2a. The Product Development Process

“New products and processes come to the market through a process that first transforms ideas and concepts into working prototypes through detailed design and engineering, then tests and refines them, and finally prepares the product design and factories for commercial operation.” — Revolutionizing Product Development

That’s the best summary of the product development process that I’ve come across. Simple. Straight-forward.

Consequently, much of the content in Distillery emails will fall into one of these categories:

• Ideation and concept generation
• Prototyping
• Product testing and refinement
• Launching

There’s plenty more to consider, as you no doubt suspect:

• Strategy
• Marketing
• Market research
• Product management
• Design thinking

This list goes on and on.

Hopefully, this gives you something of a framework for the content to expect!

Main source: Revolutionizing Product Development

2b. What is a “Product”

It seems like a ridiculous place to begin, but these terms can be confusing, and it’s trickier than you think to define a “product.”

Here are some definitions:

A product is “a self-contained unit of economic value.” (The Personal MBA.)

“A product is the item offered for sale. A product can be a service or an item. It can be physical or in a virtual or cyber form. Every product is made at a cost, and each is sold at a price.” (Source) 

“A good, idea, method, information, object, or service created as a result of a process and serves a need or satisfies a want.” (Source)

I think these definitions are useful, but not one of them is perfect.

“Things”

A lot of what is referenced in Product Development Distillery has to do with physical products, but don’t let that lead you to think that all products must be physical objects. Not all products are physical objects; service is a product; a lease is a product; experiences are products; software is a product.

“For Sale”

Well, not always. Google’s search engine is “free,” but it’s still a product.

In Summary

To be honest, I haven’t seen a perfect definition of the word product. If nothing else, I want you to realize how broad of a concept a “product” is, and how most things around us are actual products.

There are lots of other definitions relating to products you might care about, so here’s a list for future reference:

Durable Product — like a car. It continues to exist after use.

Consumable Product — a product that disappears as you use it, like a banana or tequila shot.

Fundamentally New Product — a new product that likely uses a new technology or addresses an unfamiliar market, among the highest-risk new product ventures.

Product Platform — a set of common elements (usually technologies or components) that are shared across a family of products.

Incremental Product — one type of product development project; involves upgrading or enhancing features, or adding features but leaving some of the previous generation products intact, a “next-generation” version.

Derivative Product — a product that falls into an existing product platform; for example, a new smaller version of the Prius.

Ancillary Product — a product meant to complement another; the iPhone case.

Augmented Product — encompasses the product as well as any other extra value-adding sources, such as warranties, service, etc.

Main source: The Personal MBA By Josh Kaufman

2c. Product Development Methodologies

I want to introduce four product development methodologies. Some nerds will say they are not all technically “methodologies,” but for now, I don’t think it’s worth splitting hairs.

Waterfall

The waterfall method is sequential: products are planned, designed, tested, and launched, all in that order. This works particularly well when a product needs to be built right the first time.

Waterfall. You know, cause it looks like one.

Agile

The agile method is a set of values and principles. These values are set out in a document called The Agile Manifesto. They focus on things like adapting to change, collaborating with customers, and building software rather than documenting specs. You may have heard of Scrum or Kanban, both of which use Agile methods. More on them later. A lot of software companies use Agile principles rather than Waterfall to develop software products.

Stage-Gate

While the stage-gate method is similar to the waterfall, it emphasizes rigorous “gates” between different phases of development. The project passes through each gate by meeting certain criteria.

Stage-Gate Process, with gates represented by dashed lines

Lean

This method is broad. Lean is about taking inspiration from lean manufacturing and applying it to product development. It’s about fast-learning, low “inventory,” and other stuff that we’ll explain later.

Why Are You Telling Me This?

You might be thinking, “Wait, different methods? Which one am I going to learn about? I thought this was going to be straight-forward.”

Here’s the answer. Different types of products (an app versus a washing machine) are developed in different ways. This course walks through the fundamentals of product development, which are universal, and we’ll explain how various methods are used more in some cases (Agile for apps, Waterfall for washing machines), so you can understand the nuances.

Don’t freak out if you forget these methodologies in a few hours — you’ll know them well soon enough without even trying!

Main source: An article I wrote about different books for different methodologies.

2d. The Goal is to Make Money

There’s a book called “The Goal” by Eli Goldratt. Unlike Harry Potter, they have not turned it into a movie yet, so if you want to know the story, you’ll have to read the book. Or just read this short email.

Spoiler Alert Below!

The book “The Goal” is about a factory. The goal of the factory is — wait for it — to make money. More specifically, to make a profit.

The end.

Though “The Goal” is a book about a factory, nearly every enterprise, company, organization, or venture shares the same goal: profitability.

It may sound crass and capitalistic still, without profit, no organization is sustainable, and that means that any other more important goals (helping people, for example) cannot be achieved over the long-term.

What’s this have to do with Product Development?

Decisions about product development should consider economics; they should be made with consideration for the effect on profit.

Want to make a new product? Consider the effect on profits.

Want to add new product features? Consider the effect on profits.

Want to launch your product sooner? Consider the effect on profits.

Here’s the key point: there are no “best practices” that work for every product developer. Everything done in product development (product development processes, product development strategies, and product development life cycles) should support the ultimate goal of the organization (whether that’s a dude in a garage or a Fortune 500 company). For most businesses, that goal is an economic one (i.e., profit).

“A business is a repeatable process that makes money. Everything else is a hobby.” Paul Freet

Main Source: The Goal, by Eli Goldratt

2e. Recapping the Last Few Posts

A product is typically something that is offered for sale, but sometimes it’s technically free, and money is made in other ways (Google). A product can be a physical object, a software, a service, a loan, a subscription, an experience — it’s a broad concept.

There are different methodologies for product development. They share some universal elements still, there are unique processes and methods in each methodology that works better for some products than others (Agile for apps and waterfall for washing machines).

Most product development happens within the context of a higher-level goal, which is usually an economic goal tied to profit.

That’s it!

From time to time, I’ll throw out some book recommendations to mix it up.

I think Product Design and Development is the best product development 101 textbook out there. It’s a textbook, so don’t expect to be reading it for pleasure, but it’s a great reference for fundamental product development content.

If you’re starting to learn about Product Development, or even if you’re a seasoned professional, I think this book is a great resource.

This book is on my Best Product Development Books list, along with many others.

Until next time.

Book: Product Design and Development, Ulrich and Eppinger