What is a Product Development Process?

A product development process is a multi-stage plan to get a product from concept to launch. It's the first stage of the product life cycle where teams must complete research, prototyping, testing, and development to get the product to market.

Who is Involved in the Product Development Process?

Product development includes multiple teams and departments, most notably:

• Various product teams
• Business development
• Sales
• Marketing
• Finance
• UX/UI design
• Engineering

Product Management vs. Product Development

Product development is the process of conceptualizing, designing, and developing a new product. Product management is the process of managing, evolving, and scaling a product after launch.

The Stages of Product Development

While there are several methodologies for developing a product, most companies use design thinking as the foundation. Design thinking puts the customer at the center of all decision-making so that teams create a product that solves a human problem.

Desirability, Feasibility, Viability

The goal of design thinking is to develop a product that meets three criteria:

• Desirability: Is this a product people want or need?
• Feasibility: Do we have the resources to build and support this product?
• Viability: Does this product make business sense?

The idea is that where desirability, feasibility, and viability intersect, you have an innovative product that people want and will generate a good return on investment.

With this in mind, let's explore the six stages of the product development process. We'll explore the steps in a typical digital product development process but include examples of physical product development where they deviate.

Step 1 - Ideation

The first step of product development is ideation. The idea phase is a collaborative effort often involving cross-functional teams to generate lots of ideas from different perspectives.

During the ideation phase, there are no bad ideas. The goal is quantity, not quality. Teams members are encouraged to think out of the box, consider "the impossible" to get the juices flowing, and uncover innovative product ideas.

By the end of the ideation phase, teams have a product idea and usually a minimum viable product (basic prototype).

Step 2 - Research

Next, a product manager will lead a team of researchers to conduct research in three primary categories:

• Consumer research
• Competitor research
• Market research

By combining research from these three categories, product teams can identify a desirable product in an innovative niche and gain a competitive edge. By the end of the research phase, the team has a product they're ready to begin developing.

Step 3 - Plan

During the planning phase, teams gather resources and outline a timeline for design and development, including:

• Developing a business plan
• Create the initial product roadmap
• Define success metrics
• Budget allocations
• Assigning roles and responsibilities
• Outline product specifications
• Technical/engineering plans
• Select tools

This list is by no means exhaustive, but it gives you an idea of how much work goes into planning a product's design and development before launch.

Step 4 - Design, Prototyping & Testing

The design phase includes the UX design thinking process. In this five-step iterative process, designers develop a product that meets users' needs while aligning with business goals. The design thinking process requires designers to:

• Empathize: What do users need?
• Define: What is the problem you're trying to solve?
• Ideate: Come up with ideas and solutions.
• Prototype: Create prototypes to test and validate ideas.
• Test: Test prototypes with end-users to refine ideas and design a desirable product experience.

Designers will meet with stakeholders to present mockups and prototypes for feedback during the design process.

Step 5 - Sourcing & Development

With a working prototype, the product manager can start sourcing the tools and resources to develop the final product. This process will look different for a physical product vs. a digital product: Physical product: Sourcing materials, finding suppliers, tooling, manufacturing, warehousing, etc. Digital product: Identify a programming language and framework, hosting, tools, engineers, and other technical resources.

Step 6 - Commercialization (Product Launch)

The sales and marketing team will work with the product team throughout the development process to take the product to market as soon as development is complete.

Product Development Best Practices

Here are some best practices for product development:

• Choose a framework and methodology that suits your product and business needs. Some product development frameworks include IDEO's Design Thinking, New Product Development Process (NDP), and The Booz, Allen, and Hamilton (BAH) model.
• Adopt a human-centered approach throughout the product development process. The goal is to design a product people cannot live without. You can only achieve this if your product is desirable.
• Test early; test often. This design principle encourages teams to test ideas, assumptions, and hypotheses at every stage of the product development process to eliminate bias and poor decision-making.
• Create an environment for teams to collaborate and share information. During ideation and feedback sessions, always use cross-functional teams to get diverse perspectives and ideas.
• Set realistic timelines and budget constraints. While it's essential to get a product to market as quickly and cost-effectively as possible, cutting corners or rushing processes could lead to poor quality and adoption.

Examples of Product Development

Here are two product development examples from modern success stories.

Netflix

Netflix started as a DVD rental service but pivoted to digital and streaming in the early 2000s as demand grew for internet-based content. Netflix has used design thinking and human-centered product development for its services and content—resulting in a global product offering and binge-worthy shows like Stranger Things, Black Mirror, and Orange is the New Black.

Tesla

Telsa was founded in 2003 by Martin Eberhard and Marc Tarpenning, who then sold a majority share to Elon Musk less than a year later. Tesla's first car was the Roadster in 2009, which received a cold reception and mockery from car enthusiasts and competitors.

A little over ten years later, Tesla had developed and launched the Model S, Model X SUV, Model 3, and Model Y, and is the world's most valuable car manufacturer with a market cap of over $1 Trillion.

Tesla and Netflix demonstrate that to achieve success and a high return on investment, you must identify a gap that competitors aren't paying attention to and then develop a product of such exceptional quality that they can't catch up.