Many executives and investors are skeptical that software products can be developed using outsourcing. Even more skepticism is expressed at the idea of outsourcing version 1.0 of a product. Yet Accelerance clients are using outsourcing to create their products right now. What is the secret to using outsourcing to successfully develop a software product?

Many people believe outsourcing is useless when you are in the Fuzzy Front End - that fuzzy zone between when a market opportunity is known and when serious software development can begin. They think you need to slog through the Fuzzy Front End by coding a prototype of your product. If so, you need the development team here, not several oceans away.

Another false assumption is that you need to write a comprehensive specification for your software during the Fuzzy Front End. Many companies use a very formal product definition process, optimized to remove as much "fuzz" as possible. How long should it take to design a software product before development can begin?

Obviously time is of the essence when developing a new product, but before the development process can begin you must have some idea of what your software will do. It is best to find this out from your prospective customers. But how can you involve your customers early and often in a collaborative process, when both of you are not sure of what they need or want? And what does that have to do with outsourcing?

According to Steve Blank, founder of several software startups and now lecturer at the Haas School of Business at Berkeley, you don't need a product development process. You need a customer development process. You need a process to discover what ornery problem your potential customers have that will cause them to part with their hard-earned money to solve that problem by buying your software.

The first step of Blank's customer development process is Customer Discovery. Here are his steps of customer discovery:

* Create a product (or product demo)

* Meet with customers and answer these four questions of customer discovery:

1. Have you identified a problem customers want to solve?

2. Does your product solve these customer needs?

3. If so, do you have a viable and profitable business model?

4. Have you learned enough to go out and sell?

* Change your product to reflect what you learn

* Iterate until all questions can be answered positively

Is there a way to shorten these iteration cycles? The Accelerance answer is, don't code up your product or prototype at the start. Use an HTML editor to create screen mock-ups. Then link them together to tell the "user stories" of your software product. They show the major use cases of your product. Demonstrating the use cases this way is like putting your product requirements in motion. It simulates how the real product will be used.

HTML is easy to edit and requires no programming. You can make quick iterations before committing your product ideas to code.

Here is the five-step Accelerance formula you can follow to successfully design your product:

1. Describe your product idea and its benefits

2. Create a demo of the major use cases showing the biggest benefits of your software

3. Perform the Customer Discovery steps described above, iterating until you & customers are satisfied

4. Write an MRD using screen shots from your demo as illustrations

5. Develop and test your software

In modern business, you should focus on your core competency and outsource the rest. In the Accelerance five-step process, the first 4 steps of defining your product idea, completing the customer discovery process and documenting the requirements must be part of your core competency. The last step is not.

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Anybody can develop software. But only you can figure out what your customers will buy. And that makes your software development a non-core process. Use this five step formula to take advantage of low cost outsourcing as an effective way to get your product developed quickly.