October 7, 2022
Creating a new product is a hard yet fascinating process. If you want to know more about the new product development process, check out our blog post.
People buy consumer products every day, like groceries, phones, mobile apps, movies, desktop software, and even home appliances. Not everyone thinks about how a product came to be, its path from the initial concept to the final version, and how it debuted on the market. But if you want to build a solid product that will be welcomed by your target audience, you will need to understand the peculiarities of new product development.
And new product development is hard. A lot of businesses fail in the very beginning when they can still barely wrap their minds around the idea of what they want to create. Even if you successfully formulate an idea, you would still need to go through the obstacles and pushbacks: analyzing your competitors, understanding the needs of a target audience, budgeting, developing the product itself, marketing, and much more.
You need to guarantee that your new product will satisfy the market demand and address the users’ pain points and a defined strategy can help you make it happen. Here is our nine-step guide on developing a new product and getting the best out of it.
New product development (or NPD) is the process of converting an idea into a real functioning product. This term refers to all business areas, from industrial production to healthcare, but in this article we are going to talk about software development, so that at the end of the new product development process will be a software solution (desktop, mobile, web, IoT, or cross-platform) that addresses your needs and the needs of your target audience.
An NPD is a well-structured process that leads to building a high-quality competitive product for your users. Usually, it includes seven to nine stages that are interconnected. The number of steps can be fewer or more depending on how thorough you want the process to be and what product you want to create.
Before talking about the nine-step strategy we offer, we are going to cover some benefits that such an organized software product development process can bring to your business.
We are not going to argue that developing a product from scratch is scary. There are tons of risks you can encounter at every stage of the process, but an efficient and standardized strategy will help you reach your goals with minimal obstacles and expenses. Here are more benefits of an NPD that you can get for your business:
The Bureau of Labor Statistics (BLS) states that around 20% of new businesses fail in the first two years of being opened and only 25% make it to more than 15 years. It can happen for a variety of reasons, from poor market research to not having enough time for it. Whatever the reason, if your business fails, the money you invested will be wasted.
An NPD process minimizes the risk of failure by providing you with a clear and structured vision of how to develop a new product that will be welcomed by your audience. Thus, your idea will have every chance to pay off and not just save, but add to your budget.
An NPD process promotes new ideas. To create a viable software solution, you will have to complete a thorough process of brainstorming, analyzing ideas, and choosing the one most aligned with success, innovation, and that corresponds to your business’ values. It means you can consider virtually any ideas that make sense and then evaluate them with the help of the NPD framework to determine how you’ll proceed.
The concept development for a new product is one of the first stages of the product’s lifecycle. Before the full-scale process starts, you need to outline your idea, considering the needs and desires of your future consumer. The new product development strategies will help you conceptualize your idea in meaningful consumer terms.
To do this, you can:
Pitch your concept to stakeholders and managers.
They approve or deny it depending on its business value.
If the concept is approved, it’s given out to test groups of your target audience’s segments.
Creating a new product is impossible to imagine without extensive testing. First of all, you will need to test all your concepts to determine which one will have the strongest market potential. Then, when the chosen concept is finalized, you will need to test it in the real market environment.
A physical representation will be the best option to test your product’s idea. For a software product, it will be a clickable prototype that your potential users can touch and see. Then, you can build a minimum viable product (MVP) to let the market itself validate your idea.
If you want to embark on software product development, an NPD process is a must. The testing options will allow you to prepare for the real market.
All the previously mentioned benefits contribute to this. The ability to involve your target audience in product development will positively affect its final quality. Throughout the process, you can use focus groups to collect feedback and apply multiple testing options. It will ensure that the final version will be just what users want and need. Additionally, decent product quality will help you build a good reputation among your audience and competitors.
The information and feedback collected during testing will help with building your marketing strategy. You will also have more understanding about how to address the users’ pain points if you conduct the audience and competitor research (which is a part of NPD). This will also help you set realistic KPIs for your team so they will know what they need to achieve and when they need to achieve it.
The three main parts of a good marketing strategy will include:
Defining your target audience and finding ways to connect with them (don’t forget about personalization)
Studying and evaluating vital metrics like the product’s final price range, distribution channels, marketing budget, and positioning
Building a long-term strategy on ROI and sales
Now, let’s move to the main part. We have prepared a nine-step strategy that will lead you through the process of building a brand-new software solution. These new product development stages are based on our experience of working with clients and building apps and websites of our own.
The first step in the software product development lifecycle is ideation. All software products start with an idea. But how do you come up with one? Technically, you can look for ideas anywhere. You may have some personal experience that you feel can be solved with an app, you can set up a brainstorming session with your employees, or you can even ask your potential users directly as a way to learn more about their needs.
All these ways will help you build up a pool of ideas that can possibly work out. They don’t all need to be brilliant—you can collect everything you find interesting and then filter them in later stages.
A lot of new businesses stumble during this stage. They don’t know where to start and how to proceed with idea generation. Here is a way you can get past this blocker:
Define the major pain points of your users.
Analyze them to see what you can work with.
Determine possible ways to solve them.
Create the final statement of problem and solution.
You can consider more ideation tools like the SCAMPER model. Each letter of this abbreviation stands for a way you can build your idea on the basis of existing ones:
Put to another use
The next step is conducting research or entering the discovery phase. You should never underestimate the power of research. Without this step, the chances of your idea failing increase drastically. Good research will help you save your money and understand if your idea has the potential to succeed.
How can you conduct research and validate your idea with the audience? Here are a few ways to do it:
Share your idea with fellow entrepreneurs on niche forums like Quora or Indie Hackers.
Set up an online survey for your potential users.
Go to crowdfunding platforms.
Research market trends and demands.
Discuss your idea with your family and friends (not the best option, but worth trying).
However, be cautious about the feedback you will get: The more objective and unbiased it is, the better.
Another part of the discovery phase is competitive analysis. Taking into account how fast everything is evolving now, your niche will most likely have a list of competitors that already occupy a particular market share. If you plan to surpass them and get in the spotlight, competitive analysis is a must.
The easiest way to do this is to visit your competitors’ websites or download their apps. You will see how they attract users and what features they already offer. You can also subscribe to their email newsletter or look for their ads to learn more about their marketing strategy.
With all these ideation processes and market research, the product can quickly go off the rails. That is why planning is essential in new product development. You can build a product roadmap so your team will clearly understand what they are doing and why.
The best and simplest practice of road-mapping will be drawing a series of sketches and wireframes that will allow you to understand what your software solution will look like. It will also set up the grounds for further prototyping.
There are more things that you have to consider during the planning stage:
Business analysis: It will include more detailed research of you and your competitors to create a clear roadmap for your team.
Key performance indicators (or KPIs): With the help of data received from research, you can identify the specific metrics for measuring your success and the possible ways to achieve them.
Value proposition: A value proposition is the main reason why users should choose you and not your competitors.
Monetization strategy: How are you going to make money from your app? What monetization model to apply? How to test various monetization models to choose the best one?
A prototype is a rough implementation of what the app’s final version will look like. Usually, it’s a simple clickable set of black-and-white screens. Why black-and-white? Because the beautification elements may distract you from the main purpose of prototyping—analyzing the product.
This stage is just as important as the research since it helps you save time and money. With the help of prototyping, you can spot core mistakes early and fix them right away. Iterating a prototype barely costs anything, but if problems aren’t identified early and lead to a bad user experience, the costs of fixing them later on will be huge.
The prototyping stage of the NPD process will also include:
This step means gathering all the possible sources needed to create the product that you want. For software development, it will mean the suitable hardware equipment, software tools, and experienced talents that can build the solution your target audience needs.
You have two main options here: hiring an in-house team or partnering with a third-party agency. If you hire in-house software engineers, you will always have the development team at hand. You will have more control over their actions and fewer cultural differences. However, remember that it’s a long-term and rather costly commitment.
A third-party agency will be relatively cheaper and provide you with a wider pool of talent. The commitment can be short-term, but if you like working with them or have another project in mind, you can continue working together. The most important risk here that you have to take into account is security. You will provide your partner with a lot of data, so make sure everything stays protected throughout the whole development process.
You can find more information about in-house team vs outsourcing in our blog post.
After all the previous stages are complete, you will need to have a clear understanding of how much money you will spend on the development. Costing is a process of gathering all the information you have by now and defining what your cost of goods sold (COGS) will be. The COGS is the total sum of costs your business paid related to the sale of products.
In this phase, you should focus on the design and on polishing the prototype. The end result here is a minimum viable product (MVP) that you can show to the focus groups of your target audience. You will receive initial feedback and iterate the MVP to move to the next step.
Now, the most decisive step—validating the viability of your idea. The market tests will provide you with more detailed feedback on what is already working well and what should be fixed or upgraded. There are two main types of tests: alpha and beta. Here is how they differ:
|Why?||Validate your product for further testing||Get real users' feedback|
|When?||When the development process is finished||After alpha testing|
|Who?||QA team, customer||Test group of end users|
|Get what?||Bugs, errors, freezes||Ideas for product improvement|
The final step includes the actual product development in the new product development process, launching your app or platform, and applying marketing efforts to attract users and sell your product. There are plenty of ways you can do this:
Email marketing campaigns
Partnering with influencers
Collecting reviews from early customers
And that’s it. Your product is now live, so you can analyze its success, update it, and adjust your marketing strategy.
The main objective of the new product development process is to create an excellent product that will not just serve the basic needs of a customer but also bring them something of value. A well-structured process will also ensure that the product is warmly welcomed by the market.
In this article, we have provided you with a nine-step new product development process, but it doesn’t mean you have to treat it like the ultimate truth. Depending on your business needs and goal, you can reduce the number of steps or add something more specific to your niche. The strategy we mention here can become a great starting point for building your own process so that you will set an example for how to successfully engage in new product development.
If you want to learn more about creating the NPD process or want to create a new software solution, feel free to drop us a line. We will book a call with you to discuss your ideas in more detail.
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