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Having an effective new product development process has never been more critical. After years of relative stability in software development, generative AI is forcing product teams to fundamentally rethink their approach to product strategy.

According to Airtable's CEO, Howie Liu, "Companies will live or die by the strength of their digital products." The stakes are high—more than half of product leaders are already ramping up AI investment to better understand customer needs and prioritize features that will have the greatest impact.

But putting the right development processes in place is easier said than done. In this guide, you'll learn the seven stages of the new product development process, how to validate demand early, test concepts effectively, and align every decision to what customers actually want.

What is new product development?

New product development (NPD) transforms ideas into products people actually want to buy. It's a disciplined process that combines market research, design, business analysis, and testing into a repeatable framework for discovery, validation, and launch.

The payoff? Less risk, fewer failures. Instead of building on hunches or chasing competitors, product teams ground every decision in customer feedback, competitive intelligence, and market data.

The ultimate framework for launching new products

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What is the new product development process?

The new product development process is a systematic framework that takes a product from initial idea to market launch.

Think of it as a risk filter. Instead of jumping straight from concept to production, companies break the journey into phases where they can test assumptions, validate demand, and refine the product before investing serious money. Early stages are exploratory—many ideas enter, few survive. As a concept proves its worth, investment increases: prototypes get built, tests run, production scales up.

By launch time, the product has been stress-tested from every angle. The goal isn't just creating something new—it's creating something that will actually succeed in the market.

Who is involved in the new product development process?

A successful NPD process brings together the expertise of each team that contributes to the product launch:

  • Product management: Defines the vision, sets priorities, and keeps each stage aligned with customer and business goals. They typically lead cross-functional coordination and rely on engineering capacity and constraints, customer feedback, and research and usability tests to guide decisions.

  • Product marketing: Identifies the target market, documents the value proposition, and gathers customer and competitive intelligence to validate market demand. They use feedback to inform value-driven messaging and positioning.

  • Engineering and design: Turns concepts into functional, reliable prototypes and final products. Engineers focus on scalability, performance, and feasibility to solve complex technical problems that make the product work in the real world.

  • Finance: Tests pricing, models profitability, and ensures investments meet ROI expectations.

When these stakeholders stay connected and communicate, product development moves faster and is much less risky.

Why is the new product development process important?

Without a defined framework, product teams risk building what’s easiest to complete, rather than what’s truly needed. Engineers excel at solving complex technical challenges, but they’re not typically the ones gathering field data or interpreting customer sentiment.

A structured NPD process bridges the gap by connecting customer and market understanding with technical execution.

The NPD process helps teams work together to:

  • Validate ideas early: Test feasibility and demand before any significant investment of time and resources.

  • Identify and prioritize opportunities: Focus on the most valuable and solvable market problems.
    Maintain visibility: Track progress and handoffs across the development cycle.

  • Measure success: Use metrics, such as time-to-market, adoption, and ROI, to evaluate outcomes.
    Most failed products miss one or more steps along the way. Skipping validation or ignoring feedback loops leads to wasted effort and late-stage surprises that are difficult to fix when a launch date is looming.

With a transparent, evidence-driven process, teams dramatically improve their odds of building something customers will buy.

How to create a product development plan

A strong product development plan transforms the NPD process into something you can actually manage and measure. It connects strategy, execution, and results in one place—so your team knows what to do, when to do it, and how to tell if it's working.

Break the process into stages with clear ownership. Assign milestones and define success metrics for each phase: idea-to-prototype lead time, expected ROI, projected adoption rate. Use these benchmarks to decide whether to proceed or kill the project before wasting resources.

The best plans tie every milestone back to two things: customer needs and business goals. That way, you're measuring real outcomes—not just activity—and building toward genuine market fit.

Ready to get started? Use our product launch plan template to manage your NPD and go-to-market process from end to end.

The 7 stages of new product development

Follow these seven stages and you won't be crossing your fingers at launch. You'll have the data to know it'll work.

1. Idea generation

Build a robust idea pipeline by combining customer feedback, market research, and cross-functional team insights, ensuring every concept is grounded in real data and experience.

  • Start with customer problems: Analyze feedback, talk to your user group, evaluate support tickets, lost deals, and third-party reviews to uncover unmet needs.

  • Look outward: Study competitor offerings and market gaps revealed by trends or newly released technology.

  • Encourage cross-team creativity: Invite ideas from sales, customer service, QA, professional services, and operations. Focus on teams closest to customers, as they are the first to hear about the pain points.

  • Use structured brainstorming: Combine individual ideation with group sessions where you whiteboard ideas and sort, categorize, discuss, and define next steps.

  • Capture everything: Store and associate ideas with details such as source, potential audience, and feasibility in a single repository for later evaluation.Over time, this becomes your early-stage backlog—a living source of validated opportunities ready for screening and prioritization.

2. Idea screening

Not every idea in your backlog deserves development. The screening stage filters out those that don’t meet customer, technical, or business criteria. Some ideas may be too costly, off-market, or beyond your current capacity or capabilities.

  • Check business alignment: Remove ideas that don’t fit your forward-looking strategy or goals.

  • Evaluate market need: Eliminate concepts without clear customer demand or differentiation.

  • Assess feasibility: Flag ideas that exceed technical skills, budget, or timeline.

  • Estimate ROI: Prioritize ideas with measurable potential for revenue or retention.

  • Score objectively: Rank ideas on value, feasibility, and fit to reduce bias.

Use a simple scoring matrix to rate each idea, then focus resources on the few that have a strong market need and realistic paths to execution.

Example scoring matrix

Rate each idea on a 1–5 scale across every criterion (5 = strongest potential). Add up the scores to create a preliminary ranking, then review as a team—let the numbers guide the conversation, but make room for context to shape the final call.

Criteria

Question

Score (1-5)

Customer value

Does it solve a real problem?

Feasibility

Can we build it with available resources?

Market evidence

Is there evidence of demand or potential adoption?

Profit potential

Can it generate sustainable ROI?

Strategic fit

Does it align with our goals and existing products?

3. Concept development and testing

With only the strongest ideas remaining, it’s time to define the product through product concepts, visual mockups, or quick prototypes and test whether it resonates with potential customers.

  • Define the concept: Outline the problem, proposed solution, and key features.

  • Test with real users: Use interviews, surveys, or A/B tests to validate interest and expectations. Share with 5–10 target customers. Capture what excites them and where confusion arises.

  • Refine messaging: Capture how customers describe the value in their own words. This becomes language that marketing can use.

  • Capture and organize feedback: Store customer input in a central, searchable location, such as your product management tool. You can tag feedback by theme, priority, or pain point. Or, let AI do it for you.

4. Business analysis

A great concept still needs to prove it can sustain the business (and the business can sustain the idea). At this stage, evaluate the business case, potential cost, pricing, and profitability to confirm whether the idea is practical.

  • Estimate costs: Gather input from finance, engineering, and operations on development effort, human and equipment resources, manufacturing, and marketing.

  • Forecast revenue: Use customer interviews, sales and CRM data, market research, and analyst reports (from firms such as Bain, Forrester, or Gartner) to project pricing, demand, total addressable market, and adoption.

  • Model ROI: Create financial scenarios, including best case, realistic, and conservative, to disclose risk tolerance and break-even points.

  • Validate assumptions: Compare forecasts to historical product launches and customer data to spot overestimates.

5. Product development

Next, build your minimum viable product (MVP). This is where engineering and design teams turn the validated concept into a working prototype—something real that proves the product can be built and delivers value to users.

  • Build the alpha: Develop an internal prototype focused on priority functionality. Limit scope to validate performance, reliability, and integration early.

  • Test internally: Run usability and stress tests across teams to identify and resolve issues before they are exposed externally.

  • Move to beta: Release a limited version to a small group of target customers or partners, perhaps your trusted user group. Collect and document feedback on usability, performance, and satisfaction.

  • Iterate rapidly: Incorporate findings and continue short release cycles until you meet your defined product success criteria.

These early builds help with quality, fit, agility, and scalability before large-scale release.

6. Test marketing

Test the marketing strategy by presenting the nearly finished product to real customers in a controlled environment.

  • Select pilot markets: Choose representative customer segments or regions that mirror your larger audience.

  • Launch limited campaigns: Test messaging, pricing, and channels that will eventually support full go-to-market (GTM) efforts.

  • Collect behavioral data: Track adoption, usage, and conversion to uncover what drives real purchase decisions.

  • Refine the GTM strategy: Use pilot results to optimize messaging, pricing, and distribution before the main launch.

7. Commercialization

Commercialization is your full market launch—the moment your product goes from controlled testing to broad availability.

  • Activate the GTM plan: Launch campaigns, pricing, and distribution across all intended markets.
    Scale operations: Ensure manufacturing, logistics, and customer support can handle full-scale demand.

  • Monitor performance: Track key early metrics, such as adoption, satisfaction, and retention, to inform post-launch adjustments.

  • Share early feedback: Document what worked and what didn’t to improve future launches and next-generation products.

Types of new product development

Not all NPD projects are created equal. Here are the three main types, and how they differ in scope and impact.

  • Incremental innovation: Small improvements to existing products, such as new features, better performance, or refined design. Think: a smartphone with a longer battery life or a faster processor.

  • Platform innovation: Building multiple products on a shared technology foundation. Instead of starting from scratch each time, you build upon what you've already created. Think: a software company that launches new tools on top of its core platform.

  • Disruptive innovation: Creating entirely new markets or fundamentally changing how customers solve problems. Think: streaming services making cable TV obsolete.

What's the best new product development process to use?

No single framework fits every development project. The best is the one that your team will use, as it aligns with your product type, risk tolerance, and team dynamics.

  • Waterfall

Linear and sequential. Each stage—design, build, test, launch—has deliverables and happens in order with limited flexibility.

Ideal for: Hardware, manufacturing, or regulated industries where changes are costly once production starts.

  • Stage-gate

Structured checkpoints between stages to review progress and manage risk.

Ideal for: Complex products that require executive oversight, budget control, or compliance checks.

  • Agile

Iterative and customer-driven. Work happens in short sprints, allowing teams to test, learn, and adapt quickly.

Ideal for: Software, digital products, or rapidly changing markets.

  • Lean

Focused on efficiency and validated learning. Teams test assumptions early with prototypes or MVPs to confirm value before increasing investment.

Ideal for: Startups or innovation teams operating with limited resources.

Many teams combine methods to keep development moving.

Examples of new product development

Every company builds products differently, but the most successful teams, regardless of size and resources, use a structured approach that integrates research, planning, and execution to bring better products to market.

  • Intuit, the team behind QuickBooks and other global software brands, uses Airtable to unify product research and design operations across six regions in an international insights database called International Truth. Designers can now capture and share customer feedback in one place, eliminating silos, reducing duplicate studies, and connecting product decisions to business priorities. This central system connects every stage of product development, from concept to design, making it more customer-driven.

  • Frame.io unified its roadmap, user research, and customer feedback in Airtable to create a single, real-time source of truth for product planning. By consolidating input from sales, support, and social channels, the team gains real-time visibility into customer needs and connects those directly to roadmap planning and GTM coordination. The result is faster, more responsive product development that keeps teams aligned throughout the entire project.

Common pitfalls in the product development process and how to avoid them

Even with a straightforward process and a dedicated team, product development can run into problems when validation, visibility, or communication breaks down. Here are the most common pitfalls and how to avoid them.

Pitfall

How to fix it

Skipping early validation

Test assumptions with customer feedback and market data before investing in buildout.

Too many unfiltered ideas

Use structured criteria or a scoring matrix to rank ideas by customer value and feasibility.

Weak concept testing

Share prototypes with target users early to validate their appeal and functionality.

Unrealistic financial assumptions

Base forecasts on real data: customer interviews, analyst reports, and historical benchmarks.

Overbuilding the MVP

Focus on must-have features that prove value; defer “nice to haves” to later releases.

Siloed Communication

Keep research, roadmaps, and updates in a single shared workspace.

Late go-to-market planning

Start GTM discussions during ideation to ensure marketing and product teams are ready for launch.

Ignoring post-launch metrics

Monitor adoption, satisfaction, and retention to guide the next cycle of improvements.

Tips for new product development

As customers evolve, markets mature, and opportunities emerge, your product development process must adapt—these tips help teams stay focused and flexible at every stage.

  • Protect discovery time: Leave space in every cycle for unplanned research and discussion, as some of the best ideas often emerge outside formal planning.

  • Leverage the voice of your customer: Collect customer input continuously, then use tools like ProductCentral to centralize, categorize, and identify trends automatically before acting on isolated requests. This transforms raw feedback into actionable next steps for the right teams.

  • Prioritize what moves the roadmap: Align people, time, and budget around your most impactful ideas. Roadmapping software like ProductCentral provides teams with visibility into priorities, dependencies, and progress, ensuring every resource is dedicated to achieving clear roadmap outcomes.

  • Revisit assumptions: Customers change. Markets change. And, your business will change—schedule checkpoints to revalidate customer needs and product relevance.

How AI improves the new product development process

According to Bain’s Innovation Rewired report, leading innovators have shortened design-to-launch timelines by 20% or more through better AI integration into product development workflows. Even more impressive, 88% say AI has improved their innovation success rate.

AI is accelerating every stage of the product development process. It automates repetitive workflows, giving product teams valuable time back for strategic work. It analyzes thousands of feedback points in minutes to surface customer sentiment trends. It performs competitive analysis at scale and even predicts where market demand is shifting.

The real advantage? AI creates faster, data-driven learning loops that keep innovation moving with greater precision than ever before.

What are the best tools for managing the new product development process?

Because NPD is cross-functional, your tools should connect planning and progress across all teams involved in bringing a product to market. Centralize research, feedback, backlogs, and roadmaps in a single shared workspace so everyone can see priorities and dependencies.

  • Product management platforms: Connect product strategy, roadmaps, and execution in one place. Tools like ProductCentral link customer insights, prioritization, and delivery across teams.

  • Development tools: Integrate platforms like Jira or GitHub for sprint planning, issue tracking, and aligning engineering work with product priorities to ensure visibility between what's planned and what's in progress.

  • Customer feedback tools: Tools like Zendesk, Gong, or AI-powered survey platforms capture user input at scale. When integrated with a product management platform like ProductCentral, they automatically categorize and surface insights that shape your roadmap.

  • AI roadmapping tools: Help you prioritize the right features based on organizational goals and track key milestones throughout development.

  • Resource allocation tools: Visualize team capacity and align people, time, and budgets with roadmap priorities to focus on high-impact initiatives and avoid overcommitment.

  • Analytics dashboards: Track adoption, engagement, and post-launch performance to measure success. Tools like Tableau Cloud and Snowflake turn post-launch data into learnings that guide your next cycle of improvements.

  • Collaboration and documentation tools: Use shared whiteboards like Miro and messaging platforms like Slack to keep cross-functional teams communicating throughout every stage of development.

What are the key metrics to track during the new product development process?

A great new product only matters if you can measure its success. Track performance across these three areas to ensure your team is efficient, market-aligned, and focused on customer value.

  • Speed: Measure time-to-market and cycle time between stages to see how efficiently ideas move from concept to launch.

  • Customer value: Monitor adoption rates, engagement levels, and user satisfaction to verify that what you've built meets real needs.

  • Business impact: Evaluate ROI, revenue contribution, and customer retention to ensure the product creates lasting value.

Establish a baseline for each metric and review them after every major NPD stage and product launch to identify bottlenecks, adjust priorities, and catch market or process shifts early.

Streamline new product development with Airtable ProductCentral

Great products don't happen by accident—they require agile planning, prioritized feedback, real-time data, and tight cross-team coordination. The challenge is connecting all of that without losing momentum.

ProductCentral is an AI-powered platform purpose-built for product teams to connect customer insights, product strategy, and execution in one place. Capture every idea, spot patterns in minutes, map evidence to roadmap priorities, and measure impact after launch. The result: fewer misses, faster cycles, and releases that deliver real customer value.

See ProductCentral in action by booking a demo.

The ultimate framework for launching new products

Get template

New product development FAQ

The process begins with idea generation. This is where the team will collect input from customers, market research, analysts, and internal teams to identify unmet needs and new opportunities.

The final stage is commercialization, when the product is launched to the market. It includes activating GTM plans, expanding distribution across partner and channel networks, and monitoring key performance metrics, such as adoption and customer satisfaction.

There are seven core stages: idea generation, idea screening, concept development and testing, business analysis, product development, test marketing, and commercialization.

Focus on transparency and validation throughout the entire process. Establish a single source of truth for collaboration and communication. This will connect research, planning, and feedback. Review metrics after every launch to identify bottlenecks and continuously refine your process.

NPD encompasses the entire development process, from idea generation to launch, whereas product innovation focuses on the novelty or improvement itself. Innovation is the “what,” but NPD is the “how” that turns innovation into something market-ready.

Timelines vary widely by product type and circumstances. Software products can move from concept to launch in a few months, but they can encounter roadblocks at any point. In highly regulated industries, such as hardware, compliance checks and risk factors can take years to address. What matters most is maintaining momentum and validation at each stage rather than rushing to completion.

It takes time to get every team in sync, so start as early as the idea generation and business analysis stages. You’ll ensure that marketing, product, finance, and all customer-facing teams are prepared with target audience, messaging, campaigns, internal training, beta testing, and updated SKUs.

Focus on evidence-based product features. Use templates to centralize ideas, research, and progress in one workspace. This helps with communication and visibility without adding complexity.

A prototype tests form and function to validate a concept or design early in the process. An MVP is a simplified version of the product that is released to real users to measure adoption and gather feedback.

Consistent progress toward measurable outcomes, including shorter idea-to-launch cycles, fewer failed experiments, higher adoption rates, and a clear link between customer input and roadmap decisions.

About the author

Airtable's Product Teamis committed to building world-class products, and empowering world-class product builders on our platform.

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