Why create new business software? #2 The product 

By Amy, Eastpoint Software on 11 February 2021

In the first blog post of this pair, we introduced ‘the leaky bucket’ and ‘the product’, two types of business software. 

The leaky bucket is something that is inefficient and needs fixing. In business software terms, it’s an identified problem, it’s costing money, and once the software is built to fix it, it will improve the company. 

This type of business software, when developed, has a captive audience of staff who will use the product and understand its benefits. 

But this blog post isn’t about the leaky bucket, it’s about another, very exciting, type of business software - the product. 

“The product” 

In this context, the product refers to a new digital product that will be used by other people and organisations, rather than within your own existing business. 

This is software that will, in some way, enhance productivity across business processes or functions. The application itself could be anything. The common feature will be that you have identified an opportunity to solve a problem. 

The catalyst to create this new product might be legislative changes, disruption in your industry, or because new innovation or technology can solve an existing or long held problem. 

What to do next 

Once you have identified the problem you want to solve (perhaps 'we need to digitise this manual process' or 'we need a data platform to provide valuable insights and management') there are two parts to solving it: 

  1. Understand what to create 

  1. Create it 

It’s a pretty straightforward list, but carrying out and achieving these steps is often more complex than it seems.  

While we can all come up with an idea and think it’s brilliant, understanding it from the customer perspective, or the person you are solving the problem for, isn’t easy - even if you think you are the customer. 

Understanding what to build 

In simple terms, you are looking to prove that: 

  • The solution actually solves the problem 

  • The benefit gained from solving the problem is great enough that customers will buy the product 

You have to understand your customer to know what adds value. You need to learn, in order to validate, and create a business model around the product, not just build the product itself. 

Which brings us to... 

The business model 

We’re all familiar with business models for capturing value and delivering profit. 

The business model needs to stack up, alongside solving the identified problem. The value you deliver to customers needs to be greater than the cost you will charge. We mentioned previously about products being a result of disruption in the industry, and here is a word of caution from Kodak about how tricky a business model can be. 

Kodak was well aware of the disruption that digital cameras would bring to analogue photography. They understood this emerging market – what with having invented the digital camera in the first place. But they still couldn’t make it work, as they didn’t identify how it would affect the business model, focusing on printing rather than digital (note that the link is a contemporaneous article from The Guardian on Kodak’s print pivot).  


The first priority of a new product business is to learn the value it brings to users. No one wants to build something high cost and high risk, and learning is aimed at making it as low cost and low risk as possible. 

When creating new business software, you will need a clear picture of the value that it will deliver. In other words: your vision for how it benefits it's customers and users.

The learning should not be frivolous and you are still accountable for the time you spend. This is called ‘innovation accounting’ and is an art in itself, as it can be difficult to measure learning, particularly when you are developing new, disruptive software. 

Leaping the disruption chasm 

Something to be aware of is understanding how your product will grow with your customer base. You want to give your product the optimal chance of succeeding, and solving the problem for the maximum number of people. If you don’t achieve the products potential, you’re wasting money. 

Leaping - or crossing - the disruption chasm refers to the gap between early adopters and a wider, more mainstream audience, which you may be depending on for your business model. 

Early adopters will typically be more ready to accept a new, innovative product. They will appreciate that a product does something that nothing else does and more forgiving of what it doesn’t do. As well as understanding the advantages, they are often willing to help give feedback and move the product forward, and in return you may want to reward them with preferential pricing and other perks. 

Mainstream users may be wearier of trying something new, more demanding on ease of use and convenience, while still expecting a comprehensive solution. 

If you only consider your (still important) early adopters, the chasm could get wider and harder to cross. 

Work with us 

Eastpoint is committed to using the tools, techniques and technology that deliver bespoke, value-driven software across web, mobile and emerging technologies

Call us on 01223 690164.