Market Based Product Development vs. Custom Software Development

Market Based Product Development vs. Custom Software Development

Making a decision about what exactly your business is can sometimes be a complicated thing; but, it is important to know what kind of business you are really in.  In general, new product development is said to involve two different concepts. Here we have the two examples: market based product development houses and custom software development houses.  What are the differences? Can you be both?

The bottom line is that no –you can’t do both.  This is all the more reason to define your business and what it is you really do.

Market Based Product Development House

This is a business that is creating a market driven product.  This is sometimes called a “seeds concept”.  In other words, the product development is conceived based on a company's own technology and competence. You are building a product first and then saying, “What is my competition doing? Oh, I need to do that in my software as well.”  You’re then asking yourself, “What are my customers saying? Oh, I need to do that too.” You are writing code based on what the market is telling you to do, but it’s code that you’ve written based on your own technology and competence.

Custom Software Development House

This business builds software for money.  This is sometimes called a "needs concept".  In other words, the product development is based on the needs and expectations of the market and customers.  A customer will come in saying that it would be really great if they had software like X, please write me software to develop that.  You are writing code to satisfy that idea.  You are working for hire; you are writing code for dollars.

So, what kind of business are you really in?

Because you can’t be both, you have to compare and contrast the two styles and decide.  Are you one or the other?  What is your business going to be when it grows up?

What do you think about these two different approaches to development? How does your company define itself?  Do you agree or disagree that you can’t be both? Why? Comment below!

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  • 25 February 2016
  • Author: James Nagy
  • Number of views: 959
James Nagy

James NagyJames Nagy

Need a consultant today? How can I help? As Co-Founder and Managing Partner of J&S Tech Designs I have nearly three decades of experience and expertise to share with you to help your business, product, or idea thrive. If you like this article, please sign up in the “stay informed” section!

Other posts by James Nagy

Full biography

Full biography

James Nagy is managing partner and co-founder of J&S Tech Designs - a business consulting organization that specializes in providing software and website design, development, and management expertise to organizations. He is also Managing Director and one of four co-founders of Sprocket Websites, Inc. and Chief Executive Office and one of four co-founding members of Clinical Collaboration Software, LLC.

James has over twenty-five years of experience in the information technology field, spending twenty years in software development, sixteen years in executive management and the last six years as a serial entrepreneur launching and running several successful technology organizations.

Throughout his career he has led companies, divisions, departments and teams to successful outcomes. He has executed process reengineering within organizations that were struggling to produce. He has provided strategic vision and organization planning in situations that needed direction. He has built complex systems in several unique marketplaces that required thorough knowledge and expertise to be successful. It is his passion for excellence and desire for success that has enabled him to meet the challenges presented and continue to exceed expectations.

James’ passion for delivering innovative solutions and creative strategies enabled him to develop strong business foundations for long-term success. He is an active member of the Conejo Valley Chamber of Commerce, the North of the River Chamber of Commerce and the Naperville Area Chamber of Commerce where he served on several teams, advisory committees, and legislative groups. He is a founding member of the Chicago Area DotNetNuke Users Group that has held several large, successful Website design and development events. James has donated time, money and expertise to many volunteer, fundraising and charitable organizations like KidsMatter of Naperville, The Naperville Film Festival, Summer Place Theatre, TEDxNaperville, Neuqua Valley High School Senior Spectacular and many others.

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