The Product Lifecycle and the Decisions at Each Stage

Why we use the lifecycle as a framework

The concept of the product lifecycle originates in the way of thinking that Theodore Levitt systematised in a 1965 Harvard Business Review article. It was originally a framework for marketing strategy, but in product management it is used as an axis for judging "whether now is the stage to act on this particular initiative." Mistake the stage, and you end up applying a growth-stage expansion initiative to an introduction-stage product — a failure in which budget is piled on top of premises that have not yet been validated.

The boundaries between stages are ambiguous and cannot be divided mechanically by a single figure such as revenue or user count. Even so, because the priorities of "what to optimise for" at each stage are to some extent shared, there is value in organising them as a template for decision-making.

Introduction stage — validating PMF is the top-priority decision

A product in the introduction stage is in a state where the hypothesis of "whose problem, and how, are we solving" has not yet been validated. The biggest decision at this stage is not about adding features but is narrowed down to confirming whether a small number of early users keep coming back to use it repeatedly. The metrics to track are not revenue or new-acquisition counts but the retention rate by cohort and whether users feel that "they would be in trouble if this product disappeared." How to measure product–market fit is covered in How to measure product–market fit. Investing in channel expansion or large-scale feature development at this stage is, in most cases, premature.

Growth stage — which to prioritise, acquisition or retention

In the growth stage, after signs of PMF have been confirmed, the axis of decision-making shifts to the allocation between "accelerating new acquisition" and "firming up the retention of existing users." Rush acquisition alone, and a large volume of users with weak retention flows in, with churn masking what is only apparent growth. The metrics to track at this stage are not a simple count of registrations but the cohort-based retention curve, which shows how many of the acquired users remain after a set period, and the single metric that drives the business's growth (the North Star Metric). The practice of metric design is covered in Designing and operating a North Star metric. That said, because in the early part of the growth stage experimenting with acquisition channels is itself part of discovery, it is worth noting that leaning too heavily on retention alone forfeits the opportunity to learn on the channel side.

Maturity stage — defending efficiency and retention

When the growth rate slows and the marginal cost of new acquisition rises, the product enters the maturity stage. The decisions at this stage shift their centre of gravity away from flashy new features and towards improvements that keep existing key metrics from dropping, and towards optimising acquisition efficiency (such as the ratio of LTV to CAC). The metrics to track are, rather than the growth rate itself, the "signals of deterioration" such as a worsening churn rate or an increase in support load. If the organisation's decision-making layer is dragged along by the success experience of the growth stage and continues expansion initiatives even after entering the maturity stage, it is slow to notice the deterioration in return on investment.

Decline stage — judging whether to prolong or exit

At the stage where usage begins to decline structurally, the nature of decision-making changes from what it was. It becomes necessary to make a judgment that looks at the entire business portfolio: whether to continue investing to prolong the product's life, or to redirect resources to other product lines and shrink it down in stages. This judgment is not one a PM can make alone; reaching agreement with the leadership is a precondition. That said, because the decline in metrics that appears in the decline stage is sometimes in fact not a contraction of the whole market but is limited to the churn of a specific segment, it is important not to immediately conclude from a drop in metrics that the stage is settled, but to break the drop down into its factors before judging.

Common pitfalls

The most common error is carrying growth-stage KPIs straight into the maturity stage. Keep chasing growth in new-acquisition counts in the maturity stage and you create a mistaken sense of crisis — "growth has stopped" — even when the state is actually healthy, and you tend to rush into unnecessary feature additions. On the other hand, the case of being overconfident that a product still in the introduction stage is in the growth stage, and rushing expansion investment, is dangerous in the same way. We recommend re-confirming your read on the stage each quarter against the trend in the metrics, and not leaving it as a fixed assumption.

Read next

For how to measure PMF, see How to measure product–market fit; for designing the metric that drives the growth stage, see Designing and operating a North Star metric.