysis of real customer needs.
  • JTBD workshops: learning and applying the JTBD methods in your own company (in-house, from €14,500 net).
  • JTBD Innovation Sprints: developing validated product ideas within a few weeks.
  • JTBD training: training your own staff to become JTBD experts.

Concrete, measurable results thanks to JTBD

Our clients report clear successes from using the JTBD method:

  • Significantly lower flop rate for new product launches.
  • Higher customer retention and loyalty, because products meet real needs.
  • Less waste of resources, because development costs are aligned specifically with customer benefit.

The next step:

Do you want to make sure your company does not develop products that “miss the customer”?

Then contact us now for a free initial call. Find out how Jobs to Be Done can help your company develop products your customers really want.

→ Book a free initial call

FAQ:

Why do so many companies fail despite good methods such as design thinking?

Because these methods are often applied superficially or without in-depth customer interviews. JTBD complements them with a real understanding of customer jobs.

Is JTBD also suitable for B2B companies?

Absolutely. JTBD is particularly effective in B2B, because customer relationships there are close, so JTBD can be used to best effect.

How long does a JTBD project typically take?

From a short, intensive sprint (usually two to six weeks from the first interview) to comprehensive, long-term integration into the organisation. JTBD is very flexible and scalable.

Conclusion:

If you understand today what your customers will really need tomorrow, the risk of failure falls dramatically. The Jobs to Be Done method gives you the tool to build this customer understanding in a targeted and effective way. That is how you develop products that succeed – sustainably and predictably.

Oberwasser Consulting – experts in Jobs to Be Done.
Let’s make sure together that your company doesn’t develop products that miss the customer.

You can find more articles and podcast episodes on JTBD here:

Frequently asked questions: customer surveys, market research and JTBD

Why do customer surveys fail in product development?

Because they measure what people say – not what they did at their last real purchase. You get opinions instead of reasons to buy. Jobs to be Done instead reconstructs the real purchase decision like a script, not like a profile.

Why do new products flop despite market research?

Up to 90 per cent of all new products fail – and 35 to 42 per cent of failed start-ups name a lack of market need as the main reason. Classic market research segments by characteristics and averages opinions; that is not how it finds the job customers really pay for.

What is the difference between classic market research and Jobs to be Done?

Market research segments by characteristics – a profile. Jobs to be Done explains the purchase decision through the job the customer wants to get done – a script. One describes; the other explains why people buy.

Why does classic sales training not lead to additional deals?

It trains people to pitch better while missing the customer’s job. More pressure on the same mismatch does not close more deals – only when you know the job the customer wants to get done do you hit the reason to buy.

Why does classic management consulting rarely deliver new reasons to buy?

It delivers frameworks and slides, but rarely the verified reasons why your own customers buy. JTBD research works like an investigative interview: on the specific purchase decision, not on the hypothesis.

Why do companies fail with classic opinion research?

Because surveys and focus groups ask what people think about a product instead of reconstructing what they did at their last real purchase. The reasons given sound plausible but rarely explain the decision. That is why Jobs to be Done asks about the real moment of purchase: what happened, and what decided it in the end?

If this pattern sounds familiar: in the OC Radar I send you two or three signals between AI and customer understanding every two weeks, plus a case from our ongoing research. Short, concrete, unsubscribe at any time.

→ Subscribe to the OC Radar (in German)

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