startups

Strategy for Startups: Product Development

Strategy for Startups: Product Development

Nowadays, the most successful companies tend to be the ones that are best at innovating, which is why both large companies and startups focus their efforts on leveraging emerging technologies and manufacturing processes to develop products that solve customer needs.

In the current market, it’s the companies that get innovation right that get rewarded. In contrast, the others tend to be forgotten in a short time because, without innovation, they can no longer differentiate themselves from the competition.

If you run a business that sells a product or service, your ultimate goal is, of course, to sell as much as possible. Unfortunately, many startups don’t follow the right product development strategies, so they end up with products that only appeal to a very small audience.

If you’re marketing B2B, you’re positioning your products to a niche audience, so it’s even more important to come up with a product that helps your customers reach their own business needs and know how to market it so that they see its value.

B2B Products

B2B products can be tangible goods (i.e., engineering equipment) or services (i.e., business consulting). The success of a B2B product relies, first of all, on its ability to create value for its target audience and, to create this value, product development needs to be viewed as part of a broader business strategy.

What is a Product Development Strategy?

Product development involves coming up with a product idea based on customer needs and market trends, developing the products, and then launching that product on the market and promoting it through creative product design and advertising strategies.

The target audience is key, so it’s taken into account every step of the way from the initial idea to manufacturing, testing, and marketing.

Product development involves a set of activities, such as:

  • The initial concept
  • Describing the customer needs the product will address
  • Framing the initial concept in such a way that it applies to as many customers as possible
  • Identifying and planning the steps required to bring the concept to the market

The main goals of a product development strategy are:

  • Gain a competitive advantage
  • Align product ideas to market trends
  • Increase the predictability of new products
  • Mitigate risk

Core Product or Service + Value Adds

To create a product or service that customers will actually be interested in buying, you first need a core product or service that solves a problem.

For example, biomedical diagnostic equipment that will help physicians test for specific medical conditions or a management service that helps IT companies streamline their operations.

Since the current market is so competitive, a core product or service is not enough. You have to come up with additional features that enhance the value of the core product or service – what we refer to as “value adds.”

Value adds can consist of programs, systems, or services that help customers use your products and, in the case of B2B customers, help them achieve broader business goals like increasing revenue and decreasing costs or risk.

Examples of value adds: delivery, installation, maintenance, audits, consulting, market research.

Your “Go To Market” strategy refers to the way your company brings its products or services to the market. If you are planning to enter a new market, you need to make sure that what you have to offer is tailored to the customers you are targeting. You can do this market research on your own or collaborate with specialized companies such as Sapio Research.

Either way, you should focus on the following areas:

  • Installation or Onboarding
  • Service and support, which should include: maintenance, fault restoration, complaint handling, and queries.

When developing your “Go To Market” strategy, you will typically need to provide:

  • Different levels of service
  • Channel preferences for these services ( i.e., online and over the phone)
  • Methods to provide these services in different languages and in different time zones

Launch with a Minimal Viable Product

No matter how good your idea for a product is, you will always have concerns about its performance on the market. You’ll also have a tendency to get caught up in what you think is the best solution and forget that you’re not the one who will be buying the product. Whether you’re developing a gadget or an app, if you rely only on your instincts and experiences, you run the risk of investing your time and financial resources in a product-market mismatch.

That’s why research is vital to product development and a successful product launch. You need to find out who your customers are and what they’re willing to spend their money on. On the other hand, you don’t want to overdo it. You can’t spend all your time conducting research and perfecting your product because your competitors might get ahead of you. It’s better to launch with a minimal viable product and then make improvements according to the feedback.

At this point, you can engage with your target audience through surveys, focus groups, and other similar tools. The key is to improve your product’s design so that it retains its most useful features while introducing other innovative elements that satisfy customer needs.  

In regards to business goals, you need to remain realistic. Of course, you want your company’s products and services to become the dominant brand on the market. Every company wants that, but few manage to actually reach this objective, and it usually takes many years of constant improvements and financial investment. Instead, focus on a consistent profit figure that can ensure healthy cash flow for your company.

The Right Team

A company’s ability to innovate depends on its team. They’re the ones responsible for company operations, management processes, and optimizations.

Even though the whole is greater than the sum of its parts, you will have to select each team member carefully so that they have the right skills, can fit in and add to the company’s creative potential.

Keep in mind that impressive academic credentials and experience don’t necessarily equate to creative thinking, so your hiring process should be designed in such a way that you can identify people that aren’t just smart and skilled but also innovative.

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