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!