Product development is the process of building a new product or service and (one hopes) bringing it to market. Start with a concept, define the requirements, build the requirements, test the near-finished product, refine it, and launch it. How you develop a product varies tremendously based on the methodology your organization follows (e.g., Waterfall, Agile, Scrum, etc.).


What all product development methodologies have in common is the desired outcome: a completed product for customers to buy. But what if the product you build is not a product that customers will buy? Is “product” the biggest risk your team faces? What about market risk? As Marc Andressen said, “Market matters most. And neither a stellar team nor a fantastic product will redeem a bad market.”* With customer development, you are building your customer base while you’re building a product or service that solves their specific problems.


Customer development doesn’t replace product development; it’s a second process that you do in parallel with product development. If you’ve done customer development alongside product development, you don’t need to wait until your product is launched to know whether customers will buy. You’ll know, because you will already have beta customers, evangelists, and paying customers. Customer development and product development are two independent activities, and both are necessary to maximize your company’s chances for success.