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

This post is also available in: Deutsch (German)

Many businesses fail not because they have bad products – but because they don’t understand what customers really want. With the Jobs-to-be-Done (JTBD) method, you learn how to recognise customer needs and develop products that actually sell.

The most common reason why businesses fail

The figures are alarming: up to 90% of all new products fail, and 35-42% of all failed start-ups cite ‘lack of market demand’ as the main reason for this. But what exactly does that mean? Essentially, it means that companies develop products that nobody really needs – simply because they don’t know enough about real customer needs. This problem not only affects start-ups, but also established companies, whether in B2B or B2C, worldwide as well as here in Germany, Austria and Switzerland (DACH).

But why is this still happening? And above all: how can you effectively minimise this risk for your business?

Why a lack of customer understanding causes products to fail

In our report ‘Failing the customer’, we have analysed current studies and data from the last ten years together with UTXO Solutions, including

• CB Insights (‘The Top 12 Reasons Startups Fail’)
• MIT Sloan Management Review
• Accenture „Innovationsstudie“

The result is clear:

Start-ups fail most frequently (35-42%) because there is no real demand for their product. For established companies, as many as 60-90% of all product launches fail because they are not tailored to real customer needs.

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

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 this: 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 the direct line to the customer. Products are created in internal silos without sufficient reference to actual customer requirements. Examples such as Google Glass or ‘New Coke’ prove that investments worth billions fail if there is a lack of customer centricity.

The difference between B2C and B2B

Both B2C and B2B companies are equally affected:

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

Why traditional innovation methods are often not enough

Many companies are already using methods such as design thinking, lean start-ups and customer experience analyses. Nevertheless, the failure rates are still high. The reason for this is usually not the methods themselves, but the fact that they are only applied half-heartedly or superficially:

• No in-depth customer interviews
• No systematic survey of real customer problems
• No validated findings prior to product development

The result: companies often don’t even know what problem they actually need to solve.

Jobs to Be Done (JTBD) as a solution for real customer understanding

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

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

The JTBD method is based on structured, in-depth customer interviews and enables the precise identification of relevant customer needs before products are developed.

JTBD makes it possible to determine at an early stage whether a market need exists at all – and if so, what the product needs to look like in order to fulfil this need in the best possible way.

How Oberwasser Consulting and JTBD can help you

At Oberwasser Consulting, we have been working successfully with the Jobs-to-Be-Done method for over 15 years. Our team, led by JTBD expert Peter Rochel, has helped over 700 companies in Germany, Austria and Switzerland to systematically build genuine customer understanding and thus reduce the risk of product flops.

Our services include, among others:

• JTBD customer interviews: Precise analysis of real customer needs.
• JTBD workshops: Learn and apply the JTBD methods in your own company.
• JTBD Innovation Sprints: Develop validated product ideas within a few weeks.
• JTBD training: Train your own employees to become JTBD experts.

Concrete, measurable results thanks to JTBD

Our customers report clear successes through the use of the JTBD method:

• Significantly reduced failure rate of new product launches.
• Greater customer retention and loyalty because products meet real needs.
• Less waste of resources, as development costs are focussed on customer benefits.

The next step:

Do you want to make sure that your company does not ‘bypass the customer’?

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

→ Book a free initial consultation

FAQ:

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

Because these methods are often carried out superficially or without in-depth customer interviews. JTBD complements these methods with a real understanding of the customer’s job.

Is JTBD also suitable for B2B companies?

Absolutely. JTBD is particularly effective in the B2B sector, as there are close customer relationships and JTBD can be optimally utilised here.

How long does a JTBD project typically take?

From a short, intensive sprint (2-4 weeks) to comprehensive, long-term integration into the organisation. JTBD is very flexible and scalable.

Conclusion:

If you understand today what your customers really need tomorrow, the risk of failure is drastically reduced. The Jobs-to-Be-Done method gives you the tools to build this customer understanding in a targeted and effective way. This allows you to develop products that are successful – sustainably and predictably.

Oberwasser Consulting – Experts for Jobs to Be Done.
Let’s work together to ensure that your company doesn’t miss the customer.

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