Over the past 14 years, I’ve helped build and launch over 30 B2B and B2C products, which have generated billions of dollars across half a dozen industries. Throughout my career, I’ve nearly always been involved in the product development process. First, starting out as a developer, and eventually wearing the product development / management hat while serving as a director and then as a CTO at various companies.
Through the years, I’ve come across a number of organizations that have tried to bring new products to market without following any standard product development practices & processes. Unsurprisingly, more than 65% of all new products are commercial failures.
For example, some organizations are often driven by a belief that if a handful of customers are asking for a new product or if a competitor has a new product that’s well received by their customers then, the new comparable product/service/ feature should just be built after doing some minimal due diligence & internal checks. This often leads to products that could be well received by the clients but have unsustainable margins, may result in cannibalization of existing services & offerings, and poor overall ROI.
Another example might be organizations that get carried away with the “big idea”, where one or more senior executives have a grand product vision and do not follow any standard product development processes. For example, an organization may fail to solicit customer feedback during the concept development and testing phase based on a very strong belief in their big idea and some positive internal feedback. This often results in customers finding severe issues with the product at launch and may cause irreparable damage to the company and/or product’s reputation.
The following is an 8-step New Product Development Process Guideline that has worked well for me in the past and has been used by numerous organizations to successfully launch new products.
New Product Development Process
Idea screening to eliminate unsound concepts.
- Concept Development & Testing
Develop marketing & engineering details, collect customer feedback.
- Business Analysis
Customer feedback on pricing, sales & profitability estimation.
- Market & Beta Testing
Prototype, beta & customer acceptance testing.
- Technical Implementation
Plan & build.
Launch & market.
- Product Pricing
Assess portfolio impact, internal/external value & cost analysis, financial forecasting.
The above steps are a guideline. Each step should be expanded to encompass sub-steps as required for specific products by your product organization.
Product Development / Management @ Google
See Google Product Development / Management Process presentation by Marissa Mayer. Though this presentation was given in 2003, it is still relevant today and has a number of good ideas for any product organization. Quote: “Formula: Smart people + creative environment + outlet for ideas = innovation”.
For more information on the subject, I highly recommend a great book by Karl Ulrich titled Product Design and Development.