- Jan 25, 2024
- 14 min read
From Idea to Launch: Mastering the New Product Development Journey
Each year over 30 thousand new products are introduced to the market. 95% of them fail. So, how do the rest 5% succeed? Developing products from scratch is not easy. In this article, we will guide you through every stage of the new product development process.
You will learn about the following:
– the new product development process,
– evaluation of new product dev ideas,
– important aspects of a product design,
– new product introduction procedure and more.
What is New Product Development (NPD)?
NPD stands for New Product Development. It describes the product journey from idea to launch. Many experts participate in the NPD process. If you have a product manager on your team, they will oversee the new development process. In smaller companies, a CEO can personally handle the development of new products. Other key specialists are:
- tech leads, and
- sales and marketing people.
📋 7 Stages of New Product Development
Often companies have vastly different approaches to new product development. For example, large corporations have more resources than startups. But they also have more bureaucracy. Goals and priorities are also important to consider. Usually, a new product development life cycle has 7 stages:
💡 Stage 1: Idea generation
The first stage of new product development is idea generation. At this stage, you know that you want to create a new product. But you are not certain what the product will be. So, your goal is to generate as many product ideas as possible. This stage can include the following:
– Reviewing your goals
Start by reviewing your goals. Why is new product development necessary? Do you want to increase the company's revenue? Or, perhaps, solve a problem? What opportunities do you pursue?
– Researching the market
Observe the market. How do your competitors achieve similar goals? Do they have successful products that you can replicate?
– Interviewing stakeholders
Ask your customers what they want. Talk to your colleagues and discuss their ideas.
Instead of interviewing colleagues one by one, you can organize a brainstorming session. Gather a diverse group of people. They should have different areas of expertise and background. Remember, at this stage, no idea is good or bad. It's just an idea.
– Listing ideas
Create a backlog of ideas. There might be ideas that do not support your current goal. So, you will not move forward with them. But they might be useful in the future when you need more products.
📊 Stage 2: Business analysis and research
Out of all the new product stages, this one is the most important. Your goal is to shorten the idea list. And you must thoroughly analyze each remaining idea from the business perspective. This stage can include the following:
Primary research can help you shorten the list of ideas. You can create a focus group with your colleagues. For a balanced perspective, include an engineer or a tech lead, a salesperson and a business person. Talk to colleagues and collect raw feedback about the ideas. You can also talk to customers. Ask if this is something that they would be willing to pay for. Then, select several top ideas.
Detailed business analysis
Now, it is time to analyze each remaining idea in detail. Here are several useful tools that can help you at this stage of new product development:
1. Market research
Market research can include different techniques:
Conduct surveys. Likely, your target audience has different groups. Let us imagine that you want to create a vegan food delivery app. You can attract health-conscious people, animal lovers and climate activists. Owners of vegan restaurants and shops are also your target audience. They can provide services through your app. Each group will have different interests and valuable insights. You should include all of them in the survey. Remember, new product development should attract enough people to be profitable.
Here is another tip. Don’t ask if your idea is good. Instead, ask whether people are willing to pay for the product. Figure out the details. For example, how much would they pay? How would they use the product? What features are important for them? Try to understand what underlying problems your product can solve.
– Market analysis
Market analysis is not the same as market research. Here, you focus on the characteristics of a certain niche or segment. Learn the size of the market and its value. Figure out where and how you can potentially expand. Discover market opportunities. For example, a vegan food delivery app can be introduced in the UK. But later you can expand it to Australia, Israel, Austria and so on. These countries have the highest concentration of vegans in the world.
You should also research market trends. Successfully using a trend can help a product gain traction.
Some organizations do useful market and industry reports. Check out BCG, Deloitte and Gartner.
– Competition analysis
Analyzing the competition is important for a new development product. Research how much market share belongs to each competitor. Try to figure out why their customers like them. What works for them and what doesn’t?
2. Feasibility study
The next step in product research is the feasibility study. The goal is to figure out how likely the product is to succeed. It will also help you discover potential risks and pitfalls. There are 3 main aspects to consider:
Are there any legal obstacles to your project? What are the risks? If you plan to expand your product to other countries, you should learn about their laws too.
For example, the delivery industry in the EU is facing labor law difficulties. European courts have fined Glovo, Uber and Amazon for millions of euros. Just in January 2023, Glovo was fined 62 million EUR. Half a year ago they had to pay 79 million. The reason – labor law violations. Apparently, delivery people working for these companies were registered as self-employed. But the courts analyzed their working conditions and decided that they were employees. This means that companies had to pay social security and other taxes. You can read how to avoid similar issues in our previous article.
If you are not a lawyer, you should consult one. Doing such research yourself can take lots of time. And you can miss something.
Do you want to create something innovative? Then, this part is crucial for your new product process. Consult engineers and technical experts. Ask them whether it is possible to build your product.
Your goal is to compare the cost of the project to potential earnings. First, estimate how much the product development procedure will cost. Then, figure out your future operating costs. When you have this information, it's time to estimate potential earnings. During the survey, you asked how much people are willing to pay for such a product. Combine this with information about the market. Be realistic, gaining market share will take time.
Now that you have all the information, you can make a conclusion. Is the development of a new product worth the cost? Which idea will bring the best return on investment? You can consult a financial expert, at this stage of new product development.
Of all product development processes, research is the most important. Good research allows you to filter solid ideas. And it shows you potential risks. So, it is key for product success.
3. Research summary
The next step is to summarize all your findings. You can create a short presentation or a document. It should outline all the main points. The key stakeholders can use this document to decide which idea or approach to use.
If you need advice on how to get funding for your project, check out our previous article.
📅 Stage 3: Planning
Now, you know exactly what to build. So, you can start planning the next stages in the new product development process. During the planning phase, you should determine the following:
Determining product scope is key for your new product development plan. Figure out what features you need. To make this easier, try writing use cases.
Use cases are descriptions of how customers can use your product.
Here is a popular template:
“As a ___ (user type), I want to ___ (do something) so that ___ (reason).” Example: “As a writer, I want to check my articles for typos so that they are easy to read.”
You should also research similar products. And talk to tech experts. Some software features might be standard. They are not obvious but important. Examples are registration pages and security measures.
Now, it’s time to prioritize. Consider what product features are necessary for the software to function. You should create these features first. They will be a part of your MVP.
What is an MVP?
MVP stands for Minimum Viable Product. It is an important part of a new development product process. This is a product version that has just the basic features.
Create a release plan. This means breaking down features into MVP, release 1, release 2, etc.
You should define specific requirements for each feature. Consider how and why each feature should work. This will help you to communicate clearly with designers and engineers.
Creating a Product Requirements Document
PRD is the main deliverable at this stage of new product development. PRD stands for Product Requirements Document.
PRD is a living document. This means that you can revise and edit it later. When you have the first draft, ask colleagues for feedback. Business stakeholders and engineers can provide valuable advice.
Another important aspect of a new product development lifecycle is metrics. How will you measure success? What KPIs are important for your product and business model?
Let’s discuss metrics for a tech product development process. You can divide them into several types. First, there are technical characteristics:
– response time,
– error rate,
– availability, etc.
There are also business and marketing metrics. Examples are:
– user engagement,
– customer satisfaction,
– conversion rate,
– churn rate,
– customer lifetime value, etc.
Choose those characteristics that are important for your business. Also, consider which experts in your organization will be responsible for tracking product success.
5. The timeline
It is important to create a timeline for your production development process. Determine how much time each next step in product creation should take. Be realistic. The timeline depends on many factors. Examples are your industry, the nature of the product and your company structure.
6. Other useful artifacts
During this stage, you can also create:
– a Product Roadmap,
– a Customer Journey Map,
– Product Vision and
– Product Strategy.
These are useful documents that will help you to better understand your goals.
📐 Stage 4: Developing a solution design
This is an important stage in new product development. Here, experts must develop a Solution Design Document (SDD). This is typically a detailed document. In the case of an IT project, it describes different aspects of future software, such as:
Your tech leads will describe their approach to software architecture. For example, it can be monolithic or microservice-based. They can also create an architecture diagram.
Experts decide what infrastructure to use. Many choose cloud infrastructure. Popular providers are AWS, Google Cloud and Microsoft Azure.
– Databases and data management
Databases can be relational and NoSQL. Developers choose what databases to use and how to organize data there. They describe data flows – how data moves through different software components. It includes data processing and storage details. Efficient data management is key to software success.
Tech leads consider automation, integration and deployment strategies. This will make further product development easier.
– Security and compliance
Security measures are crucial to keep software and customer data safe. These include authentication, authorization, encryption and other protocols. Experts also consider how to make sure that the software follows all government rules.
– Tech stack in general
Developers should discuss what technologies they will use. This will save your team time and effort later. For example, our team often uses Terraform to simplify infrastructure management.
Designers, developers and marketing experts collaborate to create the UX/UI design. Good designs are simple, yet memorable. They become a part of your brand image.
Product solution design should take into account non-functional software requirements. Examples are scalability and ease of maintenance.
👩💻 Stage 5: Creating an MVP
The tech product development process continues with an MVP. At this stage, you get to develop the first version of your product. As mentioned, MVP stands for a Minimum Viable Product. This is the basic product version. It only has the core features.
At this stage, you must bring the solution design to life. Make changes if necessary. And make sure that the product follows all set requirements.
🔎 Stage 6: Testing
Testing is important for the process of new product development. It goes hand in hand with MVP creation. In fact, software engineers do many tests during development. Other tests are relevant when all product features are ready. Here are several types of tests to consider:
– Unit, integration and regression testing
These tests are the backbone of software development. Unit testing means testing individual software components. It shows whether a certain element works as it should. Integration testing analyzes how different app components work together. Regression testing makes sure that new software elements do not disturb existing features.
– Stress testing
Stress testing checks whether the software works correctly under high-demand conditions. It measures system performance and reliability.
– Acceptance testing
Acceptance testing verifies that the software meets all the requirements. Business stakeholders, product managers and end users can participate in acceptance testing.
– Beta testing
During beta testing, you give certain users early access to the software. They will use it and give you their feedback. Make sure that your beta testers represent your target audience.
🚀 Stage 7: Launching the product
New product development processes culminate with product launch. This is the step when you introduce the product to the market. There are two aspects to handle before the launch:
1. Product support
Set up product support. This is an important part of the new product introduction procedure. When users start getting to know your software, they will have questions. Some of them will have issues. Good product support is a great way to build a loyal customer base.
Make sure that people responsible for product support are ready to answer customer questions. Set a policy on how to handle complaints. And users should know how to reach out. So, include contact information along with the product.
2. Marketing campaign
Marketing is the second key part of the new product introduction process. It will depend on your product and budget. But here are some general pointers:
– Start in advance
It is best to start a campaign as soon as you know all the product details. For example, when your solution design is ready. This will help you hype up the product and get traction.
– Use ads, social media posts and influencers
These are standard but powerful tactics for a new product in marketing. Focus on telling potential users how the new product can improve their lives.
When your MVP is ready, you can give influencers early access. This way their reviews will be ready for the launch day.
– Make the product launch an event
Organize a party. For a B2B product, invite people from companies that can become your clients. You can also invite influencers and the press.
Make the event exciting. First, this will help to attract guests. Second, if your guests have a good time, they will be more likely to try your product.
– Offer discounts and promo codes
Promotional offers are important for new product development marketing. It helps to attract the first users and spread the word around.
🎯 3 Expert Tips for Creating Successful NPD Processes
Managing an NPD process is not easy. So, we analyzed 3 tech companies to give you success tips for new product development processes:
Tip #1. Apple: Putting design first
Apple’s approach to the new product process is very design-driven. Apparently, they give full freedom to the design department. A former Chief Design Officer of Apple said that their team did not need to inform the finance and manufacturing departments about the progress. When they were working on a new concept, they were cut off from everyday business routine. This way they could focus on making innovative designs.
This strategy worked well for the company. iMac G3 had a memorable drop-shaped design. At that time, this was unheard of. Previously, computers were clunky and ugly. Another example of an iconic Apple design is the iPod. It allowed people to find a desirable song very fast.
Tip #2 Google: Welcoming user ideas
Google seems to follow 9 principles of innovation for their new product development procedure. A former Google executive composed these.
A principle that drew our attention is called Default to Open. This means that the company actively encourages users to contribute to its products. Thus, people can suggest ideas or point out bugs. Google rewards users for input. Another example of this principle is how Google encourages Google Maps users to make updates.
Tip #3 Amazon: Starting with the customer
Amazon’s new product development process is very user-centric. When developing new products, they start with user needs. Then, they work backward.
To stay focused on customer needs, Amazon uses the press release method. This means that they write a press release for a product that does not exist yet. Then, they design and build the product as it was described in the press release.
There are 7 stages in the new product development. These are:
– idea generation,
– business analysis and research,
– planning further new product development steps,
– creating a solution design,
– developing an MVP,
– testing and
– launching the product.
The process of product development has certain challenges. First of all, you need to find the right product idea for your goals. Then, you need to research this idea. This way you can learn whether your product will do well. For this, you should study the market. Figure out how many people want to buy your product and what they are willing to pay. Then, research the feasibility of the new product and development in general. Calculate whether the product will be profitable. Also, research the legal side to make sure that you know all the risks.
Next, comes new product development planning. Here you should figure out the scope of your project. Then, set priorities. This means determining which features will be in the MVP. Other features you can add later, to other product versions.
These preparational new product development stages are very important. Sometimes, entrepreneurs skip them. So, they spend lots of money on development only to learn that no one wants the product. What’s worse, if they skip legal research, they can be slapped with a lawsuit.
The next step for new product development is solution design. Here, you create a detailed scheme of how the product will work. Let’s imagine that we have a tech product development process. Then, your tech leads will figure out what infrastructure and tech stack to use. Your experts should create an architecture diagram and UX/UI design. When everything is ready, your team can develop the MVP.
The last step in new product development is product launch. To prepare, set up customer support and do a marketing campaign. New product development marketing can be tricky. You should make the target audience aware of the upcoming product launch. This should be a memorable event. You can throw a party. Invite people from your target audience, especially if you are in the B2B sector. Also, invite the press and influencers. Offer discounts for everyone who comes. This way you can spread the word around.
1. What is the NPD process?
NPD stands for new product development. The process of developing a new product has certain challenges. You can find the guidelines and valuable tips in our article.
2. What is the first step in the new product development process?
The first step of the process for new product development is idea generation. Overall, there are 7 steps to developing a new product.
3. What are the stages of developing a new product?
There are 7 new product development stages. They are:
- idea generation,
– solution design development,
– MVP creation,
– testing and
– product launch.
4. What new product development phases are the most important?
All steps in new product development are important for project success. But make sure not to skip research and business analysis. Otherwise, you can spend lots of money to create something that no one wants to buy.
5. What are the challenges of new product process development?
The main challenges of the new product development processes are:
– finding the right idea,
– doing market research,
– doing legal and financial project analysis,
– creating a good product design,
– marketing your new product and attracting users.
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