What did it take for the early senior Apple team to bring us the first iPhone? Or the Wright brothers' first piloted flight? Or any other product idea that has changed the world? It took a process. More specifically, a new product development (NPD) process.
New products don’t just enter the general consumer market from the ether. Especially in a world that goes through a lot of changes, fast. As Jim Euchner comments in his issue introduction, ‘The Speed of New Product Development,’ in the Journal of Research-Technology Management:
“... the pace of change is accelerating, and the tools that have served NPD well for decades are beginning to fail. Why is this? Simply put, the tools were designed for a more stable world. New digital technologies are changing the speed of innovation, the design space for physical products, and the business models for delivering them, often all at once.”
In this guide, we’ll cover the basics of new product development and then dive into the development process, followed by tips and best practices. We’ll also keep in mind the issue brought up by Euchner of old, failing practices, and focus on bringing innovation to the table.
What is new product development?
The most basic definition of new product development is that it’s the process businesses use to bring a new product to market, bring an existing product to a new market, or undertake a heavy redesign of an existing product to make it better.
But it gets a little more complicated than that. There are seven stages to new product development, though some businesses might merge or expand some steps depending on their needs. Each of these stages involves a lot of work to make the overall project successful, and we’ll go over these steps in more detail below.
Why should companies develop and introduce new products?
Simply put, people, markets, economies – heck, even the world – changes. Nothing stays exactly the same forever. Therefore, companies need to be agile in changing environments – developing and releasing new products helps to do just that.
For example, the shaving company Harry’s started out as a direct to consumer razor brand. In 2013, the idea of having mail-in razors on subscription was relatively innovative, which reflected its $1.7 billion valuation in just five years. But when competition emerged on the scene, Harry’s needed to adjust its offering.
Today, Harry’s has a full line of on-brand personal hygiene products (as well as a subsidiary female-equivalent company Flamingo). With a new funding round last year, investors valued the company at $2 billion.
Other than potentially boosting annual revenue or company value with new offerings, there’s another reason companies should continue to develop new products: to drive industry innovation.
Companies rarely operate in a siloed market or can monopolize one (if they do, it’s not usually long before a competitor comes along). By adding new, innovative products to the market, your business puts out the challenge for others to do the same, or risk falling behind. Thus, the cycle continues.
The smartphone industry is a common example of product innovation improving the industry. Another example is how generative AI technology is helping to drive innovation in lots of industries, beyond AI tech itself.
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New product development process stages
So, are you feeling inspired to bring a new product to market? In this section, we’ll cover the details of what it takes, from pre- to post-launch. We’ll also have experts who have gone through the process themselves (in various industries) weigh in with their experiences.
Every new product development process starts the same – with ideas. Here, the goal is to generate ideas for a new product. While it might seem simple, you’ll need to have criteria in place for assessing the ideas. For example, Diana Stepanova, Operations Director for Monitask, suggests the following:
“Encourage open communication and collaboration within your team and establish a clear process for submitting and vetting new ideas. This process should include prioritization based on the value proposition, feasibility, and alignment with company goals.”
When you feel you’ve come across a few good ideas based on your criteria, you can move forward into the next stage.
Some businesses will merge idea generation and business analysis into one stage by making the idea criteria more strict and detailed. Nonetheless, you’ll need to analyze the business merits and the financial details of each idea that made it through the first round.
At this stage, Matthew Ramirez – who grew and sold his first company WriteLab to Chegg, where he worked as a Director of Product Management, and is now building Paraphrase Tool – suggests:
“To start, you must scrutinize your rivals and learn from their strengths. Then identify the product that poses a challenge, conduct a SWOT analysis, and chart a course of action. Afterwards, you must examine your desired customers in depth.”
You should also use the business analysis stage to develop a rough concept or blueprint of the idea, which you can use for formative testing, or for conducting user research interviews, for example. Cynthia Davies, Founder and CEO of Cindy’s New Mexico LLC, suggests conducting this preliminary research:
“When running a business analysis, you need to consider customer demand equally with profitability predictions, because if not enough of your customers want it, you simply won’t be able to generate revenue and will end up losing money in the long run. Research your target audience via data and interviews.
Conducting interviews with potential users will provide you with direct feedback and can help you tailor your product to best suit their needs and increase its chance of success when you bring it to market.”
This third stage is when it all feels more real. You’ve come up with an idea, assessed its business viability, and conducted some preliminary research with potential customers. This is the time to start formally designing your idea and building a functional concept using prototyping tools.
“You must work with a team of designers to create a prototype of the product. Test the prototype with customers to get feedback and make changes accordingly.”
Note that design testing and product testing are different, and you’ll see why in the next stage.
Once you’ve built a functional prototype, as well as some static concept designs (for more ambitious or time-consuming features), you can take it to the next level of testing – and this is where tests from the design stage, such as prototype testing and design surveys differ from product testing.
At this stage, you develop the prototype into a finished, fully functional, marketable product built on any feedback you received from testing and research conducted in previous stages. With a ‘final draft’ of the product, you can take it back to your customers and test it again.
At this stage, Diana Stepanova suggests the following practices:
“Set up proper test environments and utilize usability testing tools and techniques to ensure the product is stable, secure, and scalable. Collect feedback through multiple channels, such as customer interviews, usability tests, alpha testing, and beta testing, to drive continuous improvements.”
So you’ve completed testing, made tweaks based on feedback, and you’re happy with the product. Congrats! You’re almost ready for launch.
Now it’s time to consider your go-to-market strategy, which includes setting up marketing, sales, and customer support teams. At this stage, Diana also echoes these needs:
“Develop a go-to-market strategy that clearly communicates your product's value proposition and differentiators. This can include marketing campaigns, product demonstrations, and sales funnel optimization. Continuously gather feedback to adjust your product roadmap and fine-tune your marketing efforts.”
Once you’ve developed and documented your go-to-market strategy, you can put it into practice and launch your product!
You might have thought that launching your product would be the end of the NPD process, but it’s not. The post-commercialization stage integrates post-launch monitoring and feedback. Alok Agarwal uses this stage to collect all-important data:
“Monitor the product's performance after it is launched. Collect data on sales and customer satisfaction, then use this data to make changes to the product or marketing strategy.”
At this stage, it’s also critical to keep an open channel of communication with your customers. With the product in more hands than ever before, it’s likely some of them will identify bugs or issues that didn’t come up during testing. Use this information wisely.
This final stage of the new product development process focuses on building efficient workflows, reviewing processes, and further developing customer support and experience for the product. Given her role as an operations director, Diana has some practical tips to share about the operations management stage:
“Streamline processes and workflows to ensure efficient product delivery, from development to customer support. Utilize project management tools, maintaining a balance between innovation and operational efficiency. Regularly review your product and project management strategies to ensure they properly support your overall business goals.”
Technically, this NPD is always ongoing and helps to entrench your new product as one of your business’s core (or supplemental) offerings.
New product development best practices
Do you have an idea ready for development and are willing to put in the hard work to get it to market? Before you run off into the sunset, bear in mind these tips and best practices to help you stay on track for a successful launch.
Embrace an iterative approach
It should be a no-brainer to say that whenever you test your product, you should make improvements based on the results. This is similar to the continuous product discovery process.
“Embrace an iterative approach, incorporating user feedback and continuous improvement throughout the development process.”
—Akash-Roy, Product Manager at Napta
Test your prototypes in multiple environments and situations
Just because your prototype works for someone in one type of environment or situation doesn’t mean it works for everyone else. When product testing, vary your test situations or make sure your participants are diverse.
“Make sure the product is reliable and meets all of the requirements [from your business analysis]. Test it in a variety of environments.”
—Alok Agarwal, VP of Products at Mailmodo
Don’t be afraid to experiment
I recently came across an inspiring product story on Twitter shared by @tibo_maker, the Co-founder of Tweet Hunter. When he set out to develop a new product, he embraced experimentation to validate ideas before making significant commitments. In just four months he created 11 different products, and eventually found success with Tweet Hunter.
Share your new product with the world
No doubt by now you want to scratch that creative itch and get started with your new product idea, but remember not to rush through the process. If you want to launch a successful product, you’ll need to test your ideas, concepts, and prototypes first.
To do that, you can sign up for a free Lyssna account and get access to unlimited active user tests. Lyssna has tests that can help you at each major stage of the new product development process, which means you can keep your research under one roof.
We’re rooting for you!
Alexander Boswell is the Founder/Director of SaaSOCIATE, a B2B SaaS, MarTech and eCommerce Content Marketing Service and a Business PhD candidate. When he’s not writing, he’s playing baseball and D&D.
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