A product development agency works with their clients to strategize a meaningful product that customers really want, as opposed to an agency that always requires direction from their client.
When an agency owner or representative assures you that they can help with your “project,” what they’re really saying is that they have the technical skills to bring your vision to life.
But when an agency claims to be able to build your “product,” they’re more likely promising that they can help you determine what that product should be, validate it, build it, analyze it, test it, and reiterate on it.
People use words loosely. So, it’s not enough to just check the wording. You need to vet the agency for real product-led initiatives.
In this guide, we explore why more executives and entrepreneurs are hiring product developers versus traditional agencies or freelancers and what to look for in an agency. Plus, we provide a list of the best product development agencies.
Why product-led strategies are on the rise
You’re well aware that product management roles have boomed (and still are). The fast growth in these roles have led some to call it the “Golden Age of Product Development.”
But knowing that product-led growth and product management are trending isn’t enough. You need to understand why these things are growing, so you can be better prepared to choose the right development agency.
B2B software products have been consumerized - Over the past decade and a half, traditionally clunky software has been consumerized. Corporate and small business users no longer want to put up with slow, frustrating software. They want tools that are just as simple as the apps they use in their personal lives. This places increased pressure on software companies to deliver not only business results, but also enjoyable product experiences.
Subscription based economy makes it easier for customers to switch products - You can’t fight the flow of change. The fact is that most software companies make it easy for users to cancel their subscription or downgrade. Rather than attempting to make it difficult (and angering customers), most companies are complying with this trend. In order to keep customers from cancelling, you need to offer the best product on the market.
Siloed departments affect the overall customer experience - Traditionally, software companies were broken up into engineering, marketing, and sales departments. Today, there are still departments and teams of course, but there are interdisciplinary teams and leaders, like CX leaders, product managers, and chief revenue officers. That’s because, with increased competition, ease of competitor switching, and higher quality demands, siloes just don’t work anymore. You need a cohesive, integrated approach to building a product, and it’s very hard to piece together different freelance resources or agencies by yourself.
Product analytics are more advanced than ever before - At the same time, we also have better product analytics. Tools like Heap, Amplitude, Mixpanel, Pendo, and Fullstory, provide insights into users’ unique journeys that didn’t exist before. This helps further break down siloes and foster collaboration that leads to better product experiences.
Product development agencies versus freelancers
Should you hire a product development agency or a freelancer? Let’s take a look at some of the differentiating factors to help you decide.
1. Product focused
A product development agency is by nature focused on developing products, but a freelancer may or may not be. The most talented freelancers niche their services down into one core offering.
It is absolutely possible to find freelancers who offer product management as a service. But you’d still need to find freelance DevOps engineers, Laravel engineers (or whatever you’re building with), and QA testers.
2. Management
When you’re working with freelancers, you’re in charge of hiring, onboarding, and managing them. Of course, a skilled product manager can do this for you, but they may not be able to manage every aspect of product development. For example, a PM might know how to condense user testing into feature decisions and assign backlog tasks to developers, but they might not know how to manage DevOps or QA.
By working with a product development agency, you can avoid the stress, time input, and potential mistakes associated with managing multiple resources by yourself.
3. Rates
Many entrepreneurs and executives choose freelancers because they mistakenly think that this will save them money.
However, agencies have relationships with talent, and provide them with regular, ongoing work or full time employment at more affordable rates. So, hiring an agency is often a better bet.
When you work with an agency, you get access to their network of talent, who are fed regular work. So the cost is often lower than piecing together your own consultants, each of whom will charge 3 - 5X the standard hourly rate of an employee.
What’s more, agencies might be able to source offshore talent. At DevSquad, we hire skilled Latin American developers who work under our product managers, who are based in our Utah office.
4. Availability
When you work with individual freelancers, you are subject to their schedule. Some freelancers like to travel, and if they fall ill, they usually don’t have trained backups ready to go. Agencies, on the other hand, are more accustomed to handling scheduling changes. For the most part, you should be working with the same talent (the same product managers and developers). But if someone quits or goes on maternity leave, the agency can more quickly fill the gap.
5. Adherence to timeline
Product development delays are costly. The importance of speed-to-market on product success has been well studied.
What’s interesting is that delays are often not the fault of the service provider. Entrepreneurs and executives can get excited about their vision and commit feature overwhelm—building more features than are necessary. Maybe the users don’t even need the features, or maybe they do, but those features shouldn’t be part of the MVP.
It’s important not to hire a yes man. You need a strategic partner that will push back to prevent you from building an MVP that’s too big. Although some freelancers can be that strategic partner for you, most of them will take your lead, meaning it is up to you to stop feature overwhelm from happening.
6. Product launch
A product development agency is usually better suited than a freelancer to help launch the product.
Here’s everything that goes into launching a SaaS product:
Free trial, freemium, plan upgrading, and payment capabilities
User onboarding walkthroughs and setting up a knowledge base
Launching on product launch platforms like Product Hunt and AngelList
Getting approved by app stores, if you start with native apps
Because agencies have managed product launches before, they’ll be better at building success from the start and walking you through a stressful time.
7. Ongoing maintenance
Freelancers can be skilled at ongoing maintenance including QA testing, user testing, customer feedback, and backlog prioritization. But most freelancers require direction from you in order to execute on these things well. An agency, on the other hand, will delegate on your behalf.
8. Dual-track agile development process
Your product development agency should embrace the dual-track agile methodology because it allows for simultaneous exploration and execution by dividing work into discovery and delivery tracks.
This way, teams are constantly researching and validating ideas while also building and shipping product improvements. Top-tier development teams worldwide utilize this approach. It facilitates strategic and iterative processes, enabling continuous adaptation to evolving market conditions and user feedback.
When your team utilizes dual-track agile development, they can innovate faster, help you save costs on development, and ensure that updates are aligned with user needs. You can maximize efficiency and minimize the risks of building features that no one wants.
9. Smooth handover and team training when you’re ready
A great product development team will manage the product end to end for you. They’ll take care of everything from strategy through deployment and testing.
This is a major benefit because you don’t have to worry about management. The agency will use their own playbooks, experience, and resources to get the job done.
But this also means that you have no control over your product and no knowledge of the information architecture, coding process, code reviews, etc.—making it very difficult for your company to take charge.
To mitigate this risk, make sure to choose a product development agency with a great handover process.
The company should train your team so they can take over the product. They should also give you access to their development and deployment playbooks so you can continue to innovate at speed.
Make sure to chat with the agency about how they approach handover. You want to be sure they have processes in place before you give them the reigns.
Types of product development agencies
Product development agencies can specialize in a variety of services and products.
The primary categories of product development agencies are:
Hardware products - Some agencies specialize in creating hardware like IoT sensors, smart watches, media players, and other devices.
B2B software and digital products - Many agencies specialize in digital products like corporate internal-use software and B2B SaaS
Consumer physical products - You can also partner with an agency that develops physical products for consumers like skincare, toys, hobby items, household appliances, etc.
Consumer tech - Because B2B and B2C apps are very different, many agencies focus primarily on consumer tech like mobile apps and streaming platforms.
Equipment - Some agencies also specialize in creating manufacturing equipment like assembly line automation or imaging systems.
Product development agencies versus software development agencies
What about more traditional software development agencies? How do they compare to product development agencies. The differences aren’t as stark as they are with freelancers, but there are a couple of things to consider.
When you hire an agency, the number one benefit that you’re getting is having someone who will take care of management.
But that doesn’t mean that the agency can help you launch a product that users will love (and pay for).
Essentially, you need to make sure that they offer the kind of management you are looking for.
Product development agencies are very different from software development agencies.
Product management - A product development agency should offer services like design sprints, prototyping, user testing, and MVP strategy alongside technical services like PHP and Laravel development.
Project management - A software development agency might not offer product strategy and decision-making, and instead will focus solely on delegating backlog tasks and keeping all resources on track.
What to look for in a product development agency
Even if you intend to drive strategy and product vision inhouse, it’s still smart to choose a product development agency instead of a traditional agency. That’s because they can provide the services you need to validate your product concept, and they can ensure a leaner adherence to that vision.
Here’s what to look for when selecting an agency:
1. True focus on product
Check that the agency has a true focus on product. You’ll be able to tell by their case studies, testimonials, services, and website copy. Companies that offer MVP strategy and design sprints have a product focus compared to companies that only offer software engineering.
2. Process for validating product before building
The company should also have a process in place to help you validate your concept before building. If you tell an agency owner about your product and they promise to help you build it without validating it, run. You’re at risk of wasting tens of thousands, or hundreds of thousands of dollars.
Validating should include:
Feedback and collaboration with strategists at the agency
Prototype development
User testing
Prototype reiteration
3. Helps strategize your MVP
The company you choose should help you strategize your MVP. When developing something as expensive as a software product, everyone could use an outside eye.
During the design sprint, your agency strategists should work with you to create a story map of the product. That includes what the users struggle with, and every possible solution. This is best done in person, but it can happen remotely too.
With an exhaustive list of problems and solutions all mapped out for everyone to see, you can then begin to select the most impactful workflows that need to be built.
4. Fully managed with all the resources you need
The agency should also be fully managed. Top resources include:
Product manager
Developers
DevOps engineers
QA testers
In order to meet your launch deadline, the agency should suggest the number of developers you need, most likely somewhere between two and six when building a brand new product.
5. Takes ownership of the product
The agency should also take complete ownership of the product. Aside from subject matter expertise and business requirements, they shouldn’t need any tactical direction from you. Otherwise, it’s too challenging to make sure that their resources are matching your vision. You should have just one or two contacts at the agency (business strategist and product manager). These resources should then manage everyone else at the agency so you don’t have to.
6. Offers DevOps services and handles launch
Development services like Laravel, Vue JS, Node JS, React, Angular, and Electron aren’t all that’s required to build a product.
To reduce stress and ensure successful launch, the company should offer DevOps and help you choose the right hosting and security products and services. What you don’t want is to be handed a bunch of code that your team is supposed to deploy.
7. Ongoing quality assurance and maintenance
The agency should also offer continuous deployment and QA testing. Immediately after launching to your beta users, there will be issues. The company should have a plan in place for collecting feedback from users, regularly testing the product inhouse, and pushing fixes.
When chatting with an agency owner or account manager, make sure that you ask them about this part of the process and what they offer.
Again, the more that the agency helps with continued development, the more evidence you have that the company takes full ownership of the products that they build. An agency without extensive maintenance services available is clearly one that just wants to finish “projects,” get paid, and move on. And that’s exactly the sort of agency that you don’t want to hire.
Top product development agencies
The agency you should choose depends on the type of product you want to build. Most agencies will specialize in a certain area, such as B2B SaaS, consumer tech, or hardware.
Here are some of the top product development agencies:
1. DevSquad
Best for: SaaS product development
DevSquad is a product development agency with extensive experience strategizing and building enterprise and small business SaaS products, as well as internal-use software. Core services include design sprints, MVP development, Laravel and React development, and more. The company is known for its unique pay-as-you-go subscription based model and truly minimum MVPs.
“Our relantionship and our level of communication is as if they were our own in-house team. They feel ownership in our product, they know our product really wel. Our development posibilities with DevSquad are endless” - Drew Sparks, CEO at SwellCX
“It really comes down to their experience building products for early stage companies. DevSquad knows how to build an MVP and it shows every day.” -Tyler Hall, CEO & Founder of Drivably
2. Very
Best for: IoT product development
Very is a product development company specializing in IoT. Their IoT-specific services include product design, mobile app development, hardware engineering, software development, and machine learning in order to develop truly connected products.
3. Method
Best for: corporate digital transformation
Method is a digital product and experience agency that specializes in digital transformation for established corporations and consumer brands. For example, they worked with American mall retailer Lush to establish new revenue streams for its ethical and environmentally friendly products. Method helped Lush come up with the idea for the Lush Kitchen, where customers can watch products being made. They also led the redesign of Lush’s magazine, which attracts the highest-converting online customers of any acquisition channel for the brand.
4. Encata
Best for: hardware development
Encata is a hardware development company that offers design, development, and manufacturing services. The company creates IoT products, robots, industrial equipment, and digital hardware.
5. Product People
Best for: digital products
Product People specializes in aiding companies in the discovery and delivery of digital products. They offer services such as Interim/Fractional Product Management, Product Ops, and Product Leadership, catering to various needs from temporary staffing to full product management teams. With a roster of experienced product managers and leaders, they have managed or supported 350+ cross-functional teams. Their approach emphasizes fast onboarding, team alignment, and delivering tangible outcomes.
6. Prodigy
Best for: Metaverse product development or innovative consumer products
With Prodigy, you can develop a variety of unique products. In terms of software, they specialize in Metaverse and AR development. But they also have completed successful consumer physical products like an innovative baby stroller and powerful snow blower. So if you’ve got an idea for something futuristic, this might be the team for you.
7. Cprime
Best for: digital products
Cprime offers agile product development to Fortune 500s. Past clients include Apple, TMobile, Bloomberg, and Tesla. Their product-led approach is designed to help companies fail fast, avoid wasted investments, and adapt to market changes. The company offers end-to-end product development as well as product team training, workshops, and consulting.
8. Innovatemap
Best for: digital products
With Innovatemap, you get a partner for digital products, branding, marketing, and design. The company can help you ideate, design, and launch a digital product. Then, the team is available to assist with your visual identity, product marketing, and user growth.
9. Bain
Best for: Product portfolio management
Bain is one of the largest consulting agencies in the world. They work with all types of industries, including retail, manufacturing, technology, oil and gas, healthcare, consumer products, financial services, and more. Their product management consultants can help you strategically manage and update your full portfolio of products, including elimination, reiteration, and new product development.
10. LA NPDT
Best for: Manufacturing, B2B software, and sustainable product design
As a certified B Corp, LA NPDT offers innovative and sustainable product design. You can work with them for comprehensive product development, concept prototyping and validation, and design optimization and manufacturing. The company offers ideation, market research, industrial design, mechanical design, software and firmware development, and electronics design.
11. FLYNN
Best for: industrial design
Flynn focuses primarily on industrial design and manufacturing design. The team explores new materials, cutting-edge technologies, and unique design elements to meet and exceed industry standards. They take a user-centric approach to disrupt markets. Services include product design consulting, prototype design, design research, and end-to-end product development.
12. Speck Design
Best for: industrial design
Speck Design is a product design company that specializes in industrial products. They own 200 different patterns and have won over 50 design awards. Through user research and design strategy, they offer hardware, software, and manufacturing design. They also help companies come up with a compelling brand identity that matches the finished product. Their team offers experts in mechanical engineering, product engineering, and electrical engineering.
13. Solvd
Best for: digital products
Solvd offers end-to-end product development for web applications and mobile applications. This includes UI/UX design, quality engineering, manual testing, test automation, cloud services, DevOps engineering, data engineering, AI development, and machine learning. They create using their rapid app development approach, which begins with strategic planning then moves onto prototyping and implementation.
14. Tomorrow Lab
Best for: hardware products
Tomorrow Lab is an innovative studio for hardware products. Recent products include scalable edge computing, EV scooters that last up to 12 miles, reminder technology for consumer packaged goods, an improved bike share checkout experience, and a menstrual product dispenser. To create innovative products, Tomorrow Lab offers brand strategy, product design, and engineering. Previous clients include Google, Intel, P&G, United States Postal Service, Mastercard, National Geographic, and Lego.
15. Bite Interactive
Best for: mobile app development
With Bite Interactive, you get a team of senior software experts that are committed to delivering high-quality products that solve important business problems. Their favorite approaches include Jobs To Be Done, Behavior-Driven Development, and design that is both intuitive and widely accessible. While they offer web and backend development, the company focuses primarily on mobile app development. They can handle building apps from scratch or taking over unsuccessful projects from other agencies.
16. Abalta
Best for: mobility and connected car development
Abalta focuses primarily on digital products for mobility and connected cars. They offer technical expertise on connectivity, cloud backend, and embedded device integrations. The company also sells existing products to speed up development. These include connected, customizable content platform that can resolve virtually any user need and a cloud backend administration to enable upgradeability and centralized control. Their GIS, location, and data products can save your company a lot of money compared to developing your digital product completely from scratch.
17. Metova
Best for: mobile app development
Metova is a product development agency with a ton of experience building native mobile apps. They offer digital consulting and product delivery, data engineering, and AI development. You can engage with them as a fully managed agency or access their comprehensive talent solutions to add to your internal workforce. Metova also helps with workforce planning and employee engagement to help you determine the hires you need and make your current workforce more efficient. With experience in fintech, nonprofit, and corporate mobile apps, the team can handle very complex projects.
18. Net Solutions
Best for: digital products
In business since 2000, Net Solutions specializes in designing, building, and modernizing software applications. Their approach involves co-creating or updating digital products and platforms using the latest web, mobile, and cloud technologies through remote agile software development teams. They focus on elevating customer experiences and fostering business growth by developing transformative solutions that excite users and drive revenue. Previous clients include Hubpix, Euro Car Parts, PayPal, and Microsoft. With offices in the US, UK, Canada, and India, the company serves startups and enterprises around the globe.
19. Manta Product Development
Best for: hardware and manufacturing
Based in Cambridge, Massachusetts, Manta offers an team of experts and state-of-the art facilities and equipment to support hardware and manufacturing projects. They utilize human-centered design to improve usability and product differentiation. New products get designed, prototyped, and validated before development. The company has previous experience in robotic surgery, strain-reducing legwear for horses, mobile laptop displays, imaging systems, and assembly line innovation—making them a great choice for innovative machinery and physical products.
20. West Monroe
Best for: digital products
West Monroe’s website states that the bring the right people into the room from the very start so that your project begins with all of the experience and guidance needed to succeed. They support companies throughout the digital product lifecycle, from pre-market innovation to market disruption, scaling, and business transformation. The company offers many other consulting services, making them more of a jack of all trades type of consultancy, but this could be a good fit for large enterprises looking to satisfy multiple initiatives. In addition to product development, West Monroe provides support with customer journey analytics, cybersecurity, data analytics, business operations, mergers and acquisitions, organizational design, and organizational change.
The ideal product management process
When working with a product development agency, they should have a proven process in place to make sure that your idea is validated before it’s built--and that it’s continuously improved based on market and user research.
Below, we offer an overview of the ideal product management process so you can vet your agency’s approach.
Ideation: Begin by identifying a problem in the market or discovering an unmet need. Focus on opportunities, possibly derived from personal experiences or insights gathered through industry research and interviews. Validate your idea using a structured process to ensure its viability.
Prototype creation: Develop a prototype that mirrors the final product's user experience as closely as possible. This allows for early feedback from stakeholders and potential users, minimizing costly revisions later on. A high-fidelity prototype should simulate key functionalities and provide a tangible representation of the product's vision.
Prototype validation: Conduct user testing to validate the prototype's usability and functionality. Utilize methodologies such as the Design Sprint Process to gather feedback from target users. Adjust the prototype based on insights gathered during testing, ensuring alignment with user needs and preferences.
Backlog creation: Create a detailed backlog outlining development tasks and priorities. Collaborate with the development team to prioritize features essential for the minimum viable product (MVP). Ensure that the backlog reflects the project's scope and aligns with the desired timeline and budget constraints.
Development and UX design: Engage in the development process while maintaining a focus on user experience (UX) design. Aim for efficient development cycles to expedite time-to-market and minimize costs. Regular check-ins with the development team ensure transparency and enable timely adjustments to the feature set.
QA testing: Execute thorough quality assurance (QA) testing to identify and address any issues or bugs within the product. Employ a combination of manual and automated testing methodologies to ensure comprehensive test coverage. Conduct testing iteratively throughout the development process to maintain product quality and stability.
Deployment: Deploy the product to the cloud infrastructure, utilizing scalable solutions such as AWS Lambda for efficient management. Choose deployment models that align with the project's scalability requirements and budget considerations. Engage DevOps engineers to facilitate seamless deployment and ongoing maintenance.
Continuous testing and DevOps management: Implement continuous testing and DevOps practices to maintain product quality and agility. Regularly deploy updates and improvements to address user feedback and evolving market demands. Establish robust agile processes to support continuous integration, deployment, and monitoring.
Building new features: Iterate on the product based on feedback from beta users and customers. Prioritize new feature development to enhance the product's value proposition and address emerging needs. Utilize various feedback channels, such as surveys and user interviews, to gather insights and inform feature prioritization.
Ultimately, a product development agency is one that can help you validate your concept and bring it to market. The company should provide holistic services, from strategy through development and launch.
Ready to build a SaaS product users love? Get in touch with DevSquad.
