The First Steps in Creating a Digital Product

Introduction

Hello, readers! My name is Gil, and I’m the co-founder and CTO of Simpli, a Software House with over 10 years of experience in software development. Over the years, I’ve had the opportunity to engage with many businesses, studying and understanding what works and what doesn’t. In this article, I’d like to share some of what I’ve learned.

This is the first in a series of articles aimed at demystifying digital product creation, making the process accessible to anyone looking to start this journey.

Equity Structure

Creating a digital product isn’t a one-person job. We’ve had clients excited about the idea of not sharing profits, believing they just needed to hire professionals to execute their project. However, reality was often harsh for many of them.

Initial development is just a portion of the total cost. Updates to align the product with real-world needs and additional expenses like marketing often surpass the initial investment. That’s why it’s important to share the risk and rely on people with skills that complement your own.

In a market dominated by large corporations, your turning point might be bringing in an investor. Many businesses start with an angel investor who believes in the idea even before it proves its value. While this kind of investment is hard to find, the exercises in this article can help you prepare strong materials to attract investors.

Iterative and Incremental Development

In system development, it’s well known that collecting feedback throughout the process is key to avoiding unnecessary or misdirected investments. The best way to do this is by sharing your ideas with interested people and continuously validating progress.

Our strategy involves creating prototypes, proofs of concept, a Minimum Viable Product (MVP), and small updates throughout the project. This ensures we apply the minimum necessary effort to build something that can be validated and improved based on feedback.

And NO, no one is going to steal your idea! Raw ideas rarely have much value. Plus, as you make progress, it’ll be difficult for anyone to keep up with your pace. Present your idea to people who would benefit from the product—they’ll be grateful you’re solving their problem. But if you’re still worried, use an NDA (Non-Disclosure Agreement).

Exercises

Let’s get started! This article contains a series of exercises to help you refine your product idea. Don’t get too attached to your first idea. If you run into problems during an exercise, go back, rethink it, or revisit other ideas that may be more promising.

1) Unmet Needs

List unmet market needs. Start with your own, those of your business, and those of people around you. This is a brainstorming exercise, so write down everything—no judgment. Focus on quantity, not quality.

Done with your list? Now pick just one idea to continue with the following exercises. Don’t worry about being 100% sure—choose the one that feels most promising right now. Since this choice is based on your initial perception, you’ll likely revisit your list later. Keep it safe and stay open-minded.

2) Problem

What problem is your business solving? Starting from the unmet need, describe the specific problem you aim to address. This will be the foundation of the entire process.

3) Competitors

Research whether there are already solutions in the market addressing the problem you identified. For each competitor found, analyze:

Does this competitor solve exactly the same problem?
Are they operating in the same regional market you plan to enter?

Depending on your answers, follow different paths:

Yes and yes: If the competitor solves the exact same problem and operates in the same region, it might be wiser to seek a partnership instead of starting a new business from scratch. You share the same goal, and joining forces can be more advantageous than splitting the market.
Yes and no: If the competitor solves the same problem but operates in a different market, that could be a great sign that your idea has already been validated elsewhere. You’ll have the chance to study what they did—what challenges they faced, how they solved them, and what decisions they made. You can use this to avoid mistakes and speed up your journey.
No: If no competitors are solving the exact same problem, you’ll face less direct competition, but more uncertainty. The lack of competition might mean you’re facing a real opportunity—or that there are hidden challenges. Dive into the market and try to understand why similar solutions don’t yet exist.

Finally, list all competitors offering something similar and analyze in detail how they operate. Try to extract as much information as possible about:

How do they solve the problem?
How do they communicate with the audience?
Which marketing channels do they use?
What are their revenue streams?
What’s the user journey from first contact to payment?
What prices do they charge for their products or services?

4) Solution

How will you solve the problem? Try to create a small, precise solution. The smaller the solution, the cheaper it is to build. Use competitors and systems from other areas as inspiration.

5) Value Proposition

What value does your product deliver? Will the cost-benefit be attractive to customers? Will they actively seek out your solution? Interviews with potential users can help, but remember: users don’t always know what they want.

6) Market Trends

Identify how your idea connects to a market trend. This can help attract both investors and customers.

7) Market Segment

Define the market segment you’ll operate in. The more specific, the better. Will you sell to individuals or businesses? Businesses usually pay more, while individuals offer larger volume.

8) Market Size

Study the size of your market: how many potential customers exist and how much they might be willing to pay? This helps assess whether the business is viable.

9) Personas

Defining your target audience is crucial to ensure product decisions are aimed at the right people. Here, you’ll outline your ideal customer—someone who will benefit the most, feel comfortable with, and actually use your system.

Define a single persona, if possible. This lets you focus your efforts more effectively and at lower cost. Whenever you make a decision, ask yourself whether this specific persona would be satisfied with the change. That will help guide product development more accurately.

To build your persona, describe:

Age: What is the age range?
Gender: What gender is most relevant to your product?
Knowledge level: How much does this person know about your product’s market?
Goals: What are their main goals when using the system?
Challenges and pain points: What frustrations do they face without your product?
Usage habits: When and how often will they use your system?
Motivation: What will keep them coming back?
Favorite features: Which features will be most appealing or useful to them?

10) Competitive Advantage

Is there anything in your strategy that gives you an edge over competitors? It could be a commercial agreement, a hard-to-copy feature, or lower costs. If not, that’s okay—but ideally, you should have something.

11) Success Metrics

How will you measure your business’s success? What numbers should you track to know you’re on the right path?

12) Costs

At this early stage, you’ll only need a rough estimate of initial and ongoing costs, which can be challenging without technical knowledge. It’s best to consult technology partners like Simpli, who can give you an initial idea. As your feature list becomes more detailed, you’ll be able to refine this estimate and get a more accurate budget.

13) Revenue Stream

Defining your revenue stream from the start is crucial—only paying users confirm your product’s value. Start with just a few monetization options to keep development simple.

14) Communication Channels

Which channels will you use to promote your product and engage users? This depends on your target audience, and your Persona analysis will be your best ally here.

15) User Journey

Define the step-by-step journey your user will follow—from discovering the product, to being drawn in by your homepage, navigating the system, experiencing features, and being prompted to make a first payment. For now, focus only on the parts of the system that directly contribute to this main journey. This should be fully aligned with your Persona analysis.

Conclusion

Congratulations on making it this far! If you completed all the exercises, you now have a solid and well-structured foundation—plus the confidence that your idea has strong potential. That’s a great starting point to turn your idea into a real business opportunity.

In the next article, we’ll take it further. I’ll cover how to better define your product’s features, create a requirements analysis document, and build a no-code interactive prototype. This will give you a clear and tangible vision of what you’re building.

I’d also love to hear about your experiences! Share your ideas, challenges, or how you’d approach this process differently in the comments. Let’s exchange knowledge!

Written by Gil, a fullstack developer with over 15 years of experience and a strong focus on practical software architecture and blockchain technology.