7 Tips for New product development

I get this distinct feeling that the general public has a very big soft corner for startups, especially the ones that are modeled on e-commerce. Would you agree with me on that? When I say soft corner, what I mean is, on what basis did people use the services of Snapdeal or Quikr or Myntra when they were first launched? No one had heard of them before or knew about the credibility of the founders. Yet, there was tremendous positive response at their initial launch.

What I am trying to draw attention to is that with the amount of public support that they receive, would you have thought that failure can be a reality for startups? Surprisingly, yes and you may find more startup failures than successes. Most startups fail due to lack of customers than for a failure of product development. This is highly logical, as most of the researches, prototypes and processes in any organisation are focused on the product and its development. Very rarely will you find any research or processes to manage customers, their expectations and their recommendations. This sentiment has been superbly described by Dr. Nirmalya Kumar, visiting Professor of Marketing at London Business School:

Branding is not merely about differentiating products; it is about striking emotional chords with consumers. It is about cultivating identity, attachment, and trust to inspire customer loyalty. Chinese brands score low on attributes such as “sophisticated”,”desirable”, “innovative”, “friendly”, and “trustworthy”.

Mark Zuckerberg also gives all credit to customers for the success of Facebook:
I mean, we’ve built a lot of products that we think are good, and will help people share photos and share videos and write messages to each other. But it’s really all about how people are spreading Facebook around the world in all these different countries. And that’s what’s so amazing about the scale that it’s at today.

Nonetheless, the importance of product development cannot be disregarded. Processes are key and you should not be afraid of them as they do not necessarily need to be complicated. They are normally quite simple indicating a set of steps that will simplify your work by bringing in clarity in the chaotic environment, of a startup running at a fast and furious pace. Aaron Schildkrout has a very informative seven-part series where he extols on the merits of processes. (The link to the article is mentioned in the references.)

New product development involves a process consisting of several steps that will be determined by the nature of your business. Following a proven process will help make the product development cycle simpler and will go a long way in ensuring success for your endeavour. Some of the generic steps that most businesses follow are:
1. Product concept: Generate product ideas. Involve employees, prospective customers, social networks etc. to get more ideas. Analyze the industry and get feedback from the market on existing products. Create a final list of new products.
2. Concept evaluation: All ideas will go through an evaluation process by decision-makers. You will have to create the criteria for selection based on your business. This step is vital to avoid rejection at a later stage. Short-list a set of ideas that will work and you would like to go ahead with.
3. Customer assessment: The market will give you more meaningful feedback on your ideas. They will tell you which idea appears to be most attractive to them and if they want or need it. E-mail would be a good communication medium at this stage. From the responses, you should be able to zero-in on one or two ideas to work on.
4. Analysis: You will need to look at the selected idea(s) from a business perspective and work out the viability. This involves identifying competitors and the market demand as well as doing complete cost estimation and determining the profit margins.
5. Prototype development: Sample products are developed and shared with a core set of customers to get their reactions on features like design, specifications, look, feel and packaging etc. This will provide the development team with improvement ideas. It will also provide inputs to the marketing team for their marketing strategy.
6. Market test: After all improvements have been incorporated based on the feedback received and marketing strategies are in place, develop additional prototypes for a select market release in specific locations. This will be like a mini-launch that includes the product in its actual packaging and all the marketing messages etc. that will normally accompany the product in its normal release. This step provides an opportunity to validate the entire concept and a final chance to improve the product, packaging and marketing strategies.
7. Launch: Create a launch plan that will take care of questions like how much to produce, where to launch and distributors to target in case of items that will be sold from stores. The plan should ensure smooth launch along with maximum impact.

Plenty of product development and consulting companies are available out there on the internet that will be willing to partner you on your startup journey. They also recognize the financial constraints of startups and have very comfortable terms and conditions. The key decision, however, that you need to work on is whether to do product development in-house or to outsource the responsibility, partly or fully. Remember that your product and its development process is your ace up the sleeve against your competition. Here are some top-of-mind thoughts on the advantages and disadvantages of outsourcing.

There are several obvious advantages in outsourcing processes. Many of them would be generic and not specific to product development. You stand to save money considering the cost-to-company of a full-time employee along with other overheads as compared to what you will pay a product development partner. You can rapidly scale-up without having to go through a time-intensive and expensive recruitment process to onboard personnel. Likewise, you can easily scale-down operations without having to realign or layoff employees who are currently working on product development. You get access to top talent in the outsourced field, which may not be readily available in the market for recruitment.

The disadvantages are also quite significant and require to be seriously considered before taking a decision on outsourcing. Foremost is the issue of security. The know-how and process (your aces) will need to be shared with the outsource partner, this may lead to loss of your intellectual property. You become dependent on the supplier and may lose control over costs, timelines and quality, unless you have very strong processes and follow-up mechanisms in place. Finally, come the various challenges when you want to discontinue the outsource agreement and do the development in-house. It might take you several years to reach the level of expertise and perfection that the supplier had achieved.

Undertaking product development in-house is becoming easier with the commitment of support from various ministries of the Indian government, trade associations such as National Association of Software and Services Companies (NASSCOM) and premier educational institutions such as National Institutes of Technology (NITs), the Indian Institutes of Information Technology (IIITs), the Indian Institutes of Science Education and Research (IISERs) and National Institutes of Pharmaceutical Education and Research (NIPERs). In addition, the Hyderabad Software Exporters Association (HYSEA) aims to make Hyderabad a hub for product development by providing all support including exposure to best practices and peer networks. The Indian Institute of Engineering Science and Technology (IIEST), Shibpur, West Bengal is planning a center for product designing and development, where students will be trained in the manufacture and design of components of various industrial products.

So, what we can gather is that product development is a critical enough factor that determines the success or failure of a startup or its products. You need not be too concerned about how product development will be done, in-house or outsourced. This decision may impact your bottom line to a certain extent, but will not drag you out of business.

Thomas Edison once said,

I have learned fifty thousand ways it cannot be done and therefore I am fifty thousand times nearer the final successful experiment.

Even during the product development cycle you need to involve the customer to help you evaluate your ideas and certify that there is a demand for the product. You also need to depend on them to test your prototype(s) and do market testing. These activities are normally done with a core set of customers. Furthermore, you should spend time and work out strategies to hook the general public to your product.

Understand what Simon Mainwaring is trying to say when he stated:

Not since the digital revolution in the early 90s has technology placed such a comprehensive burden on business, employees and individuals to reinvent their business plans, services and products, and themselves to keep pace with the changing marketplace.


1.Aaron Schildkrout. 10 Core Principles of Product Development from Aaron Schildkrout. 2013. http://www.fastcolabs.com/3015920/open-company/unblocked-a-guide-to-making-things-people-love-part-1
2. Chris Newton. 7 Steps of Product Development. http://smallbusiness.chron.com/7-steps-product-development-18497.html
3. James Duval. Eight Simple Steps For New Product Development. 2013.
4. Vivek Wadhwa. Should Tech Startups Outsource Product Development? 2010. http://techcrunch.com/2010/04/17/should-tech-startups-outsource-product-development/
5. Special Correspondent. Forum aims to strengthen Hyderabad as hub for product development. 2015. http://www.thehindu.com/news/cities/Hyderabad/forum-aims-to-strengthen-hyderabad-as-hub-for-product-development/article7829190.ece
6. Gurvinder Singh/SNS. IIEST to get product design centre. 2015. http://www.thestatesman.com/news/bengal/iiest-to-get-product-design-centre/100545.html