Birth, maturity, and the promise of eternal life.

A search on Google for the phrase "business theories" produces an impressive 9.5 million results, while a search for "business books" produces a staggering 257 million. Anyone would think that the same theories and ideas are being regurgitated in an eternal cycle of unoriginality, but I'm sure there's more to it than that.

Most of us read a variety of books for our businesses, and I confess that my own spacious bookshelves are bursting well beyond their capacity. Yet the bizarre fact is that most of them are either not particularly useful, or at best, contain only one or two ideas that I consider to be interesting or worthwhile.

Of this small handful of ideas and techniques, very few of them are a good fit for my business, despite being somewhat interesting and entertaining to read. Yet a small number, often surprisingly simple in nature, offer something of immense value. One of which is the concept of the product life cycle.

The basic idea is that demand for what you sell will always follows a standard pattern, characterised by four distinct phases; introduction, growth, maturity and decline.

Introduction

This is effectively the birth of the product - for most software developers, the launch of version one of their application.

Costs will probably be higher than income, and market gain is very slight, if at all. If you're serious about making the product a success, high marketing costs to jump-start the launch can be expected, and as a result, profits are unlikely at this time. And while most developers know what to expect, watching expenses go out the door with very little coming in can often prove to be disconcerting, if not terrifying.

Growth

If introduction is all about birth, growth is effectively the childhood, adolescence and adulthood of the product, and most companies will recognise when their products have entered this stage. Regular sales should start to come in, patterns should emerge, and the company should start generating regular and consistent profits.

Graphs of sales, profits and forecasts should all start pointing upwards, and now is the time for the ambitious software company to aggressively seize market share.

Maturity

Birth and childhood are now a distant memory, and middle age, with its associated ailments and opportunities, is upon the product.

Life starts making sense, stability has become the norm, and many companies find themselves in the surprising position of not wanting to rock the boat and take any more risks. The temptation for many is to simply maintain the status quo at this point, and while new attempts to gain market share may be successful, they are likely to be costly. Growth, in the maturity stage of the life cycle, is more likely to be caused by external factors than internal expansion.

However, the product is still a long way from retirement, and opportunities usually abound. Especially if your competition have become settled and less hungry than in the past.

Decline

Decline is the final stage of the product life cycle, but it's worth noting that this is a long way from death! Decline does not mean that it's time to throw in the towel, but realistically, if new strategies are not introduced and the product does not adapt, a slow fade into obscurity is more or less inevitable.

Active steps are required to inject more life into a product in decline, and without regular and disciplined exercise, the product will simply waste away.

Inevitable or controllable?

Most businesses typically undertake the highest level of activity and the most work both before and during the introduction phase. And at risk of over-simplification, there does appear to be a correlation between companies who sustain the same pace throughout the first three stages, and higher levels of success.

Many companies seem to reach a certain point in sales where they are content, lose the urge to expand and are comfortable to rest where they are. And while there's nothing wrong with a company wanting to remain at this level, complacency is likely to lead to shorter growth and maturity cycles. "Staying where you are" really isn't an option where time, competition and market forces are working against you.

In fact it's worth remembering throughout the life cycle that no company or product exists in a vacuum. New technology, competition, emerging markets, changes in the economic climate and rival technologies can all have a major impact on demand for a product. A common mistake is to assume that most of the changes in demand for your product are only a direct result of your achievements and failures.

I get it, but why should I care?

Demand and supply are based on a variety of patterns, caused by different external forces exerting their influences. Almost every product conforms to the product life cycle pattern, so recognising where each of your products lie can only aid in developing strategies to increase sales, increase market share and extend the life of a product.

Understanding where you are allows you to plan ahead, and while there is much that can be done to prolong and increase the phases, each strategy must be relevant to its place in the cycle. Simply ignoring this is not a good approach, and may result in ill-timed activities, wasted opportunities and lost revenue. Be seen, live long, be sold.