Product Development: The Ultimate Guide (2024)

  • Brandon Boushy by Brandon Boushy
  • 1 year ago
  • Blog
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Product developers working on a table

Do you have a great idea for a product, feature, or service, but have no idea how to begin product development?

We’ve got you covered! We’ve talked to numerous product creators that have had their products featured on Shark Tank. We’ll share their stories as we discuss the product development roadmap ahead of you. We’ll answer questions like:

Get ready to learn what product managers know about the complete process to a product life cycle.

What is product development?

Product development is the process of turning an idea into a functional product that people buy. Product development is commonly used in industries like:

  • Fashion 
  • Software 
  • eCommerce
  • Pharmaceuticals
  • Custom made products

Check out our interview with Ray, the founder of SoapSox. He talks about:

  • How he came up with his idea.
  • How he used crowdfunding to cover the costs of product development.
  • Challenges he faced while developing his products and market strategy.

Why is product development important?

Product development is important because it:

  1. Pushes the world forward.
  2. Provides insights into your customer needs.
  3. Establishes potential demand.
  4. Increases the quality of your products.
  5. Reduces the cost of failed projects.

Before we proceed, I think it makes sense to discuss some definitions that you’ll need to understand the rest of the blog.

Some terminology help

Concepts in this blog might be easily confused; many of the best product management techniques are derived from the fields of project management and software development. There are a few terms that are heavily interrelated, but important ones to understand include:

  • Methodologies
  • Frameworks
  • Strategies

We’ll describe each of these in the following sections.

Product Development Methodologies

Screenshot of thedigitalprojectmanager website

Methodologies are the most prescriptive and narrow range of rules to follow. Many of them involve certifications and professional experience to truly master. For instance, a pharmaceutical company won’t be able to sell a drug without going through the FDA drug trials.

Methodologies have a dual meaning though. Product management and project management will often use terms like “agile” methodology or Lean methodology to refer to a set of tools and procedures when there is plenty of room to expand, remove or alter the product development process. In fact, there are more than 42 agile methodologies

There are also “methodologies” that don’t use an agile approach like the waterfall product development process where each step is separate from the others and there are no iterations. A car company or a construction company would normally use these processes because you can’t build a house without first clearing and flattening the space to lay a foundation (unless you are Boxabl… PS: If anyone at Boxabl reads this, we want to talk to you).

Want to know a bit more about the three product development processes mentioned above? We’ve got you covered.

Agile product development

This approach to the product development process is commonly used by software developers because it helps bring product launches to life quicker because they can add features as they go. They build a minimum viable product and then upgrade it. The approach will normally work like this for each feature: 

  1. Gather information
  2. Design
  3. Build
  4. Test
  5. Review
  6. Launch

Agile product development

Check out ProductPlan’s article on agile product management.

Lean product development

You might also consider lean product development, which is focused on the end product over features. It also takes into consideration the lifetime cost of use when developing the product. 

Check out John Drogosz’s comparison of these strategies. It’s a free mini course on the product development process in agile and lean methodologies. It also discusses the waterfall method which we’ll discuss next.

Waterfall product development

System development lifecycle

If your business is focused on non-technology products and services, this method of product development will be used for many products created. It will normally follow some or all of these steps:

  1. Idea generation: In this phase the product development team is looking for product ideas that will fulfill customer needs. If you don’t have a team, you can throw around product ideas with your friends, mentor, or hire advisors.
  2. Idea screening: This part of the product development process refers to eliminating ideas that your company cannot reasonably implement. For instance, if you need a billion dollars, you probably need to nix the idea. Lack of skills or the time to market might be other reasons to abandon a project, especially when 41% of projects fail to meet their deadlines. User feedback and market research surveys are ways to find out if potential customers would buy the product concept. This is the point when it is least costly to eliminate product ideas.
  3. Concept development: This is the latest you want to get the customer involved. You’ll want to pursue user feedback, market research surveys, or other means of establishing whether potential customers would buy the product concept. This is the point when it is least costly to eliminate product ideas. This can be as inexpensive as printing a t-shirt and wearing it.
  4. Market strategy: You’ll want to identify the product marketing strategy during this product development phase. You’ll want to consider the four P’s of marketing: product, price, promotion and place.
  5. Business case analysis: In earlier stages of new product development, you were focused on if they would buy the idea. Now you are trying to figure out whether the idea is worth the cost of business resources and time that will be expended.
  6. Technical design: This part of the product development cycle is focused on turning the prototype into a functioning sellable product.
  7. Product roadmap: I would typically want a product roadmap created much earlier because getting operations, marketing, finance, and production involved this late in the game will hinder the ability of other departments to really impact the concept development.
  8. Test marketing: You’ll want to do more market research to validate the entire product, including the packaging, advertising, and distribution. You’ll perform test marketing by presenting the final product to the target market and gathering input. Given the cost of market release, you want to make sure the product and its packaging are acceptable before you start paying for mass production, a marketing campaign, and shipping.
  9. Product launch: This is the market introduction to the product. You’ll be making the target market aware of your offering and start to develop market share based on how well you meet the market needs. 

As you can imagine, this process has the ability to lead to major losses if the target market rejects the product. That’s why most major companies begin market testing very early in the process and have started agile approaches.

You don’t have to follow a development process to be successful

Shed Defender is a product that Casey Walter created because:

I got tired of my friends complaining about my Saint Bernard shedding. People used to laugh at me when I created a onesie for a dog, but it didn’t stop me.

The first product was sewn by his mom. Then he paid a seamstress to hand sew a few a week. Then he had a viral video that required buying fabric and sourcing, which required a $30,000 loan. So he had virtually no money invested through the prototyping phase. Now he makes millions a year.

Product Development Frameworks 

These are the systems and concepts that are in place to meet the goals. These may be dictated or controlled by senior management, governmental organizations, or organizational bodies. The International Organization of Standards (ISO) provides a variety of frameworks that are internationally accepted as best practices including:

I’d suggest familiarizing yourself with them or looking for contractors who specifically have product management experience utilizing these codes. They also specify the standards for how time and date are displayed. You’d be surprised how detailed some of the requirements are. 

What Is Product Development Strategy?

Screenshot of craft.io website

Product strategy planning is similar to creating a business plan, but the product strategy accounts for changes better. A product development strategy provides a plan or framework about:

  • How to find opportunities to build your product line.
  • How to decide which opportunities are good ideas.
  • How to build upon the opportunities.
  • How to spread word about the new products.
  • How to monetize the new products.

Check out the Craft.io product strategy template to build a better product development strategy.

Product Portfolio Strategies

Companies may use a combination of proactive and reactive strategies to build a product portfolio development. You might want to consider some of the following strategies and make a plan for how to decide which works best in different scenarios.

Proactive and reactive strategies

How to create products

Many business owners may not want to go through the new product development process, at least not as it is formally performed. They’ll often use a crowdfunding platform like Indiegogo or Kickstarter to get initial feedback, concept testing, and funding before the final product is even created (sometimes before it’s even started).

Using these platforms is a great way to:

  • Gauge interest
  • Connect with prospective customers
  • Perform feasibility analysis 

In fact, we interviewed Jason who is a product development engineer that started Pooch Selfie with less than $8,000 of his own money. He told us:

I created a prototype and put it on Kickstarter. I got crickets for about a week. Then Buzzfeed put a story out there and my Kickstarter just exploded. Three days later, I had raised $40,000 on Kickstarter.

Check out our interview with him below:

We also feature him in our manufacturing blog.

What is the product development process?

While there are numerous methodologies that the product development process may include, they all have the same basic steps:

  1. Brainstorm ideas.
  2. Evaluate the feasibility of the product idea.
  3. Turn the idea into a set of specifications.
  4. Create a minimum viable product.
  5. Gather input.
  6. Bring the product to market.

What is the first step in the new product development process?

The product development process starts with idea generation. This is simply looking for new ways to serve your customers better. Idea generation can come from sources like:

  • Customer feedback
  • Sales team observations
  • Marketing team suggestions
  • Design team limitations
  • Proposed business model
  • Distribution strategy
  • Feature requests
  • Competitor advancements in the field
  • Other industries that have advancements
  • New technology that allows you to create lighter more efficient products
  • Science fiction movies (I’m still waiting on a replicator from Star Trek. I hope it works better than the one below, though.)

In product development, what are the specifications?

Specifications are the requirements that a product development team needs to meet for the product to be considered a success. These are normally communicated in a product specification sheet. Depending on the industry standards, these may take on a variety of forms, but they will normally answer the following questions:

  1. What problem are you trying to solve with the project concept?
  2. Who will be using the product?
  3. What are the high-level processes the product development team needs to follow?
  4. What features does the product development need to include?
  5. What limitations should the product team take into consideration? Finances? Brand guidelines? The margin of error? Pricing points? Timeline? 
  6. How will it work within existing product lines? Does it need to integrate with existing products? Does it need new equipment to create?
  7. Do you have the supply chain to create the finished product?

Let’s look at some of the common specifications used by different industries in the product development process.

What is product development in fashion?

Screenshot of fashion start up consultant website

The product development process in the fashion industry will normally follow a process similar to the one below:

  1. Draw, design on a computer, or find photos that show the inspiration for what you want the product to look like.
  2. Find materials you want to use. 
  3. Find a seamstress to help you create a prototype.
  4. Adjust the prototype to fit properly based on your target customer.
  5. Create cut sheets and tech packs
  6. Source and manufacture in bulk.

Tech packs include a front and back picture of the item, color specifications, special design considerations, zipper standards, embroidery or print standards, measurements for each size, and how to use the measurements. 

Software Specifications

Screenshot of smartsheet website

Software specifications have a very different set of requirements than fashion and physical products. With software you have two major aspects that need to be specified: user experience (UX) and workflows (what goes on behind the scenes). The product development process for these will normally follow a process that look similar to this:

  1. Requirements analysis: What are the end user goals? How will they use the software? Does the software need to work offline on mobile devices? How fast does it need to be (200 ms is considered perfect from a speed standpoint).
  2. Create specifications for a minimum viable product.
  3. Create wireframes or a prototype to show what the user will experience once the software is complete. These are just graphical representations. They aren’t fully functional. 
  4. Upon approval of the prototype, start building the backend and optimizing the software for performance.
  5. Deploy to beta testers.
  6. Fix major defects.
  7. Release to target market.
  8. Provide technical support.
  9. Add new features and improvements.

If this process sounds familiar, it’s used with every major tech company you interact with. There may be some variations, but the process is basically the same. The most important thing to understand about the software product development process is that it consistently uses scrum, lean, or agile methodologies where the end users are actively involved in the entire process.

Smartsheet offers a good free product software development spec sheet.

How can a company’s salespeople help with product development?

Your salespeople, customer service representatives, and marketing team should be an instrumental part of the product development process because:

  • The sales team is customer-facing, while you might be more focused on the management of the company, employees, and financials. 
  • Good employees are a great source of idea generation because they know what the customers ask them. 
  • They know what challenges they currently have supporting existing products.
  • Salespeople can help find external beta testers.
  • They’ll spread the word as the product development project approaches a finished product.
  • Sales team involvement will create a better overall product launch because the marketing strategy, sales strategy, and pricing are discussed earlier.
  • Your team will be able to make a better business case to your target audience.
  • They can warn you when you are about to invest thousands or millions in a product that won’t meet users needs.

What is the product development life cycle?

The product development lifecycle is a representation of the phases that a product goes through from development to retirement. Every product will undergo six phases:

  1. Product development
  2. Product launch
  3. Increased adoption
  4. Peak market share
  5. Declining demand
  6. Retirement

During each of these phases, each part of your business will need different strategies. The timeline for each product will be different, but the product life cycle will require actions similar to the table below.

Product Development Product Launch Increased Adoption Peak Market Share Declining Demand Retirement
Product Development Creating product Improving product Improving product Maintaining product and starting new product design Maintaining product Discontinue service
Sales Giving input, learning about features, and which are most important Educating customers, focusing on early adopters Answering customers’ questions, providing more in-depth detail for more hesitant customers, implementing best practices from prior sales People ask for the product by name, upselling more People still ask for the product by name, upselling more, less frequent purchases, higher discounts Do not actively sell; if asked for, let people know that support is discontinued, suggest alternatives
Marketing Giving input, market research, designing launch campaign Educating customers, focusing on early adopters, monitoring results Campaigns focused on customer results, continue monitoring results, optimizing Keep the product fresh in people’s minds, monitor for signs of declining demand Campaigns for sales and upgraded models, lower product marketing budget, focus on newer products No marketing budget
Finance Controlling Budget and Payments Comparing revenue and expenses, increasing budget to marketing as performance Increases Continue monitoring and increasing investment based on performance Continue monitoring and increasing investment based on performance, decrease marketing budget Try to keep margins similar with decreased volume, adjust product budget routinely Summarize the lifetime return on the product for future reference
Inventory Providing input, receiving original stock Delivering product, reordering inventory Delivering product, reordering inventory more frequently Delivering products, monitor shifts in demand carefully to adjust orders Reduce size and frequency of orders No more orders, sell remaining at deep discount
Customer Service Providing input Providing customer support Provide customer support, should have more detailed FAQ and scripts Everything should be standard operating procedures by now Continue supporting the product, when you know the discontinuation date make sure to remind people and suggest upgrades Continue providing the FAQs under discontinued products, but no manpower behind it

What are the 5 stages of product development?

The five stages of product development are:

  1. Idea generation
  2. Product idea screening
  3. Concept development
  4. Product development
  5. Monetization

We should go over some variations that development teams might consider during different development processes.

What are the steps of internal product development?

Internal product development is focused on creating a product for your team to use. Normally, this is software or products that will help you do your job easier. The second and third steps of product development are most important to focus on:

  1. Idea generation: Start by defining the problem(s) you are trying to solve. You’ll want input from all employees who will be impacted.
  2. Product idea screening: Does the idea solve the problem? What new problems could it create? Is it cost-effective? Which appears to be the best solution?
  3. Concept development: Here you’ll want to focus on evaluating the best ideas further and answer the following questions: Do you have the ability to implement the idea in-house or will you need to hire subcontractors? Is the current work creating the expected results? Should alterations be made?
  4. Product development: Does the solution work effectively? How are you going to train the team on the product? What bugs need to be fixed?

There should be considerable focus on the idea screening and product concept in the early stages. The product manager should perform a business analysis to verify that this product strategy will work within the organization. The product team might lack necessary skills that would hinder the success of the product’s entire journey. This can lead to costly hiring and delay the product vision in competitive markets.

What are the steps of external product development?

External product development is focused on finding a proposed solution for customers. The phases here are similar to internal product development, but have some key differences:

  1. Idea generation: Use customer feedback, surveys, and analytics to find ideas. 
  2. Product idea screening: Establish whether the idea makes sense by presenting it to customers before spending a lot of money.
  3. Concept development: Improve the idea using customer feedback.
  4. Product development: Build the product and gather information on whether it solves the customers’ problem.
  5. Monetize: Marketing should kick into high gear. Start monitoring customer feedback as more people buy the product.

What are the steps of concurrent product development?

Concurrent product development is simply another strategy like lean, agile, or scrum. Product managers will conduct a team that includes design, developers, accountants, marketers, and manufacturing from the start. The process will look something like below:

  • Business owner has an initial concept to serve a target audience.
  • Employees from all departments ask questions to evaluate the product concept.
  • Each department works on their pieces in parallel and shares with others frequently.
  • By the time the new product is ready for manufacturing, the team is ready to launch.

This process can potentially reduce the time and money spent during each stage of new product development dramatically, but it is more complicated for the product manager because there are more moving parts in the process.

An engineer who needs to manage new product development might use what type of software?

The Product Manager, a site that produces blogs and podcasts about product management, ranks the 10 best product management tools as:

  1. Planview: This software is supposedly phenomenal for enterprise-level organizations. (I have not tested it, though.)
  2. Monday.com: UpFlip and Monday.com have a partnership, and we consider Monday the best overall CRM and project management tool. You will definitely want to work with their support because many of their features are complex. 
  3. Craft.io: This program has two 5-star reviews on Trustpilot, and they say it is easier to use than Aha or ProductPlan. Check out the Craft.io site for more information. This software is particularly good when you need help prioritizing features.
  4. Walling: This software for product development is most helpful for visualization with mood boards and easily viewing inspirational ideas to understand better what people are thinking. It has a 4.5 to 5-star rating on different review sites. People seem to like it, but we haven’t tested it.
  5. ProductPlan: This software was built by a long-time product manager who found existing product development software lacking. It’s built with successful products in mind, but the only Trustpilot review says that half of the software is intuitive and the other half overcomplicated.Screenshot of productplan website
  6. ProductBoard: This software is built for customers to be highly involved in the process. It seems to do well and has 4.3 to 4.7- star reviews on different sites. I might test ProductBoard because there’s a software product I want to create.
  7. ProdPad: If you want software with AI for business analysis built-in, this is probably the product life cycle software for you. It helps identify easy wins and resource-wasting ideas to make your development team more efficient.
  8. Dragonboat: This product development software is focused on making it easier to manage your organizational performance regarding objectives and key results (OKRs). Dragonboat makes it easy for you to see where you are in the product roadmap and how it connects to the OKRs.
  9. ClickUp: We use ClickUp at UpFlip to manage our content. It has a product management template that I set up to check out. It’s fairly basic but covers everything you need from an operational aspect during the design process. Check out more useful ClickUp templates.
  10. Airfocus: The Airfocus platform is a newcomer that seems to be receiving a lot of recognition for how it functions. It has four 5-star reviews on Trustpilot and focuses on product roadmap prioritization and presentation.

Other useful software you might want

Small business owners might also want to use software like:

  • Canva: Easy software for graphic design and social media marketing. I spent 66 hours using Canva for 180 designs in one year. It works for business cards and t-shirts, too.
  • Autodesk Software: Autodesk is a leader in engineering software. You can use their inventor suite to design products, but it’s pricey.
  • Google Forms: Use these to gather initial feedback and responses as you test marketing. They have just enough functionality for the product manager to evaluate the results quickly and are included if you use a Google business email. 
  • Upwork or Fiverr: Both Upwork and Fiverr are great places to hire freelancers to help accomplish your goals without hiring product development companies. You can hire a top rated product development manager or hire a freelancer for just one aspect of the process. 

What is your experience with product development?

We’ve provided you with product development examples, development framework resources, different approaches to product development management, and software you can use during the phases of product development.

The new product development stages are a complex mix of a lot of skills. You should consider hiring people with product design and development experience to help you succeed faster. 

Have you created a product before? What challenges did you face? What would you do differently now?

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