What is software product development? All you need to know

The software product market is an absolutely massive market.

It’s expected to grow to an incredible $2.5 trillion by 2028.

But, what exactly is software product development? And how can you develop a software product?

We’ll discuss that (and more) in this article, so if you decide to build a software product, you can nail it.

Let’s dive in!

What is software product development?

Software product development is the process of building software that’s intended to be sold and marketed to customers.

It includes all activities usually done when building software, from requirements gathering to deployment, testing, and maintenance.

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But, it’s not the same exact thing as software development.

Developing a software product means that you also need to do:

• Marketing
• Customer support
• Market research
• Product strategy and planning

So, it’s not just developing software – it’s building a product that can be successful in the market.

Now that we’ve defined it, let’s talk about the benefits of software product development.

Benefits of software product development

Some of the top benefits of developing a software product are:

• Cost-effectiveness
• Global reach
• Scalability and flexibility

Let’s cover them in more detail.

Cost-effectiveness

Cost-effectiveness, when compared to physical products, is one of the main benefits of developing a software product.

With a software product, you don’t need a factory or complicated machinery.

You can even build it from the comfort of your own home.

Of course, a number of different factors will influence the cost of your software product, like:

• The platform (mobile/web/desktop)
• Complexity of the product
• The tech stack
• The team building it

But, on the whole, it’s still more cost-effective than designing and manufacturing a physical product.

That’s because you can build a software product much more quickly – especially if you decide to build a minimum viable product (MVP).

And nowadays, you can use no-code app builders like Bubble or Glide to quickly build simple software products and get them to market in days.

source: UI Bakery

And that’s not something you can do with a physical product.

Now, building a software product with lots of complex features will take time and a substantial investment.

But, if you do it right, you can recoup your initial investment and then some.

Global reach

Another major advantage of software product development is the global reach your product has from the start.

With a software product, you have the world at your fingertips.

In 2024, the number of people using the Internet reached 5.35 billion i.e. 66.2% of the global population.

source: Marketing4Ecommerce

And that number will keep growing in the coming years.

This means that you can target a much bigger market than with a physical product – everyone who uses the internet.

A great example of this in action is ChatGPT – It reached a million active users in just 5 days:

source: Digital Information World

Of course, you’ll end up targeting a smaller user segment with your product.

Even then, your user base will be spread all over the world and you’ll have a much easier time breaking into competitive markets.

And that’s why developing a software product is a good idea.

Scalability and flexibility

Scalability is one of the top reasons why you should develop a software product.

It’s also one of the main reasons why software products can grow so rapidly.

But, what exactly is scalability?

Scalability is the ability of a software product to handle increased loads without compromising performance.

A scalable product can handle a massive increase in users, which is good for business growth, without sacrificing quality.

And it’s not even that expensive if you’re using cloud-based solutions – most cloud providers operate on a pay-as-you-go model.

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So, you end up paying only for the resources you use, and in return, your product can efficiently handle growth in user numbers and data volumes.

And that’s a great trade.

Another benefit of developing a software product is their flexibility.

If your initial idea isn’t validated, you can much more easily pivot to another idea if you’re building a software product.

You can also quickly adapt your product to changing market conditions and technological advancements.

This flexibility also encourages innovation and frequent experimentation, so you can continuously improve your product.

And you just can’t beat that.

Types of software products

Here’s a brief overview of the types of software products you can build:

• System software – system software manages the hardware and core systems of a computer. Examples of system software are operating systems, firmware and device drivers
• Application software – the most common type of software product, from simple mobile apps to web browsers, application software is designed to help users perform specific tasks
• Enterprise software – software products designed to fulfill the needs of organizations, enterprise software includes CRM systems like Salesforce and ERP systems like SAP
• Cloud software – software products hosted on remote servers and accessed through the internet, like Google Workspace and AWS
• Database software – database software refers to software products used to create and manipulate structured data, like Oracle Database 
• Software development tools – software products used to develop, debug, and maintain other software applications, from integrated development environments (IDEs) like Eclipse to frameworks like Angular
• Embedded software – software embedded in hardware devices like smart TVs and industrial machinery, used to control device functions and features
• Security software – software products designed to protect data and systems from malicious attacks, like antiviruses

Let’s now discuss some of the tools you’ll need to develop your software product.

Top software product development tools

Some of the top tools you should use during software product development are:

• Android Studio – the official IDE for Android, Android Studio is the best all-in-one tool for Android app development
• Bitbucket – Bitbucket is a cloud-based version control system with a built-in CI/CD pipeline, designed for business and enterprise use
• Figma – a collaborative design tool, Figma is widely used for user interface (UI) and user experience (UX) design
• Jira – Jira is one of the most popular project management tools and it’s especially useful if you use Agile development methodologies
• Node.js – A Javascript-based cross-platform runtime environment, Node.js is a good choice to build your software product’s back-end
• Postman – Postman is a popular API development tool and allows your team to collaboratively create, share, test, and document APIs
• Selenium – Selenium is a popular open-source web testing automation framework you can use to automate your product’s testing
• Shake – Shake is an innovative bug and crash reporting tool with real-time crash reporting, so you can immediately fix any issues
• Visual Studio Code – Visual Studio Code is an open-source code editor developed by Microsoft, known for its versatility and a huge library of extensions
• Xcode – Apple’s official IDE used to build iOS, macOS, tvOS, and watchOS apps, you’ll be using it if you want to build a native app on an Apple platform

Now, let’s talk about how you can use these tools to build your product.

How to develop a software product

Here, we’ll discuss the steps you need to take to develop a software product:

• Validate your idea first
• Create a software requirements specification
• Choose the right tech stack
• Design your product
• Develop your product
• Rigorously test your product
• Launch and iterate on your product

We’ll also give you key tips for each step.

Let’s go!

Validate your idea first

Developing a software product isn’t just about building a good product – it’s about building the right product.

Your product also needs to meet the needs of your market and users.

According to a CB Insights report, having no market need is one of the top reasons why startups fail:

source: CB Insights

So, you need to validate your idea first.

It’s a crucial step in your product’s development and will maximize its chances of success.

But, how can you validate your software product idea?

The best way is to do product discovery first.

With product discovery, you can set a strong foundation for your product before you even start developing it.

During discovery, you will do:

• Competitive analysis
• Market research
• Testing and idea validation
• User research

This will help you get a product-market fit and nail your product’s positioning.

While we’re on the subject, here’s what Resonate’s founder, Davor Culjak, has to say about achieving product-market fit.

You’ll also get a feel of what your users need and how your product can successfully meet their needs.

And that’s how you build a successful software product.

Key tips for validating your idea

Create a software requirements specification

Every building needs to have a blueprint before you build it.

Likewise, every software product needs a software requirements specification (SRS) document before you develop it.

The SRS will guide your product’s development from start to finish and help you keep it on track.

But, what does an SRS look like? And what should it cover?

Here’s an example of what a typical SRS looks like:

Of course, your SRS might look a bit different because every product’s development is unique.

But, there’s two main things it should cover – your product’s functional and non-functional requirements.

Functional requirements cover what your app does and non-functional requirements cover how it does it.

Here’s a detailed breakdown of both:

Simply put, functional requirements cover everything your product should do when users interact with it i.e. all of its features and functionalities.

And non-functional requirements are focused on performance and security metrics i.e. they cover how it does those things.

But, why exactly is writing an SRS so important?

There’s a very simple reason – it will help you keep your whole development team on the same page.

That will help you make a clear development timeline and avoid scope creep.

And this will help you build a better software product.

Key tips for creating an SRS

Choose the right tech stack

Your engineering team needs to have the right tools to develop a successful software product.

That’s why picking the right tech stack is so important.

And the choice doesn’t just impact your product’s development, it also impacts its future growth and adaptability.

But, what is a tech stack, anyway? 

A tech stack is the set of technologies you use to develop your software product.

Think of it like a toolkit your team will use to build your product – and they should have the best tools for the job.

Here’s a typical web app tech stack:

source: Aha!

So, how do you make the right choice when picking a tech stack for your product?

The first thing you need to consider is your product’s platform:

• Mobile
• Web
• Desktop

Your product will need a much different tech stack, depending on the platform.

But, that’s just the start.

Some other factors you need to consider are:

• The project scope
• Your team’s expertise
• Your product’s requirements

You should especially take into account your team’s expertise.

If you pick tools and technologies they’re familiar with, they’ll be able to build your product faster.

And getting to market quickly can mean the difference between success and failure.

Key tips for choosing the right tech stack

Design your product

Your software product’s design can make or break your product.

A good design will help you build a more usable product with a great user experience (UX).

And investing in UX is one of the best decisions you can make because, for every $1 you invest, you get $100 in return – that’s an ROI of 9,900%!

source: UX Collective

So, UX design is key to your product’s success – but, what should your design process look like?

Usually, it’s done in 5 stages:

• User research
• Wireframing
• Making a mockup
• Prototyping
• Usability testing

User research is the first and most important step that will guide the rest of your design process.

You’ll get a clear understanding of your users’ needs, so you can create a design that meets those needs.

Your next step is wireframing your product.

A wireframe is an initial sketch of your product’s key user interface (UI) elements.

It can even be a rough, hand-drawn sketch:

Wireframing is a great way to quickly test out design concepts and ideas without investing a lot of resources.

Next, you should build a mockup.

A mockup is a static representation of what your product’s final design will look like.

Once you have feedback on your mockup, you’ll need to build a prototype.

It’s an interactive design validation tool you can use to test your product’s usability.

Here’s what a high-fidelity prototype looks like:

source: App Design

And you need it for the last step, usability testing.

During usability testing, your users test out your product’s design and UX and it helps you catch any design issues before development starts.

And once it’s done, you can start developing your software product.

Key tips for designing your product

Develop your product

This step is where your software product comes to life.

Your engineers will take your requirements and design and turn them into a working software product.

Of course, it’s a given that you need to do this right if you want your product to be successful.

But, how can you do that?

For starters, make sure your team follows coding best practices like:

• Building a CI/CD pipeline
• Having frequent code reviews
• Writing clean, maintainable code
• Using version control
• Writing detailed code documentation

All of these best practices will ensure your team is working efficiently and writes quality code.

On top of that, you’ll lower the risk of major bugs derailing your product’s development.

Also, you need to pick the right development methodology, like Scrum or Kanban.

Scrum is the most popular methodology with 81% of Agile teams using Scrum and Scrum hybrids.

Scrum’s main advantage is that it divides your development cycle into smaller (2-4 week long) iterations called sprints.

Each sprint is like a mini development cycle and this approach helps your team work and iterate quickly and efficiently.

And that’s exactly what you should be aiming for.

Key tips for developing your product

Rigorously test your product

Excellent quality should be non-negotiable.

That’s why you need to rigorously test your software product before you launch it.

Think about this statistic – 67% of users churn because of bad experiences when using a product.

So, having rigorous quality assurance (QA) and testing protocols is an absolute must if you want to prevent that.

And you’ll get plenty of other benefits from testing, too:

But, how do you make sure your testing is up to par?

For starters, you need a detailed testing strategy.

A well-made testing strategy will help your QA team be more efficient and improve how they work on your product.

Also, they should use a number of different testing methods like:

• Unit testing
• Integration testing
• Performance testing
• Regression testing

We’ve barely scratched the surface – there are dozens of other testing metrics they should track.

And this will ensure your product is ready for launch.

Key tips for testing your product

Launch and iterate on your product

The launch is the do-or-die moment for your software product.

You need to make sure it goes smoothly, or you could ruin your product’s chances of success.

For a successful launch, you’ll need a detailed launch plan.

Here’s an overview of how you create one:

source: Smartsheet

A detailed plan will reduce the risk of major issues derailing the launch and help your entire team prepare properly.

But, the launch is just the beginning.

You already need to be thinking about your product’s future – and that means being prepared to iterate on your product.

And the easiest way to do that is continuous product discovery.

Teresa Torres, author of Discovery Habits, defined it like this:

With continuous discovery, you’ll stay on top of your users’ needs and market trends.

Also, any features and updates you plan will be exactly what your users want.

And that’s how you build a successful product.

Key tips for launching and iterating on your product

Software product development: FAQs

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