The 7-step new product development (NPD) process

Phones that read UPC codes. TVs for buying NFTs. Bluetooth speakers for your...glasses? We’re living in a time when no idea is too outlandish to bring to life. In the era of startups and unicorns, your next big product concept could change the world—or at least your revenue stream.

The hard part is getting from idea to execution. Roughly 30,000 new consumer products launch every year, and 95% of them fail. In addition, only 40% of product ideas ever actually make it to market. Without a solid new product development process, or NPD for short, products flounder in the conceptual stage—or worse, entrepreneurs pour money into new products that never get off the ground.

The mindset required for product innovation is quite different than the mindset you need to actually make, market, and sell the thing.

In this article, learn what NPD (or new product development) is, how it differs from product management, who is typically involved in the process, and the seven stages of the product development process. 

What is new product development?

Product development is the end-to-end process of bringing a new product to market—conducting initial research, creating a prototype, building a team, launching a marketing plan, testing the product, and planning the sprints to get something built. The process of product development can also determine whether a new product is successful on the market.

What is the difference between product development and product management?

You may hear the terms product development and product management used interchangeably. While these two functions overlap in many ways, they are fundamentally different. The focus of product managers is to provide vision and ambition around what a product could be. They gather input from all kinds of stakeholders and create an ambitious product roadmap.

Product developers, on the other hand, do the tough work of bringing a product to market. They’re the pragmatic feet on the ground, constantly prioritizing development tasks and refining the product to be realistically achievable.

• If you’re suddenly realizing that you’re in the wrong article, we invite you to read What is a Product Roadmap? Guide & Examples.

Who is involved in the product development process?

Unless you’re a solo entrepreneur pulling all-nighters to get your first app out the door, the process of bringing a new product to market usually involves multiple people. These “stakeholders” on a product development team each have their own specific areas of expertise and interest, and weigh in on various parts of the development process. 

Some of these stakeholders come from areas of expertise such as:

• Project management

• Product design

• Software development

• Marketing

• Sales

• Finance

In addition to internal stakeholders, startups and entrepreneurs often rely on external support in the form of mentors, freelancers, and investors, especially in the beginning stages of product validation and bringing a new product to market.

While the development team is at the center of new product development, in a startup, the process can also be spearheaded by a company founder—the CEO, CTO, or product lead. Within more established companies, the product development cycle is owned by specific departments tasked with creating new products.

What are the benefits of following a structured product development process?

The top three reasons most startups fail? They run out of cash, discover there is no market need for their product, or realize they have a flawed business model. While a business model is not the same thing as a product development strategy, the two are certainly dependent on each other.

So while the most obvious benefit of creating a product development strategy is to get a new product to market, there are other important reasons to invest deeply in this area. Companies with strong product development strategies are more likely to:

• Win business from competitors

• Increase revenue and popularity

• Reduce product development costs

• Get to market faster

• Create a culture of innovation among your teams

• Stay attuned to what customers want

• Achieve other specific business goals, such as entering a new market or grabbing new target audiences

• Increase sales to existing customers and improve the success and popularity of a product over its entire product life cycle

What are the 7 stages of the product development process? 

In the tech world, these seven stages of product development have emerged as the gold standard for getting a new product to market. 

1. Idea generation

Whether a lightbulb went off in the shower or you’ve arrived at a new product concept after years of research, every product development project starts with a great idea.

2. Idea screening

But is it a good idea? Before you launch into full-scale product development, conduct due diligence to ensure your idea has legs. You may have more than one idea for the direction a new product could take, or multiple product ideas. In this stage of the product developmentlife cycle, analyze your ideas for viability. This often involves some preliminary market research.

3. Concept development and testing

During these early stages, it’s time to put your idea to the test. Typically this means finding a focus group to present ideas to, then gathering feedback. Throughout this process, you may present multiple ideas and various features, iterating on those ideas and features until you’ve arrived at a plan that feels solid.

4. Marketing strategy

Before you even begin to build, another essential component of your research should be market research. Who do you envision as the target market for your product? Does that market or audience exist? How many people fall into the category, and what messaging might appeal to them? The answers to these questions will ultimately inform a business analysis, where you determine whether there is a market to make this a viable product idea that can actually be successful.

5. Prototyping

The very first usable iteration of a product is the prototype. This is a significant step in the process because it’s the first time potential users can hold your product “in their hands” and try it. Whether your product is a digital app or a physical device, the prototype represents the first opportunity to try it in action.

6. Market testing

Once you have a prototype, you can conduct more comprehensive market testing. This is a trial run of your product to evaluate its performance and catch any bugs and errors. Often, product developers will send new products through at least one round of beta testing or concept testing—a stage in which potential users get their hands on a product before it’s available to the public. These early users get a first look at a new product in exchange for feedback and metrics that help improve the final release.

7. Commercialization

And now we are at the final stage: commercialization of the product. The product is released into the wild, with a product marketing strategy in place to give it the best possible shot at success. At this stage, keep an eye out for solid case studies that show off your product’s capabilities and could be presented to the public. 

This is, of course, a high-level overview of how to get a new product to market, but with these guidelines, you can get started putting a product development framework in place.

What is an example of the new product development process? 

Above, we outlined the seven steps that make up a best-practice process for product development. It’s always helpful to understand how product development might work in practice. 

Consider a new rideshare app (and no, we probably don’t need another one at this point...but bear with us).

At some point in this process—hopefully early on—you may deduce that your product vision was not as brilliant as you thought. If that happens, it’s time to abort or pivot. If your product makes it all the way through the development process, congratulations...and good luck.

At some point in this process—hopefully early on—you may deduce that your idea is not as brilliant as you may have thought. If that happens, it’s time to abort or pivot. If your product makes it all the way through the development process, congratulations...and good luck!

How can I come up with new product ideas?

You’ve got a grasp on the system. You get the general approach. But what if your idea doesn’t make it past the initial idea screening? What if you don’t have an idea at all?

This is the plight of the would-be entrepreneur. But never fear. 

Within existing organizations, product and feature ideas often come from customers themselves. Over time, feedback reveals what customers want and what potential customers could be persuaded to use or buy. This information comes from casually crowdsourced ideas as well as quantitative data. 

Teams themselves are also a great resource for ideas, because they’re intimately familiar with your products and brand, and know what else is possible.

But if you’re starting from scratch, you’re in a position to “blue-sky” it. In other words, anything is really possible. An idea management process might begin with a brainstorm. 

As you collect ideas, eventually your idea management process will turn into a legitimate product development process. If you track your ideas and research in a tool like Airtable,  you can later feed your ideas directly into a product development process—while keeping a record of the idea’s first seeds. An idea input as a record into your idea base can be pulled directly into a product development base without having to duplicate or rebuild any of your work.

Successful product development requires constant collaboration

As you develop a new product or tweak an existing product, strong collaboration is your most important tool. In order to be effective, teams must be able to communicate under all kinds of circumstances. It’s no longer a given that teams will meet regularly in person. Cloud-based tools like Airtable exist to enable remote and hybrid teams to bring their own perspectives and priorities to collaborative documents.

The right tools can help teams stay on track and improve workflow through the various stages of new product development. 

Real-time communication is critical to getting a new product launched, even if teams are working remotely. But asynchronous communication is equally valuable: enabling people to communicate on their own time, with the ability to work in tandem on documents in the cloud without creating version-control issues, and to insert comments in order to communicate on fine points. 

With Airtable, you can build out a process that is shareable, secure, and flexible. You can capture all your ideas, research, market share information, user input, and actual product development progress in bases designed for each particular use, with the ability to view all your work in various ways and filter quickly down to just the information you need. A relational database like Airtable ensures that your entire product team is referring to a single source of truth as you work your way toward a successful final product.

Use Airtable’s Product Planning Template to create a single source of truth for your entire extended team. The template helps you track and manage product ideas, a product launch, marketing campaigns, customer needs and feedback, and more.