A Guide to Startup Product Development

Introduction

Maybe you already know you have a disruptive idea for a product you want to bring to market, or you know you want to pursue entrepreneurship, but you’re still on the hunt for the next big idea. Either way, you’re going to have to go through the process of startup product development to take an idea to an actual product you can sell to customers.

But what does the product development process entail? Following a product development strategy will involve a lot of hard work to research your market and competitors, develop a prototype, test the prototype, and ultimately launch the product. The startup product development process doesn’t stop there, either. Through sales and feedback, you’ll continue tweaking and perfecting your product until it’s time to start the process over with your next launch.

So why is this process important? If you have a good idea, can’t you just get started on launch? That’s not the best idea if you want to build a successful business. Of the thousands of new products that are released in the U.S. each year, about 85% of them fail, often due to poor research and planning as well as failure to listen to feedback.

But by following the startup product development process closely, you’ll be able to sidestep these mistakes and build a more viable product for your target audience.

What is startup product development?

Startup product development is the process, structured or not, that a startup follows to turn an idea into a commercialized product. Every startup will follow a product development process, whether they use a structured framework, like the popular New Product Development (NPD) process or they forge their own path through trial and error.

The startup product development process

The process of creating a product can follow many different paths, but generally, it needs to start as an idea, move on to a research phase, go through testing, and finally be prepared for launch.

The startup product development process generally includes the following seven steps:

Generate ideas

Startups will need to begin with an idea, whether they already have one in mind or they need to go through some rounds of brainstorming. Maybe you know an industry you’d like to disrupt, but you’re not quite sure how to do that yet. Or maybe you can envision a cool new tech gadget, but you’re still determining what industry or market it will fit into best. Startup leaders can arrive at their ideas in a number of different ways, and you may even land on a few top contenders. Through the next step, research, you’ll determine whether or not these top ideas or your singular idea are viable enough to start designing a product and developing a business plan.

You can get really creative with brainstorming ideas, but you should always keep in mind how each idea will address a need that your potential customers have and whether these ideas are already in the market. If so, you’ll need to think of ways that your product will stand out.

Do the research

Even the idea-generating stage involves some research to make sure an idea is worth taking to the next phase of the startup product development process, but this step is where your team will need to get more granular with the details. Some topics you’ll need to research include:

• Industry: Review industry trends and forecasts to make sure your idea will suit the industry you want to launch in.
• Target market: Explore what your potential customers are looking for in a product, and consider gathering feedback from potential users to further design your product.
• Customer demographics: Understanding your customer’s demographics early on will help you determine pricing, availability, and even marketing strategies for your upcoming product.
• Competition: Even the most disruptive ideas will have a little competition, so make sure to research your top competitors and have a plan for how your product and startup will be different—and better.

The research stage is all about determining how viable your idea is. The earlier you can confirm you have a valid, viable idea, the better off the rest of the product development process will be. If you’re just assuming your idea will work without the research to back it, you risk spending more time and money on developing a product that doesn’t launch successfully.

Design and plan

With plenty of research complete, you will be able to determine the unique value proposition (UVP) that your product offers, which can help you in the design and planning stages. At this stage, you’ll start developing what the product looks like—whether it’s a physical product or a digital one—and how it will function. In the designing stage, you’ll need to make sure the fleshed out idea will operate in a way that solves the customers’ needs, as you determined earlier in the research phase.

While planning, you’ll also need to start thinking about how you will source the materials you need to make the product, from fabrics and machinery for physical products to graphic design elements and fonts for a digital product.

Planning will also involve determining where you will sell the product, any partners for selling or manufacturing you’ll need to work with, and how you will get the word out to your target market.

Finally, it’s important to protect your idea from theft during this stage by filing any copyrights, patents, trademarks, trade secrets, or other paperwork to protect your intellectual property. Protecting your IP early on can also help validate your company’s assets, which will be beneficial when determining your startup valuation down the line.

Develop a prototype

Now, it’s time to take your idea from paper to reality with a prototype. This will be the first iteration of the product in physical or digital form, and you can use this prototype to pitch to investors or beta test to the target audience.

Aside from helping you visualize the final product and test the product for feedback before launching the real deal, a prototype can also help you determine how sustainable the idea is. If the prototype is too cumbersome to manufacture or materials are too expensive for this version of the product, it could be a sign that your product won’t be viable long-term.

Test the prototype

Ultimately, any startup is likely to end up developing several iterations of the product prototype. Whether it’s the first early-stage prototype or a late-stage prototype almost identical to what will be your finalized product, each prototype will need to go through testing. 

Both the startup team and the target market can test the product, providing feedback on how it works, what strengths it has, and any weaknesses that need to be improved in the next prototype or final product.

Testing can help you improve the prototype again and again until you’re ready to launch a commercialized product, but how many prototype rounds this will involve depends on the business, the product, the market, and the feedback you receive from the target market. Some companies may only develop a few different prototypes before launching the final product, while other may work on hundreds or thousands.

Build the finalized product

After you develop a prototype, test it, and continue making additional prototypes for testing, you’ll eventually get to a point where you feel the prototype is working well enough that you feel confident in selling it to your target market. When you’re certain the product is viable and there are no additional improvements to be made at this time, you can start building the final product that you will launch to your market.

For physical products, this will mean it’s time to begin manufacturing the product with your business partners, such as a factory or warehouse. For digital products, this process usually involves building out the product or beta product online and scheduling it for launch.

During this stage, you’ll also want to develop any marketing materials that will help get the word out about the launch. This may involve working with a public relations  (PR) team or marketing agency to get placements on media sites as well as developing physical and/or digital advertising. The research you did early on in the project will help guide you on what marketing practices work best for your product, industry, and target market.

Launch

Launch day can be the most exciting and nerve-racking part of the product development process. Even with plenty of research and testing, launching the product is when it officially becomes available for sale to the public.

Even if the product is flying off the physical or virtual store shelves, it’s important to pay attention to customer reviews and feedback. If customers are experiencing similar issues with the product, you should work on improving the product to launch an improved version in the near future.

And if all goes smoothly, you’re still not done with the startup product development process. It will soon be time to start all over again on your next big idea.

Common startup product development strategies

There’s not just one way to approach startup product development, but there are a few common strategies that can offer a framework to follow if you’re uncertain where to start.

Some common product development strategies include:

New Product Development

Also known as the Stage-Gate Process, the New Product Development approach by Robert G. Cooper, co-founder of Stage-Gate International, follows the traditional process we’ve outlined above, from brainstorming a product idea to developing a prototype to finally launching a finalized product to your target market. This process helps establish “gates” between each phase of product development, so the product must meet certain criteria along the way to ensure it is viable and reduce risk.

IDEO Process

The IDEO Process, made popular in 1978 by the design firm IDEO, is a design thinking approach that focuses on the human experience above all else in developing ideas and products. With the IDEO Process framework, startup product development will consider the user’s needs and satisfaction when brainstorming ideas, creating prototypes, and developing and launching the final product.

Lean Startup Process

The Lean Startup Process framework, created by entrepreneur and author Eric Ries, is all about experimentation over planning. Rather than focusing on heavy planning first, then moving down the line to prototype creation, testing, and product launch, the Lean Startup method centers more on creating prototypes and testing again and again until the minimum viable product (MVP) is built. This process follows a “build-measure-learn feedback loop”, which is meant to go from idea to product faster.

Tips for successful startup product development

Not every product by every startup will be a success. Some might fail early on, during the research phase, but others can go through costly prototype development, testing, marketing, and launch and still fail. 

However, for best results, follow these tips to help reduce risk of launching a new product:

Follow a tried-and-true strategy

Some common startup product development processes include the new product development approach, the IDEO process, or the lean startup process. Instead of striking out without a roadmap, follow a well-known product development process to help guide you from start to launch.

Solve a problem

Your idea needs to have product-market fit, meaning it solves a problem for and is in demand by the target market. If you don’t nail down a niche for your product, it’s less likely to succeed. Make sure your idea addresses a need for your potential customers.

Review feedback

Feedback is an invaluable resource for startups. Listen to your team, your business partners, and perhaps most importantly, your customers. Don’t just shrug off bad reviews. Use negative feedback to improve your product’s weaknesses, whether in the testing phase or after the product has launched.

Plus, with 83% of customers saying they feel more loyal to companies that address their complaints over those that don’t, reviewing and acting on feedback can help your business secure repeat customers long-term while also improving your product and business practices: a win-win.

Test and adjust

Use feedback to test and adjust your product, whether it’s an early-stage prototype or a 2.0 version of a product you’ve already launched. Repeat testing and improvements make sure your product continues to work as intended, and it helps the product grow and change to meet shifting consumer needs and demand.

Communicate

Transparency and communication throughout the startup and with customers can establish more trust and loyalty to the brand. Internally, communication can also help avoid costly or time-wasting mistakes during the product development process.

Turn an idea into reality with startup product development

Plenty of people have new ideas every day, but what sets startup leaders apart is the passion to take time to plan, design, build, test, and launch a product from that idea. This process involves a lot of time and due diligence to make sure the idea actually has demand in the market, but by following a startup product development framework and putting in the effort to research and test your product, you can successfully turn your dreams into reality.