Product Development Methodologies: A Guide to Choosing the Right Approach

Product Development Methodologies: A Guide To Choosing The Right Approach

Developing a product is a complex process that demands meticulous planning and execution. An incorrect approach can result in expensive mistakes and an unsuitable product outcome upon implementation. In product development, two primary factors require careful consideration. The first is selecting the appropriate methodology, and the second is diligently adhering to the chosen method. When developing a product, finding the right balance between different elements is essential. Depending on the product’s specific characteristics and the company’s objectives, there are various methodologies from which to choose.  

It is crucial to select the most appropriate approach to ensure success. When looking for a project development partner, there are many features and qualifications to consider which is essential for success. Organizations often face challenges when finding the perfect fit for their product development needs and culture. Careful consideration of methodology is crucial in achieving efficiency, quality, and success. Selecting the appropriate process is critical, as there is no one-size-fits-all approach. 

This article covers popular methodologies for product development, including T-shaped teams, squads, lean startup, design thinking, agile methodology and scrum. We also present a new approach blending multiple methods and aspects such as geographical region, development maturity and organization maturity score to find the best strategy for your organization. Additionally, we provide best practices for choosing the proper methodology for your team and ensuring successful product development. 


  • Product development methodologies 
  • Advantages and disadvantages of each methodology 
  • Choosing a development partner, measurement and an approach 
  • How the methodologies influence key performance indicators 

Product development methodologies 

Here is a review of use cases for each previously mentioned methodology: 

T-shaped teams: In the world of complex product development, T-shaped teams are a game-changer. The fusion of diverse skills and expertise is vital, particularly for projects that require a keen eye for detail. Teams needing more vertical and horizontal knowledge may face challenges in achieving optimal results. For instance, when developing a new software application, a well-equipped team of a web design company, would comprise a product manager, a designer, a software engineer, and a tester. The product will surely be exceptional when team members use their unique strengths. 

Squads are ideal for creating products that need quick iteration and feedback. This approach is beneficial for service providers. For instance, a mobile app team can rapidly build and test features. 

This method is effective because it shortens the time to market, demonstrating value quickly. However, managing idle teams within squads can become challenging if the requirements need clarification or align organizational priorities. 

The Lean Startup methodology is ideal for creating products when market demand is uncertain. For instance, a team working on a new social media platform can use this methodology to experiment with various features and pricing models to find out what appeals to users. However, it can be challenging to define the product’s value in situations where demand is uncertain. 

Design thinking is a practical approach to creating user-centered products. For instance, a team working on a medical device can use this method to gain insights into the requirements of patients and caregivers. Design thinking has become prevalent in almost all UX/UI design projects where the user experience is crucial. 

Agile methodology is a versatile, valuable approach to product and software development. Unfortunately, many organizations struggle with understanding what agile truly means and implementing the best practices associated with it. As a result, it is essential to follow a maturity curve when using this methodology, as it is not an all-or-nothing approach. 

The Scrum methodology is an agile and value-driven approach based on empiricism. This theory holds that one attains knowledge from direct experiences and observable facts. 

One scrum occurs over a set period, referred to as a sprint. Typically, the time range is two to four weeks, and the scrum begins at the start of the sprint. Each sprint’s objective is to produce an imperfect but advancing version of a product to present to stakeholders to incorporate input into the next sprint quickly.  

So, what are the pros and cons of each methodology? To clarify, we created a table of advantages and disadvantages. Note that these methods have general pros and cons; a specific methodology’s plusses and minuses vary depending on the product and the business’ size. Furthermore, include soft KPIs such as the product’s size, complexity, budget, timeline and the organization’s culture.




Agile   – Iterative and incremental development     

– Flexible and adaptable 

– Easy to learn and implement 

– Can lead to higher-quality products 

– May lead to faster time to market – Can lead to lower costs  

– Can be chaotic and challenging to manage 

– Can be difficult to scale  

– It might not be easy to get buy-in from stakeholders  

Lean Startup   – Focuses on customer feedback – Encourages experimentation

– Reduces risk of developing unsuccessful products 

– May lead to higher product-market fit  

– Can lead to faster time to market  – May lead to lower costs 

– May be time-consuming 

– It can be challenging to get stakeholder buy-in 

– Might be demanding 

Design Thinking   – Human-centered approach

– Encourages creativity and innovation 

– May lead to higher quality products 

– Can lead to better user experience 

– Has the potential to lead to stronger relationships with customers  

– Can be time-consuming 

– May get expensive 

– It is possible but may be challenging to gain support from all stakeholders  

Scrum   – Iterative and incremental development 

– Focuses on collaboration and teamwork 

– Easy to learn and implement 

– May lead to higher quality products 

– Can lead to faster time to market 

– Possible to lower costs  

– Can be difficult to scale  

Choosing an approach and a partner 

When deciding on an approach for product development, evaluating each methodology’s use cases, benefits and drawbacks are important. Furthermore, it is also essential to recognize that there is no universal solution. 

Achieving success in the context of an agile model requires setting benchmarks and KPIs that go beyond standard measures. Measuring the speed of adapting to changing requirements is crucial since conditions can have a significant impact. 

When choosing a partner, opting for a blended methodology is ideal. This approach combines various strengths and includes measures to lessen risks, resulting in a personalized plan that aligns with your organization’s requirements and values. 

As product development and improvement continue, understand what is required for success. Key performance indicators (KPIs) are specific metrics that can help you measure and evaluate your progress. By using KPIs, you can gain valuable insights into the effectiveness of your product development efforts and make data-driven decisions to improve your product. 

KPIs include customer acquisition cost, lifetime value, conversion rate, and retention rate. Tracking these metrics over time helps identify areas where your product is succeeding and areas where it needs improvement. KPIs can also help you set realistic goals and measure your progress. 

Ultimately, using KPIs to measure your product development success can ensure that you are making informed decisions and taking action to help your product succeed in the market. 

  • ROI, or return on investment, is a financial metric that measures the benefit of investing in product development. A desirable ROI is usually 100% or greater. 
  • The customer acquisition cost (CAC) refers to the average amount spent to acquire a new customer for a particular product. A desirable CAC is usually below $50. 
  • Customer lifetime value (CLTV) determines a company’s success. It represents a customer’s total revenue for a business throughout their lifetime. A high CLTV indicates a loyal customer base and a strong brand reputation. Typically, a good CLTV stands at about $100 or higher. By analyzing CLTV, businesses can gain valuable insights into customer behavior and preferences. The CLTV offers practical insights to inform marketing strategies and improve customer satisfaction. 
  • Customer satisfaction is crucial; the Customer Satisfaction Score (CSAT) is the best tool. Customers’ positive reception of your product achieves a score of 80% or higher. By utilizing this powerful tool, you can gain valuable insights into your customers’ experiences and make strategic decisions that will ultimately lead to increased success for your business. 
  • A customer retention rate is a metric used to determine the percentage of customers who continue to use a product or service after their initial purchase. A reasonable customer retention rate is about 70% or higher. 
  • A high maturity score indicates that the market is ready for the product and has a strong demand for it. It also suggests that the organization has the necessary resources and expertise to manage the product throughout its life cycle successfully. It is encouraging to learn that your company has successfully implemented a tool that has received positive customer feedback and is meeting their needs. A maturity score tool provides valuable insights into customer experiences, which help make informed and strategic decisions that ultimately drive business success.  
  • The customer retention rate measures the percentage of customers who continue to use a product or service after their initial purchase. Maintaining a retention rate of 70% or higher is widely considered a benchmark for good customer retention and indicates sustained value delivery to customers over time. Using a customer retention rate can help you understand how many customers return to your product or service. A 70% or higher customer retention rate allows you to make informed decisions that will increase your business’s success by meeting customers’ needs. 
  • The skills matrix is a critical criterion. If the internal and external teams are not skill-matched to the product development methodology’s needs, there will be many problems throughout the journey.  
  • Value mapping: Every feature should add value. Being able to measure is challenging but possible. Value mapping requires due diligence during the planning phases. 
  • Delay of value is one of the best ways to prioritize development. To improve your business’s success, ensure your teams have the necessary skills for product development. During planning, prioritize features that add value and consider delay value to help prioritize development (, 2023). 

By tracking some of these KPIs, you can better understand how your product development efforts are performing and identify areas where you need to improve.  

How methodologies affect KPIs 

Here are examples of the methodology-KPI relationship: 

  • Lean startup helps product development and improves ROI. For example, suppose a company uses Lean Startup to develop a new product. In that case, they can test their ideas with customers early and often to get feedback and make changes before they invest a lot of time and money into development.  
  • Design thinking can help develop products beneficial to users. Product usefulness leads to improved CAC and CLV. For example, suppose a company uses design thinking to create a new product. In that case, the design team focuses on understanding the target customers’ needs and designing a product that meets those needs. Furthermore, design thinking helps ensure that the product is appealing to customers and that they are willing to pay for it.  
  • Agile can help improve product quality, leading to improved CSAT and customer retention rates. For example, if a company uses agile to develop a new product, it will work in short sprints and get customer feedback early and often. The process can help ensure the product is high quality and meets customers’ needs.  
  • Scrum can help improve product development efficiency, lowering development costs. If a company uses the scrum method, the team breaks the project into smaller tasks and completes them in short sprints. Scrum and sprints help ensure the project controls costs and stays on track. 

Here are some of the reasons why agile and lean startups are so popular:  

They are both iterative and incremental methodologies, which means that they require short-cycle product development. Development requires incorporating user feedback into each development cycle. This helps to ensure that products are in line with users’ needs and are more likely to be successful.  

Both are flexible and adaptable methodologies, which means they can adapt to the specific needs of a product or company, making them a good choice for new product development or improving existing outcomes.  

Moreover, agile and lean startup are relatively easy to learn and implement, making them a good choice for companies with limited product development experience.  

Stefanini Delivers

Stefanini is a leading product development partner for custom applications. We understand the importance of selecting an appropriate development methodology. Our development teams recognize that each organization has unique needs and cultures, so there is no one-size-fits-all approach to product development.  

Our company boasts 35 years of global experience and offers a comprehensive portfolio of solutions. We blend cutting-edge consulting, marketing, mobility, personalized campaigns, and AI services with standard solutions like service desk, field service and outsourcing (BPO). Our company brings a human-centered approach to our technical prowess because we understand that people create innovation, not technology.  

About Sandy Sankara: Sandy is an engineering, echnology and business strategy executive with extensive experience in building innovative technology solutions using cutting edge technologies and architecture principles of SAP, APPS, Supply Chain Management, dev ops, cloud, master data Management, AMS and artificial intelligence.  He ha over 17 years of experience with diversified software development experience across multiple verticals with an exceptional track record of successfully leading high-performing delivery practices globally for rapid ROI development for complex cross-functional programs. 


Project Management Institute. (2023). Cost of delay – Project Management Institute. Project Management Institute.  

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