It's Not What You Think
Many people think of product development as an exercise in scientific research. They think of laboratories, crash test dummies, test tubes and scientists in lab coats. This is a misconception: science and engineering are only a small part of product development.
Product development is really focused on creating solutions that customers want at prices that are attractive to an organization. Figuring out what product benefits are important to end users or consumers and how much they are willing to pay for them is the main focus of product development. The science and technology needed to develop those products is almost an afterthought.
There are exceptions where scientific research and engineering come first and take priority. Many new ventures champion a new technology and try to apply it to existing problems. However, most companies and products do not operate this way.
Pharmaceutical discovery and development may seem to be driven by science and not by marketing, but this is actually a misconception. Big pharmaceutical companies will abandon testing and clinical trials if it becomes apparent that customers would not be willing to use a drug. One common issue that results in abandonment is how well a drug candidate functions as a pill. If other delivery methods are required, pharmaceutical companies will often abandon new drug candidates. For example, there is not much of a market for drugs that need to be injected by needle multiple times a day.
Many people think of Apple's iPod and iPhone products as being driven by new technologies. They are not. In fact, the iPod merely combines flash memory with digital music formats and headphones. None of these technologies were new. The iPod itself was a new way to serve consumers who want to enjoy music on the go. The product was successful because it met this need with more benefits than other products on the market at a price they found acceptable. It was not successful because of technological innovation.
Learn What Your Customer Wants
Every product needs to be designed to serve a function that your customer wants. While it can be debated that even needs ultimately come down to wants, the point is that people need to desire what you are attempting to sell. If there is no demand for your product, it is going to fail and this could be the death of your business. Regardless of what your product may be or what it does, it has to be created as a direct response to the will of your clients and must fill their needs in some way.
How can you know what features your future clients would desperately want? You can ask them!
The funny thing about product development is that it is simultaneously easy and hard. Whenever possible, gauge what your customers want by simply asking them. Bring them prototypes or mock-ups of what you are planning to do. Take them to lunch and ask them what their pain points are. You may even be able to follow them around work and learn about their routines so that you can better design your product to meet their needs and lifestyles. Contact with customers is key.
As a last resort, you can make decisions based on more vague research, such as survey data or complaints about similar products and even your personal experience with such things.
As an entrepreneur, you have to constantly be ready to be surprised by a reality check that throws your old assumptions out the window and forces you to develop new ideas on short notice.
Rush to Market
Once you have investigated what features customers want and are willing to pay for, you should try to get your product to market quickly. If you are not comfortable selling an early version, give it away for free as a test to select customers. As a condition of this free trial, require that your customers give feedback about the product and demonstrate to you how they use it.
This strategy will collect real-world data on how your product succeeds and fails to satisfy customers. This information is much better than market research or performance testing by the new venture.
Continue to make improvements to your product over time guided by customer feedback and performance in the field.