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How does product development differ between established businesses and startups?

Derwin McNellis

Well, in my opinion, product development definitely differs between established businesses and startups. When it comes to established businesses, they usually have more resources and experience to invest in the development process. They already have a well-defined brand and customer base, which gives them an advantage over startups. They also have a better understanding of the market they operate in, and the trends that are shaping it.

On the other hand, startups are usually more agile and innovative. They have less resources, but they have more flexibility and a higher risk tolerance. Startups have the advantage of being able to pivot quickly, if necessary, as they are constantly experimenting and learning. They also have the advantage of being able to test and validate their assumptions with real customers, which is something that established businesses may struggle with.

When it comes to statistics, there is a lot of evidence to support the fact that startups tend to be more innovative than established businesses. According to a study by McKinsey, for example, more than half of the companies on the Fortune 500 list in 2000 had disappeared or fallen off the list by 2015, largely due to the disruption caused by new, innovative startups. Another study by CB Insights showed that 70% of startups fail in their first year, while only 10% of established businesses fail.

However, it’s important to note that there are also successful examples of established businesses that have managed to stay innovative and competitive, such as Amazon and Google. These companies have invested heavily in innovation and been able to maintain a startup mentality, while still benefiting from their size and scale.

In terms of the actual product development process, the differences can be seen in a number of areas. For example, established businesses may have more formalized processes and procedures for product development, which can sometimes slow down the process. They may also be more risk-averse, as they have more to lose in case of failure.

Startups, on the other hand, may employ more agile and iterative approaches to product development, such as Lean Startup methodology. They may also be more willing to take risks, as they have less to lose. However, this can also result in a less structured and less consistent approach to product development.

Overall, both established businesses and startups have their advantages and disadvantages when it comes to product development. The key is to find the right balance between agility and innovation on one hand, and structure and experience on the other hand. This can be challenging, but it’s essential for any business that wants to stay competitive and succeed in today’s fast-paced marketplace.