The Product Development Process: How to Bring Your Product Idea to Life

The Product Development Process: How to Bring Your Product Idea to Life
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The Product Development Process

Just about anyone can come up with a big idea for a new product, yet very few people are able to make their grand idea a reality. Even fewer are able to turn their idea into a profit.

The two things that separate the "wantrepreneurs" from the entrepreneurs are perseverance and process. The journey of turning an idea into a reality is full of obstacles, and only those with a heavy dose of grit are likely to succeed. Still, entrepreneurs can increase their likelihood of success by following a series of steps that guide them along the way.

The New Product Development process is a series of steps that will help entrepreneurs successfully bring a product to market.

Stages of the Product Development Process

The path of product development is not exactly the same for every business or product. It varies with the nature of the industry, geography, product or service, etc... Yet there are some steps that are common to all product development journeys.

Idea Generation

The eureka moment of coming up with a new idea is one of the most exciting parts of the entrepreneurial path. It is a moment that is full of possibility about what "could be".

Creative types come up with ideas for new products all the time. As we go about life (or work) we often encounter problems and think to ourselves: "there must be a better way". Many of us will then imagine what that better way might be.

For most people, and most ideas, this is where the story ends. Most product ideas never get pursued - often because the person doesn't know where to begin, or because they think too much work or money is required to explore the idea.

Fortunately, we entrepreneurs have begun to learn that we don't need to commit much time or money to explore whether or not a product idea is commercially viable. We simply need to have a methodical procedure to research and validate our product idea, which is the second step of the process.

Research and Product Validation

The research step helps you confirm that your product idea has the potential to be successful. This research may take several forms:

Market Research

When exploring a product idea, you'll need to have a basic understanding of what is happening in the market. You'll need to know how many people might buy your product (i.e. the size of your potential customer base), which features/benefits customers might care about, and who your competitors might be.

In this step, you'll also want to validate your product idea.

In a nutshell, product validation is the process of researching whether or not your product idea is something that customers will actually pay for (and at a price that makes the product worth creating).
Product Demand - Be confident you’re creating a product customers will pay for | Shopify App Store
Be confident you’re creating a product customers will pay for

Competitor’s Analysis

A study of who your competitors are and how they operate in the market could give you interesting insight and help you with product innovation and product validation. Doing a SWOT analysis of your competitors can help you identify their strengths, weaknesses, opportunities, and threats. Take a hard look at where the gaps are - perhaps your company could fill them in with your new product.

Customer Surveys

If you want to know what your customers want, ask them! Inputs from customers can point you in the right direction with respect to product validation. Conduct customer surveys and encourage potential customers to participate. Meet with people in the industry and ask them questions about their purchase behavior, product use, unmet expectations, etc... If not conducting surveys in-person, keep the survey form short and simple so that people do not shy away from participating.

Keyword Research

Since a lot of shopping happens online, keyword research is a great way to do product validation. Google Trends is a simple yet effective tool that you could use and find what people are searching for. You can find the keywords related to your product idea that people are searching for the most. It could help you identify which idea has more weight, and what exactly customers are looking for.

Planning and Developing the Concept

In this stage, sound product ideas are turned into detailed product concepts. The product concept is expressed in terms that are relevant to the consumers. You can also draw sketches to show what the product would look like. This helps in understanding how the product will be projected to consumers, and how they will perceive it.

Prototyping

A sample of the product (called a prototype) is created in order to test the efficacy of the design. The prototype develops the concept into a concrete form. One can see how the product will look and function, and what materials should be used in its production.

Sourcing

Once you have developed a prototype, you know all the raw materials that will go into its manufacturing. Now you have to work on sourcing them, and also figure out their storage and transport. In short, you have to build a supply chain. It is best to obtain estimates from multiple suppliers/vendors for each element of your product so that you can compare costs and quality.

Costing

As you progress towards launching the product, you'll need to have a solid understanding of your Costs of Goods Sold (COGS). This metric will help you become profitable, which, of course, should be one of your top priorities. You'll need to use software to forecast your COGS, and you'll want to make sure you include things like factory setup costs, raw materials, manufacturing costs, shipping costs, storage costs, marketing costs, etc...

You've probably learned a lot about the necessary resources and the market in general since the research step, so use the costing step as a checkpoint to make sure that the product is still commercially viable.

Test Marketing

It is often a good idea to run a miniature launch of your product and marketing plan so that you can test it in an actual market. This is not a full-scale launch, but a small rollout to see how things play out in reality.

Through test marketing, you can find out what kind of response your marketing initiatives will generate. By conducting a small manufacturing run, you can gain first-hand experience in how your product will be produced, packed, distributed, and sold to customers.

Test marketing offers some interesting insights into consumer response around the product.

The Benefits of Test Marketing

  • Reduces risks of failed launch: The manufacturing, branding, and marketing of a product require massive investment. Imagine a company spending all that money only for the product to fizzle out in the market! With test marketing, a business can minimize losses. If your product performs poorly in test marketing, you can make necessary adjustments to it. If a product is found to have any defect, it’s easy to recall it from test markets.
  • Offers a chance to gain exposure: Rolling out a limited batch of the product can be a great marketing strategy in itself. If customers like your product, they are likely to come back for more. Test marketing is great for creating hype around exclusivity.
  • Offers a chance to gain useful feedback: Test marketing gives you crucial feedback about your product before you invest in its commercialization. You will learn things that your team wouldn't have thought of.
  • Allows you to obtain useful data: With a test launch, you can gather useful data on actual customer spending. It helps you understand customer buying patterns, and allows you to make informed decisions about the product's price, packaging, size, etc...
  • Allows you to communicate company values: A test run is a great way to show customers what they can expect from your brand.

Product Launch

Test marketing gives you additional information to help you decide whether or not the product should be launched. If the product gets the go-ahead, it is finally launched. This process is also called commercialization.

Many initial product launches come in the form of a Minimum Viable Product (MVP). An MVP limits a product's features to those that customers identified as essential. Additional features are added in subsequent versions of the product. Here are two quick tips:

  • Don’t wait for your product to be perfect: As the famous quote Reid Hoffman, the founder of LinkedIn, goes: "If you are not embarrassed by the first version of your product, you’ve launched too late."
  • Be open to course-corrections and discoveries: You might launch your product and discover that there is an unintended audience that is finding value in it. You should be willing to take advantage of such opportunities and align your product with the unintended market.
  • Think about the customer journey: Many businesses neglect the customer experience around their product. Every stage of the customer journey gives you a chance to differentiate yourself from competitors. Try to create a unique experience for customers when you launch a new product.

Collect and Analyze Data

Capture everything you can about how your customers purchase and use your product:

  • How frequently do they buy?
  • How often do people return the product?
  • How often do people report problems with the product?
  • What percentage of your customers are repeat buyers?
  • How are customers engaging with your online presence (i.e. social media, website, community, etc...)?
  • What is your Customer Acquisition Cost (i.e. how much does it cost to get a new customer)?
  • Which features do customers use the most?
  • Which new features would customers be willing to pay for?

Bringing it all Together

Launching a new product is a daunting task, no doubt. However, mountains are climbed one step at a time. The New Product Development process is a set of steps that can help anyone bring a new product to market.