Long-term and large scale IT projects often cost much more than planned and evoke unpredictable challenges with mastering key dimensions, aligning technical & business value or delivering the software on time and within budget.
Obsessed with an idea and success foretaste, business owners sometimes spend not enough time on testing the concept of their product, expanding the focus beyond the toolset and making sure that the niche market needs it.
The concept development phase is the first and foremost stage in the web product development lifecycle that requires from you as a business owner data-based research and analysis aimed at investigating your target market, defining the product market fit, gathering requirements and goals. Moreover, it helps to assess the risks of facing cost & time overruns, foresee so called “black swan” events, accumulate enough knowledge and avoid other pitfalls that occur when teams focus disproportionately on technology issues and targets.
You’ll learn about the ins and outs of the concept development phase, its process here at Apiko, and how it can make your product more competitive, top-performing and customer-oriented.
So let’s move on!
Table of contents:
- Top reasons why startups fail and how to reduce these risks
- Stages of software development
- Concept development stage: Whats and whys addressed
- The main benefits of concept development
- Key deliverables, project team and fundamental goals
- Steps of concept development phase from different perspectives
Top Reasons Why Startups Fail and How to Reduce These Risks
Usually, most startup founders and entrepreneurs think that they are standing on the edge of the next big revolution in the respective industry. However, in reality, only 1 from 10 startups do survive.
So why does it happen? The reasons for failure could be many ranging from lack of product-market fit to insufficient capital.
According to CBInsights, 42% of large IT efforts shut down as a result of no market need, 29% of startups ran out of cash and 17% of them became unsuccessful since they had no business model.
Moreover, McKinsey claims that 45% of software development projects overrun their estimated budget, 56% deliver less value than predicted, while 7% run over deadlines. Unsurprisingly, it happens because entrepreneurs want to push their product on the market as fast as possible and start to build it too soon.
As a result, they spend a lot of money and resources on creating a product that is not validated by potential customers. The product, a market doesn't need. Sounds bitter, right?
Over 7 years of working with startups at Apiko, we’ve analyzed more than 100 cases, and we can conclude that skipping the initial phase of planning and detailed estimation is among the leading causes of failure in startups. But you can avoid this if you spend enough time and effort on the first stage of the development cycle. It is called concept development - a pillar of your future product.
Stages of software development
Software development life cycle describes the steps performed during the application development. The process usually consists of 4 stages: concept development, technical development, quality assurance, and platform support.
- WBS & ballpark estimation
A Work Breakdown Structure (WBS) is a deliverable-oriented hierarchical decomposition of the tasks to be completed and the scope of work to be executed by the project team to accomplish the project objectives and create the required deliverables. A WBS is the cornerstone of effective project planning, execution, controlling, monitoring, and reporting.
- Software requirements specification
Before proceeding to development, we gather requirements and provide a rough project estimation. In order to define a clear roadmap for your project and prepare a backlog with user stories or use cases, Apiko team discusses with you:
- Short-term and long-term goals of your project
- Functional and non-functional requirements
- Niche: problems and expected solutions to resolve them
Our Business Analyst conducts direct, so-called ping-pong communication with you to picture the business logic and outline a scope of work needed to accomplish all your goals.
- Wireframes & UI/UX design
Apiko’s UI/UX designer and business analyst work together on your application wireframes and prepare materials for your software proper presentation (i.e. landing page with links to buy your product, branding printables, eBooks, etc.). This will allow you to:
- Define the hierarchy of your app’s navigation and design
- Test the idea of your product on the target audience
- Find out the gaps in your product's user flow
- Project estimation
Now, we’ll be able to provide you with a detailed estimation of the development process instead of a rough one. You will know exactly how many hours the development of your software project will take. The hours will be divided between the tasks, which you can easily rank and prioritize. Your involvement in the prioritization of the tasks and the progress tracking is guaranteed as transparency both in communication and development is one of our prime concerns.
Concept Development Stage: Whats and Whys Addressed
Concept development is the initial stage of software development, where you identify if there is a market for your product, study your target audience problems, build your value proposition, and prepare materials for testing it on your potential customers.
Business analysts at Apiko together with the engineering team conduct the research and analyze the technologies which will suit your software development the best. Our specialists choose tech stack and methods of development to meet your business needs, budget, and deadlines.
It is done before you invest any significant costs and resources into the development of an actual product. Prior to concept development, you need to be armed with several things. Here they are:
- You have generated an idea
- Have a general understanding of your potential customers, their problems, and needs
- Know how your product can solve these problems
- Know who your competitors are
- Need to test these assumptions before product development
The Main Benefits of Concept Development
When it comes to designing your value proposition, there is an important step called “discovery phase”. Our previous post on business idea validation dwells upon the importance of “discovery phase”, during which you have to find evidence that your potential customers need your value proposition and that your product solves their problems and makes their life better.
The fact is that this “search phase” is included in concept development. During the search phase, you shape your idea into a business model and value proposition canvases, create landing pages, learning prototypes, illustrations, brochures - everything that will help you express your idea to investors and potential customers.
If you skip this stage or don’t spare enough time for this, you risk scaling prematurely (create a value proposition that doesn’t address your customers needs).
With concept development you also can:
- Study your target audience and market
- Сreate a value proposition and buyer persona portrait
- Visualize your ideas/assumptions and present them in the form of prototypes, landing pages, brochures, storyboards, etc.
- Test these ideas to find out if there is a need for your product
- Create wireframes/prototypes to get an early feedback
- Gather a first client base
- Build a product, validated by your customers
Key Deliverables, Project Team and Fundamental Goals
As we concluded before, concept development is an intensive research period at the first stage of software development lifecycle.
Project team involved in this process consists of business analysts, PM & scrum master, UI/UX designer, web developers, mobile developers and tech leads.
Working closely with a client, this team accumulates its efforts to achieve the two-folded fundamental goal:
- Focus on managing strategy and stakeholders instead of exclusively concentrating on budget and scheduling
- Master technology and project content by securing critical internal and external talent, build effective teams by aligning their incentives with the overall goals of the project
Here are some of the deliverables you can expect to get as a result of the concept development phase:
Please, note that the deliverables may vary depending on the unique circumstances of your project
- Solution vision document
- Functional and non-functional requirements
- Architecture design
- UX wireframe design
- Release plan and detailed cost estimate
- Risk assessment and mitigation plan
- Clickable design prototype
Steps of Concept Development Phase From Different Perspectives
High-performing project teams have to pay great attention to improve the ways in which the company manages its internal and external stakeholders, such as business and IT executives, vendors, partners, and regulators.
Also, they have to make sure the project aligns with the company’s overarching business strategy and undertake detailed analyses of stakeholder positions. Project leaders continually engage with all business units and functional heads to ensure genuine alignment between business needs and the IT solutions being developed. That’s why we listed here our recommendations for business owners to take into account, before negotiating IT subcontractors:
- Step 1. List the benefits of the product and problems it solves
A first step in concept development is to create a detailed description of the project idea, its main goals, and benefits. Prepare a list of assumptions about what problems your product solves in order to test them on your audience later.
- Step 2. Analyze the target audience/buyer persona
After this, you have to analyze who you create this product for. During the whole process of concept development, always keep a detailed portrait of your potential buyer in mind. An efficient way to do this is to use an empathy map of your potential customer or buyer persona portrait. After analyzing your buyer persona, you will get a better understanding of your customer segments and a chance to craft an effective value proposition for each of them.
- Step 3. Conduct competitors analysis
Sometimes you should know your competitors better than your clients. Competitive analysis will help you to find the gaps in the market and fill them with your valuable offers. To analyze the competitors you can:
- Сategorize your competitors into primary, secondary, and tertiary
- Study their website and customer experience
- Analyze their content and marketing materials
- Learn about their services and distribution channels
- Identify areas for opportunities
To make your data more structured, use one of these templates.
- Step 4. Compose the main features of the product and its value proposition
A value proposition is the most important element of your business that explains how your product delivers benefits to your customers and solves their problems.
Value proposition canvas is a great tool that will help you to define your customer pains and build a product that will relieve them. Watch this video to use the value proposition canvas more effectively.
Remember that the main features of your product are the tools with the help of which you implement your value proposition. So concentrate on those, they will become gain creators for your customers, e.i. make your customer’s work or life easier, save their time or/and money, surpass current solutions on the market, etc.
- Step 5. Create materials for investors and potential customers
Before proceeding to wireframes and prototypes, you need to visualize your business model and bring it in front of your team, potential customers, and investors.
I want to emphasize that this is done before you start creating wireframes and prototypes. First of all, you need to test your idea and know who you build a product for.
For this, it’s better to use the materials that don’t take a lot of time/cost for being created but serve as effective tools for testing your idea and getting feedback. Here are some examples of materials we prepare for our clients:
- Landing page
A landing page is an effective tool that helps you find people who are interested in your idea, gather feedback, and create a word of mouth for your product.
The fundamental rule of a landing page is that it should have only one main purpose e.g. subscription to the newsletter, sign up for the webinar or some event, free upload of e-book or brochure with useful tips, product purchase, etc.
Here are the main elements a landing page should contain:
- Headline and sub-headline
- A brief description of your value proposition
- Images or a video
- Form for capturing information about your leads
Take a look at some examples of effective landing pages
Lyft - a marketplace that matches drivers with passengers.
- Brochures and presentations
Brochures are effective marketing tools for advertising your product and expressing its ideas and goals. Brochure serves as a visual brand of your product the main aim of which is to catch an eye and draw attention to it.
When you have gathered positive feedback and ensured that the audience is interested in your product, it's time to move on.
- Step 6. Create wireframes and prototypes
Wireframing helps you define your product navigation, show it to your potential customers, discuss its usability, and get insights into what elements on your app are the most crucial.
With wireframes, you can study each component of your app, play with its size, or location and analyze its interaction with other elements. It gives you a chance to get a full picture of what you create, structure your ideas, and get valuable feedback.
When wireframes are just “rough” schemes of your future product, prototypes are more related to your actual product look and feel. In contrast to wireframes and mockups, prototypes allow you to interact with the product, test its feasibility and usability.
Read also: Design and Prototype Process: Ins and Outs a Product Owner should know about
Now you are all ready and set for proceeding to a technical part of your product. Concept development stage allows you to save time and money, as you have already foreseen the risks, created a list of requirements and features, and validated your future product.Project delivery process