Digital Product Development 101

Brian Bojan Dordevic
About The Author

Brian Decoded

President at Alpha Efficiency

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As our world turns more digital with each passing day, it is becoming increasingly hard to imagine our lives without smartphones and gadgets. From shopping and business to communication and navigation, they put the world in the palm of our hands. While the growth of technology accelerates, the process of digital asset development becomes global, faster, and more reliable. Companies surpass state and continent borders from day one, making the internet and mobile apps the cornerstone of their business aspirations. 

digital product development

Whether you are a startup company looking to launch a new service or an entrepreneur aiming to fix a burning problem in your company, the chances are that digital product development is the solution you are searching for. In today’s article, our digital marketing agency will help you address this problem as we guide you through all the stages of digital product development. Hopefully, by the end of this article, we will entice you to figure out some of the most profitable digital products to sell. That’s the hard part, and we can help, but once you overcome that challenge, you are sure to make your first online sale in no time.

What is a digital product, and how does it differ from a digital good?

Though all downloadable assets (ebooks, video and audio content, photos, graphics, etc.) are without a doubt digital products, eCommerce categorizes them as digital goods due to the value they deliver. Here is how to easily differentiate these terms:

Digital products are code-based assets that deliver a particular interactive value proposition to the end-user. Here are some of the examples of digital products:

  • Web apps
  • Mobile apps
  • Desktop apps
  • Digital dashboards
  • Controller apps

Digital goods are intangible items made in digital form, though some may also be implemented in physical form, without user-interactive components. Here are some of the examples of digital goods:

  • Ebooks
  • Ringtones
  • Wallpapers
  • Video tutorials
  • Mockup images

Digital product development

There are two cycles included in every product development, the high-level cycle and the low-level cycle. While the high-level cycle is mostly the same for every product development, the low-level cycle depends on the development approach one chooses. First, we will discuss the major stages of the high-level product development cycle, then move on to the low-level cycle and explain some of the most popular development approaches or methodologies.

The high-level cycle

This workflow consists of three major stages:

  • Ideation
  • Design and development
  • Growth


Everything starts with an idea. However, you may be surprised to find out that only 10% of digital product ideas actually end up being successful products that deliver value to their users. This is why this stage of digital product development is all the more important. The ideation phase is all about identifying the problem and figuring out a solution, and this is where the feasibility of your future digital product comes into question. To successfully go through this phase, you need to have:

  • Vision – Vision acts as your motivation to develop a product. An effective vision is focused on the potential of a digital product and your long-term intentions.
  • Strategy – Product strategy is the implementation plan that serves as a blueprint to put the vision into effect. It includes a step-by-step plan that your team must follow, including precisely defined goals, success metrics, value proposition, competitive analysis, etc. While inspiration is what drives you forward, you mustn’t rely solely on it. You must rely on essential data as a tried and true way to keep the wheel in motion.
  • Research and market analysis – This is one of the most important stages in digital product development. In this stage, your team needs to process the data gathered and estimate whether your idea can lead to a successful product. It usually includes:
    • Researching the market to outline the target audience
    • Analyzing all the strengths and weaknesses of your competitors
    • Estimating product-market fit

These are only some of the relevant analytics for your team to take into consideration. The main goal of this stage comes down to fine-tuning your digital product strategy so it would fit market needs and expectations.

  • Budget – You need to allocate your budget and estimate both short-term and long-term costs.
  • Value proposition – At this stage, you need to put yourself in the end-user’s shoes and evaluate all the possible benefits and drawbacks of your product. In other words, you need to check the validity of your digital product and see if it meets the functionalities and features required by your target audience.
  • Proof of concept (PoC) – This is the stage where you test the feasibility of a design concept. Whether you assign PoC to the pre-development stage or the phase of wireframing or prototyping like some experts do, the point is to determine whether your digital product can be built. Once you successfully finish this stage, you can move on to engineering.

Design and development

After the ideation stage is completed, you are ready to shift your focus to design and development. This is where you finally get to see your idea materialize. 

  • Prototype – The prototyping stage helps you get a better picture of how to build your digital product. Your prototype will have a basic design and limited functionality, or even no functionality whatsoever since it is your first attempt to visually introduce the user interface and user experience. The main goal of the prototype you create is to attract potential investors and get feedback from early adopters.
  • Pilot testing – Pilot testing serves to refine the product before it reaches the phase of beta testing. Here you get to estimate how developed the product actually is and see if any urgent tweaks are necessary.
  • Alpha/beta release – Alpha is your first working prototype created only for internal testing of its functionality and design. Once your team does all the testing, you issue a beta release which is usually available for the public. The goal of the beta release is to collect data on user experience. Both of these releases aim to create a bug-free digital product ready for mass development.
  • MVP – The minimum viable product is a stage of advanced digital product development. This phase is crucial for idea validation since it lets you evaluate the data collected from various users and learn from their feedback. Your MVP can be anything from a simple idea visualization to a working prototype, depending on the approach .
  • QA testing – Quality assurance testing aims to correct defects and bugs on your digital product. In other words, this is where you and your team put the finishing touches and refine the quality of the product.


  • Go-to-market – The fact that your digital product development process has come this far shows that there is a lot of work behind it. Though by now your digital product is ready for launch, bear in mind that there is still a ton of work to be done. The first thing that awaits is determining a pre-launch strategy, which may include:
    • Product teaser or a landing page
    • Social media campaign
    • Email marketing campaign
    • Influencer campaign
    • Guest posting
    • Pre-release reviews
    • Miscellaneous promotion campaigns

Through research and market analysis over at the ideation stage, you’ve already outlined your target audience. Now, it is time to reach out to your leads and present your digital product. In order to do this, you need to put a sound marketing plan in place, which may consist of:

    • Website
    • Social media content
    • Advertising
    • Email marketing
    • Influencer campaign
    • Referrals
  • Ongoing development – As the name suggests, once you have launched your digital product, you need to continue its development to keep up with the times and meet all the needs and wants of your audience. During this phase, you are constantly improving the user experience, which ensures product growth. The main characteristics of this phase are:
    • Customer support
    • Regular updates
    • Building new features
    • Sustainable product engineering
  • Product evolution – As your product continues its life in the digital world, it needs to evolve over time to adapt to a constantly changing environment of both the digital and physical world. This evolution is usually in terms of:
    • Security
    • Quality
    • Performance
    • Pricing

The low-level cycle

The high-level cycle we have introduced may not look all the same for every product owner. The developers often adjust it according to the approach or methodology (the low-level cycle) their project is based on. The following are some of the most popular methodologies.

Waterfall or traditional development

This is one of the first approaches ever implemented, and it offers a logistical and linear development life-cycle model. The name waterfall suggests the top-to-bottom progress. This approach consists of:

  • Conception
  • Analysis
  • Design
  • Implementation
  • Testing
  • Deployment
  • Maintenance

The Waterfall approach is popular among large companies with big budgets as well as strict requirements for documentation, tech stack, and timeline.

Agile development

The main feature of this type of digital product development is a rapid and flexible response to change. Here, the development cycle is usually split into short time slots called iterations. These iterations are made for each task at hand so different teams could have parallel progress, which significantly reduces time costs. Here is what Agile development includes:

  • Concept
  • Inception
  • Iteration
  • Release
  • Production
  • Retirement

Face-to-face communication is one of the crucial components of Agile development, while the role of documentation is significantly smaller compared to other approaches.

Scrum development

This approach is mainly used for building complex products with changeable requirements. The workflow is divided into sprints. Sprints are usually periods of two to four weeks, and each of them consists of a complete life cycle:

  • Initiation
  • Planning
  • Implementation
  • Retrospective
  • Release

This is one of the most flexible approaches in digital product development, which implements verbal communication and an empirical way of thinking. Workers are encouraged to respond to the challenge at hand with agility rather than try to understand the problem entirely.

Lean development

This approach is the digital counterpart of Toyota’s lean manufacturing practices. Its main characteristics are fast product delivery and quality-centered progress. Lean development methodology consists of the following:

  • Ideation
  • Exploration
  • Validation
  • Growth
  • Sustaining
  • Retire

Feature-driven development (FDD)

FDD is a derivative of Agile development methodology. It is mainly used by companies shifting from a phase-based to an iterative approach. Feature-driven development is oriented towards design and is suitable for digital products that require constant updates. The project is divided into small pieces called features, with the entire process cycle looking like this:

  • Overall model development
  • Features list
  • Planning and prioritization
  • Design
  • Implementation

While small projects are unlikely to benefit from feature-driven development methodology, large ones are bound to enjoy rapid development and successful evolution.

Rapid application development

Prototyping is the cornerstone of the Rapid application development cycle. Since time expenses increase due to thorough planning, this method rests on using focus groups for gathering requirements, user design testing, and reusing different software components, among other approaches. Therefore, team communication sync is a must. RAD’s life cycle looks like this:

  • Requirements planning
  • User design
  • Development
  • Cutover

Developers also use object-oriented programming languages like Python, Ruby, and Java to help implement this approach.

Hybrid approach

The Hybrid approach is a combination of Waterfall and Agile techniques. This approach emerged in a recent couple of years, and it allows you to tailor your methodology to suit the specific requirements of your project. The Hybrid approach requires independent teams that you merge into a common environment. As we have already outlined, the Waterfall technique focuses on upfront planning while the Agile technique is all about progressive planning. This is why the level of dependencies between these two teams defines the synchronization of releases.

Digital twins

We believe this approach will become the next big thing in digital product development in a few years. Digital twins methodology rests on making digital representations of actual products. Thanks to these digital counterparts, companies can test and improve their products without creating physical prototypes. This way, they can understand, predict, and optimize performance in advance. There are three main components of this methodology:

  • A data model
  • A set of algorithms or analytics
  • Knowledge

Though today this methodology is mainly used by large companies. However, as digital product development evolves, it is expected to become more accessible for smaller companies too.

Final thoughts

When it comes to digital product development, this goes without saying, but we have to say it – There is no one-size-fits-all solution. Companies worldwide use blends of different technologies and even further adjust them to suit the specific needs of every digital product as well as the working habits of their employees. That’s why we advise you to make the best out of different approaches. Whatever you pick out of this bowl, the most important thing to have is a tech background, strategic thinking, and a can-do attitude.


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