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A new breed of company has recently started popping up in more and more conversations around product development. As a result, people are beginning to ask questions like what a digital product studio is, what services they provide, and how they can help me reach my goals?
When Crowdlinker first pivoted from a SaaS start-up to becoming a digital product studio, we didn't know what we were becoming. Our only job was to help our clients (many of them close personal friends) build and improve digital products.
We soon discovered that the product development process could be a slow and disjointed experience. Unless companies had the means to hire an entire team internally, they would inevitably end up working with multiple agencies, each doing their own thing. As a result, subpar experiences, products, and results were the outcome in most cases.
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What digital product studios like Crowdlinker did was form a company that took all these different but critical areas of product development and brought it all under one roof. The result was a digital product studio was born. In the last few years, digital product studios have gone on to become the secret weapon of choice for many product-focused companies like Shopify, MLSE, and NBC Universal.
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Table of Contents:
Digital product studios look to build cross-functional teams, typically consisting of designers, engineers, and product managers, to aid their clients strategize, validate, design, and develop new products or improve existing products. Great digital product studios function as an extension of the company they partner with and take on the most critical parts of a product development journey from start to end.
Digital product studios differentiate themselves from other similar offerings, most commonly product design, and development agencies, by taking ownership of the product development process from strategy, design, development, and post-delivery training.
Companies choose to partner with digital product studios when they lack internal resources or expertise, need to get a product to market faster than their competitors, or just need a new creative and strategic perspective.
Digital product studios are commonly hired to help with new product discovery, validating ideas and assumptions, building prototypes and MVPs for user testing, all the way to building entire platforms, applications, and websites.
Ultimately, forward-thinking companies partner with digital product studios because of their subject matter expertise in developing products, which saves time, money, and effort. Much like anything else, developing entire digital products from scratch is a complicated procedure that requires thought-out systems and processes to execute correctly.
Digital product studios are a relatively new type of service business that have overlapping benefits with design and development agencies, hiring freelancers, and building out an internal team. Below is a brief explanation of how digital product studios are different from the options mentioned above for creating category-leading digital products.
"The focus of a digital product studio is to deliver a working digital product and assist their clients all the way from strategy to commercialization. Although digital product studios usually don’t have an equity stake in the products they create, companies who hire them see them as part of their internal teams." - Aram Melkoumov
Hiring a product design and development agency vs. digital product studio
With an agency, whether it's design or development, you come to them with a brief or a very well outlined structure of what you want to be done. It's basically - here's the job, go and do it.
Typically, there is no one at the agency who will be asking hard questions like: is the problem you’re trying to solve actually a problem worth solving, will the technology you're deciding to go with still be relevant down the road, and are there more effective ways to reach product-market fit quicker?
Working with a digital product studio is different because a client does not need to come to them with a blueprint of exactly what they need. Requirements, features, and technology can be selected collaboratively throughout the product development process.
Moreover, digital product studios can help with multiple critical areas of the product development process because of their diverse suite of capabilities. Instead of hiring and managing 3-4 different partners, digital product studios can simplify processes and help companies cover multiple gaps. We’ve personally seen this synergy improve a) final product quality, b) time to market, and c) overall client experience.
Hiring freelancers vs. digital product studio
Freelancers are a great alternative to digital product studios when tasks are small and well-defined. Hiring freelancers also requires less commitment and cost than working with an established digital product studio. However, when you need to build out something that is complex or not well defined, digital product studios are a far superior option.
Digital product studios are partners that can work on your product from ideation all the way to launch. Moreover, digital product studios have a diverse set of skills, including strategists, designers, engineers, product managers, and marketers, which leads to a more holistic view of the product that is being developed.
Digital product studios are also less risky to work with than hiring freelancers in the sense that a freelancer might just be one individual. In contrast, a digital product studio is a company with a roster of talent that can be switched in and out at the client's discretion. Moreover, freelancers might not have the same security and privacy standards held by digital product studios.
Building an internal team vs. digital product studio
A good chunk of companies out there have a hard and fast rule when it comes to keeping all their product design and development work in-house for reasons that could include privacy, IP protection, or wanting to have greater control over the process.
What those companies miss out on is the flexibility and speed of working with a digital product studio. Instead of hiring, nurturing, and allocating internal teams, working with a digital product studio allows you to get access to vetted talent that can be scaled up and down depending on the demands. This alone helps your company de-risk product development, in addition to saving time and resources needed to find, interview, and hire new talent.
Other benefits we’ve noticed include increased efficiency, objectiveness, and output. Set budgets, timelines, and processes push digital product studio teams to complete essential tasks fast. With distractions caused by office bureaucracy, constant check-ins, or defined roles, internal teams can be bogged down by extraneous variables that are completely unrelated to the success of the product.
For new product development, existing product maintenance, or new product discovery, digital product studios standout above using internal teams if you are optimizing for agility, domain expertise, and objectivity - not to mention an entirely new set of people giving their expert opinion on how the product can be made better with less effort.
Because of their diverse pool of talent, digital product studios have many use cases. A few common ones we want to highlight include building a new product, improving existing products, quickly staffing technology projects, discovering new products to build, creating entire platforms from scratch, and designing and developing robust marketing websites.
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Building a new product
This is any digital product studio’s bread and butter. Imagine the next time your company needs to introduce a new digital product, you could tap into years of experience, and a multitude of relevant skill sets immediately. Instead of having to do it all yourself, you could off-load all the heavy-lifting to an external partner with processes and people already in place.
Digital product studios are, after all, experts in running discovery, doing user research, validating ideas, building prototypes, and most importantly, designing and developing category-leading products that your customers will love to use.
Working with a digital product studio also helps to de-risk new product development, improve time to market, gives you access to technology-specific expertise, as well as saves your company the effort of hiring an entire team internally.
For these reasons and many others, digital product studios like Crowdlinker are tapped to help when forward-thinking organizations are looking to build a digital product for a new customer persona, industry vertical, or introducing new technology.
Improving existing products
How do you work on new initiatives while ensuring that existing products you have in the market are still getting better?
New demands, shifting focus, internal resource constraints, and lack of ideas are all reasons that existing products don’t get the time and investment needed to continue serving a purpose in the user's evolving life.
Organizations often use digital product studios to help maintain or build on top of existing products. Working as an extension of the internal teams, digital product studios can be onboarded to existing products quickly. Instead of hiring and training new personnel, digital product studios allow organizations to tap into cross-functional teams within days, not months or years.
Organizations also benefit from getting access to new perspectives, processes, and ideas. As a result, the risk is reduced, and scalability is increased as well. All these benefits relieve pressure off the internal team and allows them to focus on the core product or the company’s next big bet.
Quickly staffing technology projects
Hiring new engineering, design, and product talent is hard. Hiring this talent that fits your stack, culture, and budget within strict timelines is close to impossible.
Even if you manage to find a superstar for your product team, it still requires rounds of interviews, negotiations, paperwork, and onboarding before the talent you needed yesterday can start. And if the new talent doesn’t work out for any reason, then it's back to the drawing board all over again.
For these reasons, companies partner with digital product studios to provide them with well-meshed, cross-functional product teams that already have ample experience working together. As a result, companies can quickly staff vetted talent, which can be scaled up and down depending on the product requirements.
The ability to staff expert engineering, design, and product talent in days not months solves a big problem for many companies with more work than people to do it. Partnering with a digital product studio allows your internal team to stay focused on what’s important as well as increasing flexibility, speed, and capabilities for the company as a whole.
Discover new product to build
Corporations face increased competition from globalization on one side and decreasing barriers to entry due to technological advancements on the other. Customers are constantly demanding more personalization, and the best talent is leaking through to work for the exact start-ups that are disrupting them.
For these reasons, organizations of all sizes and industries need to continue discovering new ways to serve their customers before someone else does. But what if internal ideas sessions are not leading to any new and exciting product ideas?
Digital product studios aid with the role of discovering new product ideas for organizations looking to innovate faster than their competitors. Through their product discovery process, digital product studios are able to uncover, validate, prototype, and user test ideas quickly and efficiently.
As an external partner, digital product studios prevent companies from distracting internal resources, can provide unparalleled objectivity, and are free from bureaucracy leading to better overall quality. We’ve also noticed that being removed from the companies we work with allows us to see opportunities and threats that might go unnoticed otherwise.
Build an entire company
You’ve got a great product idea in your head that you know will help tons of people. But how do you bring your idea to life?
What stands between you and turning your idea into a business might be that you're missing the technical expertise, or you don’t have a strong team in place, or you don’t have systems to design, develop, and launch a product from scratch.
For these reasons, entrepreneurs partner with digital product studios to bring new ideas to market. Digital product studios allow entrepreneurs to focus on their strengths and leave the heavy-lifting product development tasks like prototyping, user testing, and engineering to the digital product studio they are partnering with.
Instead of hiring an entire team, entrepreneurs can get access to the exact skill-sets they need to make their product a category leader. In addition, resources can scale up and down as needed.
Prototyping and MVP
Can you really make a prototype or MVP that captures the essence behind the product you ultimately want to build within a reasonable budget and timeline?
Companies looking to make major investments into developing a new product want to know if their idea solves an important problem, as well as if their solution will be adopted by the customer before they commit.
For that reason, companies hire digital product studios to help them create wireframes, clickable prototypes, and MVPs to test their assumptions with actual users. Well-crafted prototypes and MVPs provide just enough functionality for users and stakeholders to experience the product before building it.
Prototypes and MVPs ultimately help add a new layer of validation to any major product development project, as well as provide rich insights for the teams working on the product to leverage.
Design and develop robust websites
As a marketing leader, your company website is the hub for all your online marketing activities. It’s the single most important place your prospective customers will visit before they choose your product or service. Do you think it’s up to par?
When marketing leaders come to us looking for website design and development services, they expect that their new website will offer their visitors a supreme user experience, have a scalable technical architecture, and be easy to modify by non-technical personnel.
The advantages of partnering with a digital product studio extend beyond just the basics. We’ve noticed that our clients benefit most from our ability to surface critical information, which helps them understand their customers better through our workshops. In addition, clients benefit from leveraging our deep understanding of technology and how it's evolving.
Before any work begins, most digital product studios follow a similar process to make sure their engagements are set up for success. As a result, digital product studios take steps to collect information, draft PRDs, build estimates, and make sure there are rules set up. Below are some common steps:
This is usually the starting point when looking to work with a digital product studio. The discovery call or intro call is an opportunity for both company and digital product studio to come together and build a better understanding of each other and the project at hand. Common talking points during this first call include:
Once the digital product studio is done collecting information about the project in terms of outcomes, timelines, and other critical requirements, they are ready to create a PRD or product requirements document which outlines the major milestones, user stories, and additional details describing the solution.
The PRD could take a couple of days to complete. In the process, the digital product studio might want you to complete surveys, get access to the codebase, or review previous designs. People commonly involved in this process include engineers, product managers, and designers. Good digital product studios build their PRD by gathering viewpoints from all the stakeholders involved in the project.
Now that all the product requirements are written down, the digital product studio can more accurately provide an estimate for the project. In their estimate, you should be looking for a breakdown of how time and cost are distributed across discovery, design, development, and product management. For less-defined projects, a digital product studio might choose to keep the engagement on a time and material basis, meaning you are purchasing a set amount of hours per month to run sprints with the talent you need.
The estimate then goes to the client for final approval. Items can be added or removed and the scope can be adjusted at this point. Some digital product studios offer their clients payment plans while others accept half the payment up front and the remaining once the engagement is complete. There are also digital product studios who accept equity for payment.
The final step in this process is signing the MSA or the Master Service Agreement. Generally, the MSA includes details and definitions around the services being offered, payment details, confidentiality agreements, data protection and security, insurance, and much more. These agreements can be long and confusing and might require lawyers to review before signing.
Digital product studios exist to create or improve digital products. They create systems and processes which allow them to be agile, consistent, and cost-effective. Although the exact processes vary from studio to studio, there is a general theme that most follow. Below we’ll outline that process at a high level.
Discovery
Is there an actual product behind this idea? Does it solve an important enough problem? Will the target audience use it? Will we see an ROI?
These are the types of questions a digital product studio is solving for during the first stage of their process. Through leveraging customer interviews, prototyping, and user-testing, digital product studios are able to assess the feasibility, as well as validate the demand for a product.
Through discovery, digital product studios align themselves with the organization they are partnering with, as well as capture business objectives, product needs, and success criteria. From this point, digital product studios break down problems into smaller pieces and uncover the most effective path forward.
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Who is involved:
Activities:
Design
Coming up with an idea that solves a major problem in your customer’s life is just the first step. The final product usage and adoption will largely depend on the experience it provides the customers.
Providing a great customer experience entails leveraging well-constructed user personas and journey maps to empathize with your customers and address the pain points through great design. Crowdlinker specifically utilizes human-centric design processes to create products that not only look good but feel wonderful to use.
Length:
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Engineering
Engineering is the bedrock of any product development process. Engineering applied correctly allows products to scale, keep their customer’s information safe, and provides a seamless experience throughout their product.
Great user experiences require the technology powering them to be considered throughout the product life-cycle. Digital product studios work closely with internal teams to ensure there is clarity, consistency, and effective technical implementation that follows proven methodology. By adhering to the agile development practice and leveraging senior expertise across multiple tech stacks, digital product studios can improve the end products quality.
Moreover, having the same partner in charge of design and development cuts down issues related to the "transfer of knowledge" from one company to another. In addition, your company saves time and effort of onboarding and managing a design firm and development firm because digital product studios keep both in-house.
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Deliver and improve
Once the product is built, the digital product studio will transfer the code, deliverables, and processes to the clients. Some digital product studios also offer comprehensive training and on-boarding support so their clients can hit the ground running.
After launching, clients can continue to work with digital product studios to iteratively make their products better through the data they collect. From our personal experience, we’ve noticed that some clients choose to launch their products lean and hire a digital product studio to continue working on non-critical features after.
Training and after-launch support is a major reason why companies partner with digital product studios. Unlike most design and development agencies, digital product studios are in a position to offer comprehensive training for client designers and developers to take over a product smoothly. Moreover, because digital product studios build a deep understanding of the market, customer, and problem, they are well-suited to recommend future iterations of the product.
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Digital product studios work in cross-functional teams, most commonly composed of product managers, product designers, product researchers, product engineers, quality assurance, and product marketers. Each roles serves a different function, which is outlined below:
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Product managers
Product managers are the glue that keeps the entire project together. They act as the “CEO of the product” and are present at each stage of the product development process. Their responsibilities include:
Product designers
Product designers specialize in creating easy to use and intuitive web and mobile experiences. They focus on building synergy between the business, the problem, and the technology for the end customer. Product designers at digital product studio are responsible for:
Product researchers
Product researchers are used to collect market intelligence, competitive research, as well as helping product designers and managers with user testing. Product researchers help shape the strategy, design, and development of each product. They are also commonly responsible for:
Software engineers / developers
The engineering team at digital product studios' bring the product to life. At digital product studios', engineering is involved in the product development process from the start. Engineering teams have influence in product strategy, design, and of course development. Digital product studios involve software engineers and developers from the beginning of the project because it leads to better estimates, implementation, and products. Here are some responsibilities of engineers at digital product studios':
Quality Assurance
The final piece that is commonly found in a cross-functional product development team is QA or quality assurance. QA, much like their name suggests, are responsible for ensuring that every product that ships is free of errors. QA also guide product managers on how to improve features, design, and navigation of the product they're testing. Task that QA teams are responsible include:
Digital product studio usually work on either a time and material basis or resource allocation. With time and materials, work is scoped out and the clients are charged on a blended hourly rate. Alternatively, with resource allocation, the client gets access to talent full-time or part-time for a certain period of time.
Benefits with time and materials:
Benefits with resource allocation:
There are also instances where companies can negotiate cash + equity or just equity deals.
Product Leaders
Product leaders partner with digital product studios when they are introducing new products or improving existing products. Seeking external partnerships allows product leaders to ship faster, source expert talent quickly, as well as get perspective from people outside the company.
Challenges product leaders need to solve:
Unique value proposition of partnering with a digital product studio:
Common use cases:
"I need a ground-breaking new innovation to keep my company relevant and disruptive short and long-term in this competitive market."
Technology Leaders
Finding qualified engineering and development talent is a very hard task for any technology leader. From our experience it takes weeks or months to find one good hire that fits the requirements. But, what if you need a top-notch software engineer tomorrow? Whether it’s writing reusable code, designing databases, or building architecture, you can find senior engineers with experience at digital product studios.
Challenges technology leaders need to solve:
Unique value proposition of partnering with a digital product studio:
Common use cases to partner with digital product studio:
“I need access to scalable technical talent at my organization in order to increase velocity and get deliverables completed faster.”
Founder / CEO
You’ve just started a company and want to get your solution in everyone's hands. Before that can happen, you need to hire product strategists, product managers, designers, and developers to bring your idea or MVP to life. Partnering with a digital product studio helps founders and CEOs sidestep hiring and allows them to get experienced, cross-functional product teams in days, not months.
Challenges Founder and CEOs need to solve:
Unique value proposition of partnering with a digital product studio:
Common use cases to partner with digital product studio:
“I’m a subject matter expert, but I’m not technical. I don’t know what’s involved in building a digital product and taking it to market.”
Marketing Leader
Technology is changing the way people interact with brands, and marketers are taking notice. The new frontier in marketing is building complementary tools and applications that assist their core demographic achieve their goals. As a result, marketing leaders are turning to digital product studios to help with not only building marketing websites, but also value-added calculators, spreadsheets, and specialized software to help with onboarding all the way through retention.
Challenges marketing leaders need to solve:
Unique value proposition of partnering with a digital product studio:
Common use cases to partner with digital product studio:
"With increasing competition I need extra design and development resources to bring my strategy to life."
With so many digital product studios out there, how do you choose the right one for your project? Below are some basic areas we would recommend you focus on before deciding:
Portfolio of work
Checking a digital product studio portfolio of work will give you an idea of what to expect in terms of quality of their output. Moreover, you will get a better sense of how much experience a digital product studio has built up which they can apply in your project. A digital product studio that has designed and developed other products using similar technology, design systems, or strategy will have an upper-hand when it comes to execution.
Technology expertise
Every digital product studio has a preferred technology stack they like to build with. Working with a digital product studio that specializes in your tech stack mitigates risks, as well as shortens the learning curve. Inquiring about previous projects, reading case studies, and chatting with clients are all ways of assessing a digital product studios' strengths in terms of technology.
Experience working in verticals
In addition to looking at the portfolio of work and technology expertise, picking a digital product studio that has worked in or specializes in certain verticals also plays a role. Digital product studios that have worked in the same verticals as your company have an easier time understanding the customers, their pain points and the solution that needs to be built. Onboarding, communication, and time to market also improves, because digital product studios enter the relationship with preexisting knowledge about nuanced details like government regulation barriers, etc.
Rapport / culture fit
In our opinion, finding rapport or culture fit is the most important element with any engagement. When you can be certain that the digital product studio that you have partnered with understands the problem you are trying to solve and business objectives you are trying to achieve, it leads to far more successful engagements overall. You will be spending a lot of time with the digital product studio you partner with, so it’s important you choose one which is most aligned with your values and company culture as a whole.
Cost
As the old adage goes, you get what you pay for. When working on important projects, investing more to work with the best people for the job tends to save money in the long run. After all, having the peace of mind that your product is being built by a dedicated team of A-players, who have worked on similar projects before, is priceless.
With that being said, it’s important to assess what’s being baked into the cost of the entire project. Paying extra for advanced tools, fast support, after delivery training, and a dedicated team is likely worth the investment.
Testimonials
Get the full story before you sign-on to work with any digital product studio. Ask former clients directly by calling them up or chat over email, look for reviews on sites like Clutch, or check out the work they have submitted on Dribble and GitHub. Taking time to check references and review past work will give you a really good idea about what to expect before getting too committed.
We also recommend looking at their social media to get an idea about company culture, as well as Glassdoor to assess working conditions. Glassdoors reviews should be taken as seriously as customer reviews when picking a long-term partner.
The criteria above will help your company shortlist a handful of digital product studios. Once you have boiled the list down to a few, here are some specific questions you can send the digital product studio to collect additional information that will help you make your final decision:
How many projects is your company taking on right now?
Who will be working on this project?
Which roles in the team are dedicated to only our company projects versus which roles are shared across other projects from different companies?
Is all the work handled in-house or are you outsourcing parts?
How much time will my internal team need to devote to you in a day/week/month?
Which time zones does your team operate in?
Will my team need to start using different tools or will your team make the adjustments?
Here are some other common questions include:
Once the vetting process is complete and you have selected the digital product studio, how can you best prepare to start working? Here is a list of questions a digital product studio might ask you to answer. Answering some or all of these questions will help your project get off to a running start:
What is the problem you are solving?
Why are you taking on this project?
How far are you into the process?
What are your goals for this project?
What does our involvement look like?
Who will we be working with on your team?
Other questions digital product studios often have in regards to the engagement:
Engagement
Timelines
Budget & Estimates
Logistics
With so many up-and-coming digital product studios to choose from, why should you consider partnering with Crowdlinker on your next project?
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Team of A-players
We work collaboratively in small cross-functional teams, bringing the expertise of each team member to the project.
Balance between strategy, design, and technology
Get all the expertise you need under one roof. Retain learnings from each stage, have smoother hand-offs, and work with the same team throughout the project.
A true extension of your team
Partnering with Crowdlinker is like working with an internal team rather than a vendor. Working harmoniously with your processes, tools, and people is very important to us.
Passion for the project
Where most agencies go wrong is that they try to solve complex problems before understanding them. Crowdlinker takes the time to understand the situation, and only then evaluates if our services are even needed.
Digital product studio is a fluid term that means different things to different people. We hope our content above gives you an idea of how we define what a digital product studio is, why they exist, and how they can help you reach your goals. We also hope this content has opened your eyes to the opportunities that exist by partnering with a digital product studio. And lastly, how you can vet, interview, choose a digital product studio to work with.
