What is customer development?

If you are starting a startup and don't have much experience in software development, you probably think:
"I know what my users need, I just need to develop it"

However, this is not the best option. From our experience, most founders release the MVP and complain that users don't use their product as they expected.

So, you might ask: "How can I start a startup? Should I spend time on research? Or should I create the product based on my opinion of the market? " Based on our own experience as a software development company and experience from many development teams, the answer is:

The best way to start a software startup is to start it by doing customer development for your potential users before you build an actual SaaS/PaaS platform.

That's why I would like to share my experience on why you should consider customer development before you start a startup.
Nikita Shevchenko
CEO at Fund Platform

What is customer development?

Many business owners are still not aware of what exactly customer development is. Generally speaking, customer development is a process of defining the customer's needs and developing a software to meet specific requirements of your customer

Customer development can be complex, i.e. to satisfy a whole process of work (employees, end clients, intermediaries, etc.), as well as to target a certain group of people, for example, workers in a company.

Customer development ensures the smooth functioning of a predefined process. Certain business tasks are strictly individual and cannot be achieved with the wholesale market software products available. Like any software product development, customer development goes through several different stages to get the final version ready for use, ensuring robust functionality.

Do my customers need custom software development?

We are living in the digital world where everything is spinning around technology and we know the power of technology. Nowadays, outsourcing of software development is at the top because lots of the business are going online. Consumers either want to get their services online.

Thus, it is one of the most important factors that a number of businesses have started their service online today and get the software according to their needs.

Online services may have various advantages to the business. Mobile app or web applications are effective ways to deliver services online and attract more customers.

Developing a software-based startup is an art and there are multiple software development companies around you that claim nobody is giving professional services like them. That is why, many business owners look for small development teams that develop custom software.

Why choose customer development

The most important advantage of custom software development against building the product first thing is an opportunity to determine the needs of your customer. Remember that people's needs change with time and the need for changes to any software is an integral part of its use.

The question of whether to take advantage of customer development or rely on market research or founder opinion is one that every startup faces in the digital economy. It is very important to understand the benefits of customer development. In this way, business owners will be able to judge for themselves whether to spend their time on customer development before starting the business or start building the actual product right away.
By doing customer development, you are able to:
1. Understand the needs of your potential customers
2. Create the code base that you can reuse later in your main project
3. Earn the experience in software development
4. Earn money instead of looking for an investor

Understand, what do your potential customers really need

Customer development offers an excellent opportunity for future synchronization with your potential customers. Many companies use a variety of applications and custom software development for them is needed to ensure trouble-free work with each application as needed. Banks, hospitals, schools, and all other businesses need at some point to pool multiple applications into one software product. This is only possible to do smoothly through custom software development.

The best relationship that you can have from your potential customers is when they give you money for developing features they need. When your potential customer gives you money to develop a feature, it means that he had researched the market and didn't find a solution he needs, so you don't even have to spend your time on market research asking your potential customers about their needs and so on.

Create the code base that you can reuse later in your main project

Customer development is typically characterized by the use of state-of-the-art technology and techniques. When considering custom software development, it is worth mentioning that the leading companies are required to use the latest technology to get new customers. This is also a great advantage of custom software development because you will keep up-to-date in the tech world.

By the time legacy software packages hit the shelves, they are already out of date. At the same time, your future product will have a huge code base and an ability to upgrade functionality with time after having the right foundation.

At Fund Platform, we first begun as a custom software development company. We have combined all the features from previous projects into a single asset management platform.

Earn the experience in software development that you can reuse in your main project

On one hand, when you offer custom development services, you become dedicated to another person's projects. Often, as business needs change, owners may want added functionality in their custom software. At such times, you will have to quickly make the changes the customer wants so that he is satisfied. This is an option that is not available for mainstream software products.

On another hand, a huge advantage here is that you get a significant amount of experience, working with more experienced business owners.

Companies that ask for custom software development services are usually big companies with many experienced employees. CTOs, team leads, product managers, developers - these are the people that you will have to hire later, and before you hire them - you have to understand what they are doing.

For example, we didn't have much experience as a mobile application software company, but after our customer asked to develop an app, we were able to reuse that experience, developing mobile applications later.

Earn money instead of looking for an investor

The initial cost of custom software development is usually higher than ready-made software products as most online marketers recommend that serious businesses benefit from individual solutions. Investing in custom software development is worthwhile for them as they already have a clear vision of the end product.

Companies that handle personal data and strictly confidential material will definitely have to rely on custom software because the security of this type of software is better than the widespread, ready-to-use software.That is why custom software development is an investment, not an expense for such companies.

At Fund Platform, we have developed custom software applications worth a few hundreds of thousands of dollars. This can be a huge help to your potential startup, as you can earn enough money to hire people that you'll need later.Customer software development methodology means that your customer understands what he needs and how much money he is ready to pay. This way, you or your software development manager can easily estimate and calculate the profit that you can gain from each project.

Concluding remarks

Doing customer development is an investment, whereas the use of ready-made software does not always meet your customer's needs and incurs additional costs and customer lag. Ultimately, the "cheap" option can wind up costing much more money down the road for them and they understand that.

Customer development is an ideal way to understand the nature of your customers' business and understand the software development life cycle. Any computation and analysis are needed, a custom-made software will make a huge difference in productivity and efficiency for your company later. This certainly helps lift one wanted burden off your back and the workflow will progress without any hassle.

Software built on customer's needs holds much more value than developing features that you are not sure about. Customer development contributes to a customer's positive perception of a business. The unquestionable fact is that using personal software solutions will make your business look much more professional and aid customer conversion.

Today's users are already very experienced with technology and will very quickly appreciate the fact that you have invested your time in customer development before you have developed a website for them.

We hope you enjoyed our article. If you are interested to read more, check out our blog!
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