Henry Ford is supposed to said once:

If you put one dollar into your business, you need to put another dollar into it to make it visible.

According to this, we would at least like to announce that we as a software company are in the process of developing a (digital) product. We cannot yet reveal much about the product. However, we would like to take this opportunity to address a few topics of the first product development phase.

What are our challenges in product development?

One of the biggest challenges in the first phase of product development is financing. The idea, the team, and also the market for a potential product can look so promising. But first, it must be clarified how the development of the product is funded. We rely on subsidies and self-financing. For this purpose, we applied last year for the Invest BW funding programme of the state government of Baden-Württemberg (Germany). More information on the funding programme and the funding invitations can be found at (in german): Startseite » Invest BW: Innovationsförderung

Besides financing, another challenge is to identify a market niche that has a natural need for a product. Many companies — especially start-ups like us — are increasingly trying to develop new products. The barrier of finding an unfilled or poorly filled market with customer potential is therefore becoming more and more difficult. These days, a high level of specialisation or the combination of features from different target markets or technologies is important.

Finally, the product must be implemented by the company and, therefore, especially by the employees. Scientific articles say that an inadequate product team is one of the main reasons for product development failure. As a result, we are currently looking for motivated developers to start product development with us immediately from the very beginning and to strengthen our expertise in the scope of application development.

How did we plan product development?

First of all, product development must be seen as a strategic goal of a company. In the best case, products deliver sustainable added value for the users and the developing company and therefore contribute to a company's success. The company's strategic alignment also depends a lot on which product fits with the company in general. As an example, a company from the medical branch would probably not develop a product for the automotive branch, unless a product would be combined in both branches and thus represent an added value.

This fundament already creates the first "milestone" in product development. An analysis of the market segment must be done before making further decisions. According to strategic product development principles, we analysed the market situation based on the idea. And by using our own core competencies, we decided how the product should be structured to deliver a value for the market. Especially start-ups have big hurdles at this point, as they may lack market experience, a good network or the feedback of potential customers. A market segmentation strategy is therefore already necessary in the early stages of development. On this basis, surveys can be conducted to find out who the potential buyer groups are or how they can best be reached.

Why do we want to develop a product?

If the barriers for developing a product are so high, why would a start-up want to develop a product at all? First, a difference must be made between start-ups and companies that already offer a product portfolio on the market. Start-ups often have the wish to improve/change existing products or market conditions. Existing products that are established on the market may not seem perfect to many people. But this means that disadvantages and weaknesses of existing products can be quickly identified, giving start-ups the chance to realise new and better products. This offers start-ups an opportunity to present a USP for new products. There have been numerous examples of this in the past.

Companies that already have a product portfolio typically want to ensure the company's growth in a sustainable and a long-term perspective. Due to the competitive situation and constantly changing market conditions, companies have to develop new products to not be left behind the market.

For us, changes in our society play a major role in which we want to actively create improvements. Therefore, the key question for us is: How can we as a company contribute to improving one aspect of our society?

How can product development be planned from a management perspective?

From a corporate management perspective, product development is usually considered strategically. This perspective is necessary to ensure that the product is aligned for the customers and the own company. However, the operational planning of a product ties up many company resources that are lacking for a successful practical implementation of the product. Many companies therefore choose the path of MVPs (Minimum Viable Products). This means that the company develops a product in the most basic form, which already delivers one or "the" added value on the market, to then measure whether the product has the required market significance at all. From this, conclusions can be drawn on how the product should be refined and developed to be able to offer features to other customer groups or to the customers already using it. Adapting the product to the needs of the customers plays a key role in the next step.

Of course, we will discuss all issues in a strategic manner and discuss ways to maximize the product's potential value.

The path is the goal, all beginnings are hard

No successful company in this world has developed and successfully launched a product from one day to the next. Behind this, there are often many strategic decisions, clever marketing strategies, and, of course, a high effort for the necessary company resources. In this context, product development is like many areas of personal life: from an idea, a vision can be developed, which is then used as the basis for the mission and the resulting milestones. The vision defines the goals, strategy and direction of a company. The mission, on the other hand, specifies how the goal from the vision is implemented in daily business.

As a small software company, product development also creates new challenges for us. Financial risks, planning uncertainties or even the discussion about the "right" product for our company can only be solved in teamwork.

From time to time, we will inform about our product development on this blog and thus make sure that our customers are informed about the added value of the product at the right time. Who knows, maybe you will also be affected by our product one day. Be curious to see what we develop for you!

Jakob Hofmann is writing for the devlix Blog at https://www.devlix.de/blog
This article was published first here (german): https://www.devlix.de/devlix-news-wir-entwickeln-ein-produkt

Feature image: Photo by Frank Schillinger, Midjourney