Software Product Development: A Complete Guide

Software product development involves more than just writing code.

In fact, writing code is just one phase of an extended and complex process.

The goal of this software product development guide is to help you understand the entire process—how it differs from software development, what to do before you begin, the phases of the process, and its benefits.

Software Development vs. Software Product Development

The difference between software development and product development is essentially a difference in mindset.

Software development teams focus on writing code and building a product that works well. They operate at the task level and focus on completing the code. The rest is someone else’s job.

Product development teams look at the big picture. They consider how the product will interact with other systems and processes, and how people will interact with the product. In other words, they focus on the product’s impact. They take ownership of the overall product quality and performance.

All of this thinking goes into improving the design of the product. Software development often sees design as secondary to the functionality of the product. But in product development, the look and feel are essential.

When it comes to feature requests, software developers often interpret them as orders to be followed. Product development teams, however, see them as user needs to be understood, clarified, and shaped into something that meets the needs of both the users and the business.

Both teams build software products, but software teams focus on completing a list of requirements, while product teams take a broader view of product quality, performance, and impact.

Before You Embark on the Journey

Before diving into the actual building and coding, take time to figure out your vision for the product, what the road forward looks like, who your core users are, and what they need. Once you have a clearer picture of the product, figure out how much of it you can afford to create.

Establish a Product Vision and Roadmap

Before you start development, make sure you’re seeing all aspects of the problem the product will solve. Your product vision should encompass the product’s primary objective and the bigger picture. This will help your team to understand what they are working towards and why.

To communicate the product vision to people involved in the product development process, you can use a tool called a product roadmap. The product roadmap provides high-level goals connected to the product vision, with tangible milestones that the product development team must meet to launch the product successfully.

A product roadmap can be used for the development of new products as well as for more extensive upgrades of existing solutions.

Research the Market

Once you have a clear vision for your product and the problem(s) it solves, do extensive market research to see if a solution already exists. What are your potential users doing to deal with the problem currently?

Even if there’s no product dedicated to solving the problem, there may be a workaround people use that’s “good enough.”

For example, let’s say you own a beauty salon and rent space to independent stylists. Business is booming, and your paper-based system is hard to manage. You look for software to help track reservations, fees, and so on, but nothing exists.

After asking other salon owners, you find they use an app for real estate landlords that does most of what you want it to do. “It’s not perfect,” they tell you, “but it’s the best we’ve found.”

So you start to wonder if you should build your own app. At this point, you face a build vs. buy decision. The critical question is, would your product deliver enough additional functionality to justify the cost? Would other salon owners buy it or just continue making do with what they currently have?

If your market research indicates high interest in your product, that’s a good indicator to move ahead.

Determine the Fundamental Requirements

Once you’ve determined that a market exists for your product, the next step is figuring out the essential features and functions. What do your customers want the product to do?

The fundamental requirements include the functions, features, and behaviors the product must have to be efficient, easy to use, safe, low cost, and otherwise useful and attractive to the customer.

If you get these fundamental requirements wrong, you might have to make changes later in the project, when it is more difficult and expensive. The cost of making changes increases the deeper you are into the development process.

Figure Out Your Budget

With your roadmap, market research, and fundamental requirements in hand, you have enough information to determine a budget for developing your software product.

Budgeting for software product development is a balancing act. You need to spend enough to get the product your business needs, but you don’t want to throw all your money at the project.

Software product development costs can spiral out of control if you’re not cautious. Set a maximum budget for the project and prioritize features and development activities that fit your budget.

Next, work with your development team to outline the project requirements and create a detailed requirement list. Budget for several iterations and leave room for maintenance fees and support after the product is released.

Keep in mind the factors that can impact your budget, such as:

  • Type of software
  • Complexity of the software
  • Security
  • UX/UI design
  • Frontend features
  • Backend infrastructure
  • Development methodology
  • Development team’s location (North America, Europe, India, etc.)

Taking these factors into consideration will help you accurately estimate your budget.

Stages of Software Product Development

Regardless of the software development methodology, the process generally follows the path described below. This process has been proven to help ensure the creation of high-quality software products.

We discussed the first three stages—market analysis, requirements gathering, and budgeting—at the beginning of this white paper. Once those steps are complete, you’re ready to determine the business model.

Determine the Business Model

The business model needs to support long-term success and take into account the product concept, audience segment, and revenue goals. Whether it’s a one-time purchase, subscription-based, freemium, or something further off the beaten path, the business model must ensure the product has the best chance to generate the required revenue.

Common software product pricing models include:

  • Freemium: Users can access a free version of the product with few (but useful) features, but they must upgrade to a paid plan to access additional features.
  • Pricing per feature: Users can pick the features they want to pay for.
  • Flat rate subscription: Users can access a set of features or the complete product for a monthly or annual fee.
  • Pricing per user: Also known as “seat licensing,” this model charges a monthly or annual fee for a set number of users.
  • Usage-based pricing: Users pay per minute or hour of usage.

A suitable pricing model depends on the target audience, product type, long/short-term goals, and other factors.

Define the Technology Stack

The technology stack is a list of all the technology services required to build and run the software product. The product manager and development team should get together to analyze all the components needed to bring the product to market. The goal is to prevent unpleasant surprises during the development process.

Key technologies to consider include:

Front-end: Product engineers use popular frontend frameworks like Vue.js, Angular, and React to develop a software product’s user interface (UI).

Back-end: The backend makes the application work. It includes the functionality for building the business logic, creating databases to store the data, and so on. The tech stack for the backend consists of a programming language (e.g., Django, Node.js), a server (e.g., AWS, Azure), and a database (e.g., NoSQL, PostgreSQL, MySQL).

Develop an MVP

Once your team finalizes the technology stack, the next step is developing a basic version of the software product. This first version is known as a Minimum Viable Product (MVP).

An MVP is a simple but functional version of your product that solves a single significant problem for your users. MVPs help reduce development costs, accelerate the product’s market release, and test the demand.

Teams use MVPs early in the development process to identify flaws in product design. They also aid in making critical development decisions and prioritizing features.

Test and Iterate

Once the MVP is built, it gets tested by a group of early adopters. The testing phase helps determine if the product concept meets the needs and desires of the targeted users.

By gathering user feedback early in the development process, the product development team can make the next iteration of the product better.

An iterative approach helps the development team correct their course early on. As a result, they can test the product’s viability before devoting too much of the budget to it. This approach also avoids missteps that lead to costly and time-consuming rework.

Check and Release the Final Version

With each iteration of the software product development process, the product should get closer to meeting your business goals and customer needs. In other words, it gets closer to the definition of done the team established at the project’s outset.

A clear definition of done and regular review of its application reduces partially finished work, wait times, and the cost of rework. It also gives the quality assurance (QA) team a list of criteria to be met as they test the product for defects.

Once the product passes the QA phase, it’s ready to be prepared for release. Depending on the product type, this could mean readying it for upload to a software distribution channel. Software distribution channels can either be direct or indirect channels.

Direct distribution channels involve a company’s employees, staff, and technical assets. They contact and sell to customers via phone, e-commerce store, or field representatives. Internal-only software products may be distributed via a private cloud or the IT department.

Indirect channels include app store marketplaces, in-app purchases, resellers, professional services firms, and other technology providers.

Support and Maintenance

After the software product is released, the support and maintenance phase begins. And maintenance, for a software product, usually means continued iteration.

The software product support team not only helps users resolve issues but also gathers more feedback and identifies errors and defects that need to be fixed. In addition, they help onboard new users.

Maintenance involves fixing errors and defects and looking for opportunities to grow the product and add new features. By analyzing customer feedback, your software product development team can look for ways to expand and grow the product.

Benefits of Software Product Development

Software product development lets you build a solution tailor-made for your business needs. Consider the potential impact of that for a moment. No more hodgepodge solutions that only kind of do what you need. You can create something that fits your business like a well-made glove.

Optimize Your Business Processes

Developing your own software product allows you to improve your business by leveraging what you know about it. You can build a solution that will give everyone in the organization access to relevant, up-to-date information quickly and efficiently. As the flow of information improves, so does your team’s productivity.

Solves Unique, Niche Needs

A custom software product allows you to enhance your business processes in ways that off-the-shelf software can’t. You can address niche needs that commercial software ignores because there isn’t a big enough use case.

If you’re Microsoft, Salesforce, or a similar software company, you will only put effort and budget into popular features. A feature that only a small percentage of your customers will use falls pretty low on the priority list.

Building your own software product allows you to fill those niche use cases—for your business and others. An insignificant percentage to a tech giant could be reasonably lucrative to a small or midmarket company.

Gives a Competitive Edge

If you build a solution that gives you more flexibility, productivity, or responsiveness to customers, you gain a leg up on the competition.

And it’s not an edge they can quickly mitigate. Unless you white-label your product, they can’t just go out and buy it to level the playing field. They would have to build a solution of their own.

Even if they pursue that path, it will take them months to catch up, giving you valuable lead time.

Adapts to Business and Market Change

The pace of change at giant tech companies is glacial. Even smaller software makers can be slow to address changes in the market.

When you have total ownership of a product you’ve built, you can quickly make the necessary alterations to meet change and address new needs. Where a commercial product may not be updated for a year or more, you can add new features and upgrades in a few months.


Developing a new product can be a trial, but when you do it right, the results can rocket your business to success.

Even when developing an internal product, you’ll end up with something that fits seamlessly into your business, delivers better results than commercial solutions, and doesn’t cost you ongoing licensing fees.

Even after this product development guide, if you’re not ready to tackle software product development on your own, give us a call. Taazaa has vast experience helping businesses build software that wows customers and improves productivity, efficiency, and profitability. Contact us today!

About Taazaa

Since 2007, Taazaa has helped hundreds of businesses like yours stay relevant in a world of relentless change. Leveraging custom software solutions and emerging technology, we follow design-based development practices that promote rapid delivery and a tailored fit to your business.

We’re agile. We’re high-empathy and low-friction. And we make great software products.

Contact Us

Taazaa Inc

Taazaa Inc.

1780 Stoney Hill Dr., Suite A Hudson, OH 44236
(888) 800-0016

For inquiries, please contact