David Pereira Product Leader with 15+ years of experience. Partner at Value Rebels and interim CPO at omoqo. Almost every product team is trapped somehow; untrapping them is what drives me.

The new product development process: 7 stages

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7 Steps To The New Product Development Process

Ideas are nothing without outstanding execution. Anyone can come up an idea, but transforming it into a product people care about is an entirely different beast.

In this article, I’ll share the seven stages of the new product development process. By “new product development,” I mean the process of taking a brand new product from idea to market.


The seven stages of the new product development process are:

  1. Find a problem worth solving
  2. Understand the market
  3. Be laser-focused on the problem
  4. Aim for a niche
  5. Give people a reason to use it
  6. Create a Most Lovable Product
  7. First market-fit, then scalability

Seven Steps To The New Product Development Process Graphic


1. Find a problem worth solving

Not all problems deserve your attention. You need to invest time in identifying the ones that will help you create value for customers and businesses. Yet, finding them is anything but trivial.

Problems are all over the place. You just need to observe what happens around you. For example, Reed Hastings, co-founder of Netflix, paid a late movie rent fee, realized the experience sucked, and decided to improve it.

I’d say that you should initially search for three aspects:

  • Desirability: Do customers care about it?
  • Feasibility: Can you solve this problem?
  • Viability: Is it viable from a business perspective?

Once you identify a problem that customers care about, you can solve and create business value. It sounds like an idea worth pursuing, but don’t get too excited about it. Before going all in, you must learn other aspects of this problem space.

2.  Understand the market

It’s easy to get super excited about your idea and jump into a minimum viable product definition. Not that fast, my friend.

First, you must understand how people solve that problem and if they really care about it. I call this step market understanding.

Here’s what you should do:

  • Talk to people having the problem you aim to solve — Strive to understand how they get the problem solved now. Identify the pains and gains people have while solving the problem
  • Look for potential competitors — Is anyone trying to solve this problem already? How are they solving it? You could become a customer and learn by yourself
  • Search for differentiation — Evaluate how you could differentiate from available alternatives

An essential hint: never ask customers if they’d use a product you’re thinking about creating. People are gentle — they will say yes, but that means nothing.

3.  Be laser-focused on the problem

As you build a better market understanding, it’s time to pick a laser-focused problem you want to solve. This part is vital for your success. I imagine your idea might be broad. You must narrow it down as much as possible.

Maybe you disagree with me, but that’s ok. Let me give you some real-world examples:

  • Amazon didn’t start by selling everything at once worldwide. In the beginning, Amazon sold only books. No more, no less
  • Netflix didn’t start by creating content or streaming worldwide. They began with DVD rent per post

Focus is critical to your success. The importance of starting small is the speed you learn. Without that, you’ll stretch yourself too thin.

4.  Aim for a niche

Combining to start small, you must narrow down your audience as well because the first goal is learning and not scalability. When you start big, you will have tremendous exposure and end up dealing with too many problems, limiting your learning capacity.

You don’t want media attention in the beginning. You want to ensure you have a laser-focused problem with a niche audience.

For example, Facebook wasn’t an open social network from day one. It was a social network for Harvard students. Within that, Mark Zuckerberg and the company could accelerate learning and continuously improve the product for the small audience.



5.  Give people a reason to use it

At this step, you should know which problem you’re solving for whom and how that creates value for the business and customers. The question now is: how do you get people to use your product?

To answer this question, you need to understand your audience. Your creativity will play a critical role in need. Here are some key aspects to explore:

  • Make an advantage of using your product first — Suppose your business is a marketplace. Sellers can only benefit once you have enough buyers, and vice versa. One of the sides needs to have considerable advantages to join your platform in the early stage
  • Exclusivity — Some platforms start as a closed community. To get there, you need an invitation. Doing your job well creates a fear of missing out, and people will long for this invitation
  • B2B — This is a conservative business model. Most companies won’t use your product unless somebody else is using it. Yet, you can offer the advantages of joining you in the early stage — for example, influence on crafting the product functionalities

The market is flooded with products and services. Your value proposition won’t be enough to get people to use your product. You need to give them advantages to start using something in the early stages.

The secret is identifying the early adopters because they are open to broken experiences in exchange for being the first to use something new.

6.  Create a Most Lovable Product

First, create a product that’s lovable for a smaller audience, then you can think about scalability. I’ve seen too many products failing because they tried to scale too fast.

I understand that investors pressure founders to scale and bring results. That will happen only if you do it correctly.

The longer you keep your product with a smaller audience, the more lovable you can make it.

A common mistake is defining the MVP and doing a complete implementation. This will lead to waste because most of your ideas will fail.

Here’s how you make a most lovable product:

  • Identify and prioritize assumptions — Take time to identify your critical assumptions. Prioritize the assumptions you need to test. Strive to uncover what you don’t know, and if it’s business critical
  • Start with quick experiments — Craft experiments to give you the right direction. For example, unmoderated prototype, interview, wizard of oz, concierge. Such experiments should take no more than a couple of days of work
  • Decide based on evidence: based on the experiment results, decide between evolving, dropping, or pivoting
  • Strengthen your experiments — Your first experiments create weak evidence. After that, you need to gather stronger evidence. Now you want more commitment, e.g., subscription, purchase, and promise to buy
  • Improve — As you expected, you’ll learn some things and should enhance your user experience and offering accordingly
  • Repeat until your product is loved — You should continuously work on these steps until your customer satisfaction is ultra-high. If you work with Net Promoter Score, you want 90 percent of your customers-base to be promoters without detractors. That’s why you aim for a smaller audience in the beginning

7.  First market-fit, then scalability

Once you have a most lovable product for a niche audience, it’s time to scale up gradually. You’ll still face a chance that your product doesn’t work for a bigger audience, and you want to test that.

Coming back to Facebook, they started with Harvard and then extended to more colleges. As that proved to work well, they gradually opened a social network. The idea is for you to have a similar approach, first prove a market fit with your product, then scale.


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Once you understand you have a market fit, you’ll probably need to work on your scalability. This step is essential to scale up.

A product that supports 50 users differs from one that supports 5,000.

Hopefully, once you reach this level, you’ll have a value-driven mindset. A product is never final. You always learn something from your customers and have opportunities to make it better.

Final thoughts

The seven steps mentioned will help you bring your product to market, but expanding it will require continuous learning and adaptation. Never settle. Keep improving your value proposition.

It’s hard to start a new product. Failure knocks on your door several times before you can succeed. A value-driven mindset combined with product thinking will increase the odds of thriving.

Once you find a problem worth solving, do your best to solve it well and create an outstanding experience. People will use your product when you help them get their job done well.

Featured image source: IconScout

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David Pereira Product Leader with 15+ years of experience. Partner at Value Rebels and interim CPO at omoqo. Almost every product team is trapped somehow; untrapping them is what drives me.

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