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Why Product Development Strategy Matters for your Startup's Success

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We all know these statistics. Nine out of ten startups fail. One in five products doesn’t meet customer needs properly. But what can startup owners do to avoid this risk?

Creating a product development strategy is a sure-fire method for mitigating the risks that come with releasing a product that needs to align with user expectations perfectly.

Ultimately, it’s all about asking the right questions right at the start of product development. In this article, we zoom in on the practice of product development strategy to show you what it is, how it works, and why startups need it to secure their survival and growth.

What is a product development strategy?

A product development strategy is a type of strategy that comes in handy for building new products or modifying the existing ones so that they appear as new. The strategy focuses on how we want to offer a product to both current and new markets.

Product development strategies are usually used when the company finds little or no opportunity for new growth in a given market. At some point, this organization might decide to update its product and or create another product for a new market. In the case of a startup, product development usually means building a brand-new offering from scratch.

How to build a product development strategy – key questions

Startup founders should be able to answer these questions at the onset of their work with a new product. If they don’t, they run a high risk of building a product that nobody really needs on the market.

That’s why it’s essential that startups ask themselves the following questions as soon as possible:

  • Who is my target audience?
  • Who is my ideal customer?
  • What is the most important problem that they need help solving?
  • What are their desires, preferences, and pain points?
  • What resources and skills do I need to succeed?
  • How can my product be profitable and deliver an amazing customer experience?

The key to building a successful product development strategy is to remain curious and remove any assumptions we have about the target audience, market, or even our product range.

Feedback and iteration are your process must-haves

The best products are created within the cycle of feedback and iteration as startup founders ask questions and answer them. Within time, their answers might differ. For example, they might learn more about their target audience and can, therefore, ask more detailed questions.

The answers to such questions become innovation levers in the product development strategy. They can guide startups in adding new features and functionalities that their users really need in order for the products to fulfill their core mission.

That’s why getting customer feedback is so important at this point. It’s impossible to get the right answers without talking directly to customers or watching how they use your product.

Start talking to your customers early on

During the initial phases of their growth, startups are all about studying, understanding, and reflection in product development. This helps to reveal new insights every time they confront the product with the target audience.

The idea here is to avoid becoming too internally focused when building a product. Instead, you should strive to connect with the external world, starting with your target customers, market trends, and even your competitors.

You might feel confident that your idea offers the right direction and the proper solution to a problem. But if you listen closely to your customers, they might tell you that it simply doesn’t work for them.

At this point, you can choose to follow one of two possible pathways:

  1. Stick to your plan and build a product believing that you’re right and they are wrong,
  2. Or change your idea, gather more customer insights, and then build a branded product from scratch using their feedback as the basis for your features.

That’s why customer feedback is so important during the early phases of a startup like the building of a Minimum Viable Product (MVP), Proof of Concept (POC), or even a prototype.

You don’t want to launch a product that antagonizes the very people you want to become your champions. How well do you think you know your customers at this point? Don’t assume that you know them so well that you can actually make decisions for them. Ask them about their opinions and then act on the feedback. This is the best direction for a product development strategy.

What about vision in product planning and development strategy?

To build a disruptive product, you risk because you’re investing in something completely new. That’s why the most important job of a startup leader is managing the tension between their vision and the customer’s voice. In the end, however, it’s your customers who make the call.

If your vision builds a product that no customer will buy, then you can be sure that you failed to ask the right questions and listen to the answers. It’s hard to do that if you hear something that you don’t want to hear.

Once you manage to answer the questions that are part of a product development strategy, you will see smaller and more specific questions reveal themselves and lead you to the way to growing your product successfully.

So, ask your customers and listen to them carefully. They are your most valuable resource when it comes to crafting a product development strategy.

Need help in developing a strategy for your startup product? Get in touch with us!

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