New Product Development: 7 Successful Foundations

Often referred to as the “fuzzy front-end” of the development process, idea generation is a key component of a successful new product. Without a creative, forward-thinking list of potential new products, the entire process is doomed to failure.

A successful idea generation stage features incorporating a wide range of potential ideas from as diverse a group as possible. Respect for ideas means there are no bad ideas. Also, don’t worry at this stage whether you can build the product or whether you should build it, simply whether it solves a consumer problem (pain point) in a unique way.

Asking consumers for a solution commonly leads to suggestions for improving existing products, rather than developing entirely new ones. However, inferring pain points from their communication might suggest great options. You see, people buy solutions, not products. Do you solve a problem that a sufficient number of consumers have? One that will help them more than existing products already on the market.

Ideas can come through internal brainstorming, problems you face in your own life, or hear from others (such as social media, shifting market trends, or even analyzing the limitations inherent in competitors’ products. People are your best source because they complain about problems they face — their unmet needs. Solve one of them and you’ve taken the first step to a successful new product. Social media is a great place to look for these unmet needs. Or, just open your eyes to look for people struggling as they go through their daily lives.

For instance, the iPod, which is now old technology, solved a problem experienced by Steve Jobs’ daughter, Lisa, who was limited in the music she could listen to because media players required bulky disks. Similarly, the Chrysler minivan notion came from observing how consumers used existing car configurations.

Your next task, once you have a great product idea (or better, a list of potential problems you might solve), it’s time to look at competitors. What solutions are already out there and can you make a genuine, significant improvement that is sustainable — sustainable competitive advantage. Also, no matter how good your product is, you’ll have an uphill battle if you’re going against a giant like Facebook or Grubhub (which I see startups trying to do every day). They just have too much brand equity built over millions of dollars of advertising.

This stage is challenging, as it flies in the face of business norms by throwing out rational thought. It involves uncertainty, is constrained by groupthink and internal politics, and takes a lot of time. The first stages of design thinking often act as guides in this process.

Now, we get into the nuts and bolts of new product development, shifting from fuzzy to disciplined thinking. We begin by winnowing down our list of candidates to the top three or so because we need to conduct an in-depth analysis before moving on to later stages of the development process. Again, internal politics can invade the process, so try to avoid it.

At this stage, we need to consider aspects such as feasibility, market potential, and strategic fit. This involves actual research rather than assumptions.

Feasibility involves an analysis of whether the proposed new products are possible with our capabilities and resources, without straining our commitment to our existing products and markets. We may use strategic tools such as an Ansoff matrix or by graphically existing products in the marketplace to determine where opportunities lie.

Determining market potential is a tricky process, as asking prospective buyers whether they would buy something they’ve never seen and how much they would pay for it is often misleading. Students were asked to determine the market potential for a new aquarium in a town increasingly attracting tourism. Findings suggested a large potential market willing to pay a reasonable amount to enter the facility. Unfortunately, once built, the traffic didn’t match anticipated numbers for many years.

So far, you’ve done new product development without much outside input beyond data. Now it’s time to involve your target market in the process. Gather a group of prospective buyers together, physically or virtually, to test your idea. Provide as much concrete information about what it looks like and what it does as possible.

New product development relies as heavily on design as it does function. Again, think about Jobs and the first MP3 players–their success was more a function of operation than performance. The product was intuitive, so users picked it up and used it without needing to read the instructions.
Other elements of design are equally important in new product development. For instance, in a car consumers use things like fit and finish (do the doors close with a solid sound, is the interior well thought-out) because they’re not in a position to evaluate the mechanical elements of a new car.

This is an iterative process with the next step, as you’ll likely learn more from potential buyers as you test your idea, refine product development, and retest the idea. I worked with a SaaS startup where we spent months iteratively going back and forth with our target market.

Now’s the time to determine whether your idea has legs and what you might need to change to appeal to your market. It’s much less expensive to find flaws in your thinking now, before continuing through the process. Once you get to the product testing stage, things get much more expensive. This is the basis behind processes like lean and agile.

Often referred to as prototyping, product development gets into the nitty-gritty of building your product. For physical products, this means creating a prototype or small model, while for software, it means building a minimum viable product. Tools like Figma, Sketch, Adobe XD, Miro, and Proto.io use AI to help build working prototypes of software that are just missing the backend.

Not all elements in the merger of design and business are equally important. UX deserves its own treatment due to the importance of this element in user adoption. Take a look at the lean UX design process in the image below to get an idea of how this design element requires more than just design — it requires a business understanding of customers and how they use products.

Want more evidence? Take a look at Facebook. When it was initially developed, MySpace was the talk of the town. Yet Facebook basically wiped them off the map in just a few short years. Now, MySpace struggles to hold on while Facebook has over a billion users, many of whom access the app every day.

Why?

Because Facebook’s UX is intuitive. Once you set up MySpace, you don’t know what to do with it unless someone shows you how it all works. It’s like my daughter talked about Aldi. Now, her favorite store, she wasn’t sure how it worked at first. The whole idea of needing a quarter to get a shopping cart and bringing your own sacks was foreign. The first time, she only went because someone who shopped there always went with her to show her the ropes. That’s a bad UX design.

Involving prospective users in the development of the UX avoids costly mistakes that will have to be re-engineered or cost you customers.

Designing for simplicity and consistency is a critical element of a good UX.

Some outlines of the seven steps in the new product development process put this step in position four, rather than five. If you read my earlier comments about the iterative nature between concept testing and product development, you can easily understand why I moved this step into this position.

Business analysis involves building estimates of how much it will cost to actually build your product, which go into your pricing strategy and allow you to build ROI projections.

Part creative and part logical application of business processes, building a business plan is important. Sure, we all know businesses that were successful without one, but it’s still an important exercise to build a business plan, if for no other reason than to force yourself and your team to think logically about the journey you are starting. A good captain knows what he/she will face and has contingencies in case of unexpected events.
If you’ve never built a business plan, here’s the link to an earlier post to get you started in the right direction.

As part of your business planning, you should know the steps necessary to bring your new product development process through the necessary steps to give it the best shot at success. Who will you need to help with the development, marketing, design, financing, and other activities? What skills should they have? When should you bring them on board? How much money will you need at each stage in the process and where will that money come from? How will you test market acceptance throughout the development process?

Merging elements of design and business, marketing fits nicely at the cross-section of the two Venn diagrams. Marketing requires adherence to design elements, such as the style guide, but it needs elements that are strictly business, such as positioning, messaging, and influence.

Branding should flow from your marketing, especially positioning. Product design needs to support branding.

Rather than putting all your eggs in one basket, market testing allows you to float your idea with your target market. Maybe you test your new product within a limited geographical area or do a soft launch with invited guests and the media.

Market testing goes beyond testing your product. It helps you identify bugs and user issues that might arise before a full-scale product launch. For example, once we had a product available, we took it to individuals within our target market. We stood with them as they used the product to determine usability issues and identify bugs.

You’ll also use this to test your marketing communications. Are you hitting the hot buttons with your communications? Do you highlight the more important benefits without overpromising? Are you advertising and distributing your product through the right channels?

Here’s where the rubber meets the road. You must coordinate your marketing communication, your sales efforts, customer support, production, and distribution channels to ensure everyone is on the same page and that product flows smoothly through the pipeline. Nothing is worse than having orders you can fill or products sitting in a warehouse while customers clamor for it because you offered a great deal to entice them to buy.