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New products enter the market daily, but over 90% are expected to fail in the next five years.
Companies allocate millions of dollars in budgets and invest endless hours to bring new products to the market. But it takes more than that to create a product that provides value to both the creator and the user. Therefore, companies are incorporating product development best practices to get the maximum return on their investment.
The product development process has multiple layers and involves various aspects such as ideation, research, design & development, testing, validation, launch, marketing, and more. And the product development best practices ensure a rewarding experience with a well-executed product development strategy.
This article covers the best practices of product development, benefits, and how you can build an awesome product development team. Let’s dive in.
What is a product development strategy?
Product development strategy refers to a blueprint for creating a new product, improving an existing product, and bringing it to the target market. It covers the entire process from product inception, conceptualizing, designing, developing, and testing to product launch.
A well-defined product development strategy makes a company align its resources, capabilities, and data insights to create customers' desired products.
Companies can employ several effective product development strategies to increase their chances of success. The choice of strategy depends on various factors, including the business goals, market conditions, available resources, and the nature of the product. Let’s explore some commonly used and effective product development strategies.
Three most effective product development strategies
1. Agile product development
Agile product development strategy focuses on flexibility, collaboration, and iterative development. In agile product development, the traditional linear and sequential development process (often called the waterfall model) is replaced by an iterative and incremental approach. It is particularly well-suited for projects with rapidly changing requirements, complex functionality, and the need for frequent iterations and feedback.
Agile product development emphasizes flexibility, collaboration, and iterative development to address rapidly changing requirements and complex functionality.
The key elements of agile product development include iterative development, adaptive planning, delivering working software, cross-functional and self-organized teams, continuous feedback, and improvement. Agile product development leads to products that better meet customer needs with reduced risks of large-scale, upfront planning.
The principles and practices of agile product development are applied across different industries despite originating in the software development domain. Agile approaches are commonly employed in developing digital products and services, such as mobile applications, web applications, software-as-a-service (SaaS) solutions, and digital platforms. Tailoring agile approaches to each product's unique requirements and constraints is essential.
2. Lean startup methodology
A lean startup methodology is an approach to product development that focuses on minimizing waste, validating assumptions, and rapidly iterating to create successful and sustainable products. Eric Ries popularized it in his book "The Lean Startup."
It is particularly relevant for startups and entrepreneurial ventures with high uncertainty and limited resources. However, its principles and practices can also be applied in larger organizations and established companies seeking to innovate and launch new products lean and efficiently.
The lean startup methodology revolves around creating a feedback loop called the Build-Measure-Learn loop. Instead of spending a long time on extensive planning and development, it involves releasing an MVP quickly, measuring user behavior and feedback, and learning from the gained insights. The loop is repeated iteratively to refine and improve the product.
It emphasizes the importance of validating assumptions and hypotheses through real-world experiments. Assumptions are tested with a Minimum Viable Product (MVP). It encourages entrepreneurs and product teams to gather data and feedback from actual users to make informed decisions about the direction of the product. Teams are also open to making significant changes in the product strategy based on validated learning. Lean methodology promotes a culture of continuous innovation and embracing failures as learning opportunities.
3. Design thinking
Design thinking is a human-centered approach to product development that strongly emphasizes understanding user needs and developing solutions that meet their needs. Its core idea is to empathize with users, embrace ambiguity, collaborate, have multidisciplinary perspectives, and iterate through rapid prototyping and testing.
It encourages an iterative and non-linear approach, where the stages are not necessarily followed in a strict sequence. Instead, the process is flexible, and teams may cycle back to earlier stages as new insights emerge.
A design thinking process comprises the following stages:
Empathize: In this stage, an understanding of the user's behavior and needs is developed via research, interviews, and more.
Define: The information obtained in the first stage is synthesized and analyzed to define a user's core problem or challenge.
Ideate: In the ideate stage, ideas and potential solutions are generated.
Prototype: At this stage, selected ideas from the ideation phase are transformed into tangible representations for quick and inexpensive testing.
Test: Prototypes are tested in multiple iterations with users and stakeholders, and the gained insights are used to refine the products.
In addition to product development, design thinking finds application in user experience design, innovation, problem-solving, organizational change and transformation, entrepreneurship, and startups.
Product development best practices
Product development best practices are guidelines and approaches that help companies increase their chances of success in product development. These practices are based on industry knowledge, experience, and proven methodologies. Here are some key product development best practices:
1. Market validation
Before investing significant resources, validate the market demand and viability of the product. Conduct market research, analyze customer needs and pain points, and collect feedback to ensure that a market need for your product exists. It reduces the risk of developing products that have limited market potential.
Read how we went through these steps for Usermaven: 3 weeks of launching our SaaS.
2. Iterative development
Adopt an iterative development approach focusing on frequent iterations, prototyping, and testing. Build minimum viable products (MVPs) to gather feedback from users and stakeholders early in the process. Incorporate the gained insights to make informed decisions and product iteration to create the end product to meet the customer's expectations.
3. Cross-functional collaboration
Encourage collaboration among cross-functional teams for regular communication, knowledge sharing, and joint decision-making. It involves relevant expertise in the development process, such as product managers, designers, engineers, marketers, and other stakeholders.
This way, all aspects of product development, such as technical feasibility, user experience, marketability, and more, are considered. Additionally, a transparent environment with active listening and open dialogue ensures everyone is aligned throughout the process.
4. User-centric design
An essential principle in product development is to prioritize user-centric design. An intuitive, user-friendly, and problem-solving product delivers a superior user experience. Therefore, invest in user research, usability testing, and user feedback to understand user behavior.
5. Project tracking and metrics
Continuously track project progress and measure key performance metrics throughout product development. Use product management tools and metrics such as time-to-market, cost-to-develop, customer satisfaction, and revenue generated to assess project performance and make data-driven decisions.
6. Post-launch evaluation
Product development strategy does not end with development but also informs the product launch phase. You must gather feedback and monitor performance after the product launches. You can track user adoption, customer satisfaction, and business outcomes post-launch. And use this information to identify areas of improvement and product updates.
Read the article on what to do after you have launched your product: Post-launch analysis.
Benefits of having a product development strategy in place
Companies can enjoy the following benefits associated with having a product development strategy.
Clear direction and focus - A product development strategy sets the direction and focus of a company’s product development efforts. It clarifies the goals, priorities, and objectives related to development initiatives. And companies can better align their resources, teams, and activities to achieve a shared vision.
Improved decision-making - Product development strategy sparks effective decision-making. Companies can benefit from the structured approach to making decisions reducing the risk of subjective decision-making.
Resource optimization - By implementing a product development strategy, companies can optimize their resources, such as budget, personnel, and time, based on strategic priorities.
Risk Management - With a dedicated product development strategy, you can assess and mitigate risks better. You can identify and proactively address potential risks and challenges associated with product development.
Customer-centric approach - A product strategy emphasizes customer needs, preferences, and pain points throughout development. This customer-centric approach blends customer insights into product design and development. As a result, companies make products that resonate with their target audience, generating high market acceptance and customer satisfaction.
Faster time to market - A product development strategy reduces the development cycle and minimizes delays with a quicker time to market. You can seize market opportunities, stay ahead of the competition, and capture early adopters.
Competitive advantage - A product strategy promotes a culture of innovation within the company. You can experiment with new ideas, have dedicated R&D, internal and external collaboration, or co-create with customers to generate breakthrough products. A strong product portfolio and a reputation for delivering successful products can give you a unique selling proposition and contribute to your long-term success.
Continuous improvement - A product development strategy includes mechanisms for constant improvement. It encourages companies to learn from each product development project, gather feedback, and incorporate lessons learned into future initiatives. This iterative approach helps companies refine their processes, enhance their capabilities, and drive ongoing innovation and improvement.
How to build and manage a product development team?
A product development team is responsible for the end-to-end process of creating and bringing new products to the market. It is a blend of diverse professional expertise, such as product managers, project managers, designers, engineers, developers, and testers.
They are of primary importance for developing and executing product development strategies. Hence, building and managing a strong product development team is essential to successful product development. Below are some of the high-impact tips for building and managing a product development team:
Identify the key positions required for the team and clearly define the roles and responsibilities of team members based on their expertise, skills, and experience. Moreover, establish clear goals, objectives, and expectations for the team. Communicate project milestones, deadlines, and performance metrics and regularly revisit and assess progress towards these goals. Share feedback and recognition to motivate the team.
Encourage a collaborative and open work environment where team members can freely exchange ideas, share knowledge, and communicate effectively. Implement regular team meetings, and brainstorming sessions, utilize collaboration tools and project management software and project updates to facilitate communication and keep everyone aligned and informed.
Foster a growth-oriented environment by providing opportunities for training, learning, and career advancement. A learning culture encourages team members to explore new ideas and level up their skills from which your company can benefit.
Ensure the team has all the necessary resources and technology to perform their work efficiently. It’ll remove the team's organizational barriers and advocate for their support.
Leadership and support of the product development team will provide guidance, direction, and mentorship to actualize their potential.
Continuously evaluate and assess the team's performance, processes, and outcomes. Adapt and refine team structures, processes, and workflows to optimize efficiency, collaboration, and performance.
How Usermaven can help you with your product development strategy
Data analytics is crucial to product development strategies, providing insights into user behavior and trends. Here’s how they complement the entire product development process.
Data analytics tools like Usermaven track and analyze user behavior on digital platforms like websites and apps. They can help you understand how users interact with your product. Which features do they use most, and what difficulties do they face?
They can process and analyze user feedback from various sources and apply sentiment analysis techniques to extract meaningful insights from user interaction.
You can perform A/B testing and experimentation with data analytics tools.
Data analytics tools can gather and analyze market and competitor data,
Predictive analytics is another well-known technique used by data analytics tools to forecast user behavior, identify patterns, and anticipate future trends.
FAQs
Why implement best practices for product development?
Implementing best practices for successful product development can benefit companies in the following ways:
Best product development practices can streamline processes, optimize resource allocation, and saves time and costs.
Best practices ensure consistent and high-quality outcomes, reducing errors, rework, and product failures with guidelines, frameworks, and processes.
Best practices promote effective collaboration and communication among cross-functional teams with clear roles, responsibilities, workflows, and improved decision-making.
Best practices accelerate the product development lifecycle with faster time to market.
Best practices encourage customer-centric approaches to delivering products that meet customer pain points and enhance satisfaction.
Why is product development vital to companies?
Product development is vital to companies for the following reasons:
Developing and improving new products allows companies to meet evolving market trends and customer needs.
Companies can differentiate themselves from competitors by establishing a solid market presence with innovative and unique products.
Developing new products creates growth opportunities by penetrating new markets, expanding customer reach, and increasing market share.
A company offering high-quality, reliable, and innovative products builds a positive reputation, enhancing a company's credibility and customer trust, leading to brand loyalty.
Product development leads to long-term sustainability. Companies can stay relevant, resilient, and adaptable to changing market dynamics.
