How do you balance building a product while finding your market?

Startups don’t die of starvation, they die of indigestion! If you find yourself needing to constantly change your product requirements to satisfy customers and gain the next sale, I offer the following:

You'll need to work with the CEO to define a method of prioritizing customer requests.  Here's something that was used at a prior company.  1st priority change is something that is needed in order to get customers to buy the product at all, or is important to a critical customer.  Something that the customer says, "I like your product, but it doesn't do X, so I won't use it regardless of the price."  2nd priority are items that make the product better and fill a customers need , but there's a work around.  Features that the customer will pay extra for would be in this category.  3rd priority are features are nice to have, but the customer will use the tool without them.  A lot of requests fall in this category.  The customer would like them, will still use the product, but won't pay extra for them.  4th priority are features that customers haven't requested, but may improve the user experience, or make it more efficient from a programming point of view.  You'll want to develop your own list of priorities that match your company goals and capacity.

I think one of the big problems in healthcare is that products don't get this right and eventually become so big that they do a little bit of everything but nothing awesome. I worked in the healthcare space and suffered this exact same problem. It gets messy! I peeked at your website and your platform is generic enough that it seems like it could be deployed anywhere there is a clinician and a patient. There are so many types of facilities (DoD, VA, private hospitals, doctor's offices, skilled nursing facilities, etc) and so many types of clinicians (anesthesiologists, surgeons, pediatricians, etc) that there is ultimately no escaping the one off requests.But there is a difference between finding a customer and finding a market. If Core Product + Feature (A,B) can land a surgery center and Core Product + Feature (C, D) can land a skilled nursing facility are you operating so close to the line that you *have* to take both? If so then it might be on you to bite the bullet and design that flexibility into the codebase as Peter suggests before it's too late. Or do you have the opportunity to dig into the prospective markets and be more strategic? Either way, I vote the bar should be as high for the salesmarketing folks to do that digging as it is for your team to deliver on all these new features.

There is some great stuff here. There is one important thing missing from (nearly) all of the answers you have been given, Dan.

Dan: The most important thing is to decide what type of company you are. If you decide to be a "one-off" company then you must design your revenue model and engineering around that decision. It means getting payed and making for design work, not just sales of the product. Your profit model has to build in profit, on the development side, not just the sale of the product sale. If you decide to be a "shelf goods" company, whether those shelf goods are software or hardware, then your revenue comes from repeated sales or SAAS, not development. By definition you will not take any 'one-off" projects. The third choice is modest customization. In this case, you will be paid for development of customized versions of your product, to cover your costs, but not to make substantial profit. You will have to define what customize you will take on, during your product development stage. It has to be part of your original product definition. Three questions you have to answer, every time you are faced with a product development decision. Is it real? Is it worth it? Can we win? If you answer no, to any of the questions, "You do not do the project!" The hardest to answer is the second question. Putting all your internal costs, including opportunity cost, against any project is difficult. We all want to chase after the next shinny thing. Evaluate how shinny that new thing is, before you chase it. Let me give you two examples. - My company made a hard goods product that used plastic and metal. We were asked, by a potential customer to change the plastic type and plate all the metal. After evaluation we determined that the new plastic would work in our current molds. The plastic cost 2X and the machines would run slower. We also got a cost for having an outside source plate the metal. - We decided not to quote any development costs. We did double our profit, on total cost to make up for what we called the "bother factor". We required a minimum order, so we could run the job economically through our factory. If we got the job, we would be very happy. If we lost it, we were indifferent, as it was plus business and not core to our markets. We won the job. - Same customer came to us with a product idea where we would have to design the product from the ground up. We did not see any other potential customer. - We loaded all development costs into NRE, Non-recurring engineering, charges with profit built in to the NRE. Then we quoted a piece part price with 2X our normal profit, with a minimum order. We won the job. The key in both examples; If we lost the jobs it was OK. Each job disrupted our normal flow of product. We were only willing to accept the disruption, if we made more than then normal profit. The lesson is, decide who you are first. Set up your engineering department around who you want to be. If you are going to customize then have a couple engineers work on customs exclusively and not your standard product. Make sure you stick to who you are and not let customers make the determination for you. If you let your customers decide, in the end, you will have a lot of happy customers and go out of business. Hope this helps.

No real solid generic answer for dealing with clients who want one offs especially given the sparse info provided.. HOWEVER ... one word of caution... when you do a one off for a client watch your IP rights... usually if you do not identify the client winds up with some IP rights to your product and even if its a 5% addition to your code makes future investment or M&A much harder... Net is that you have to maintain all IP even if client volunteers to pay for modifications or development

Dan, I am sure many startups face this issue. Making thoughtful decision is challenging, yet it is the important part of startup progress. Especially difficult to make when you are dealing with various options and  different priorities. 

A simple 2X2 quad chart can be one of the powerful instrument for establishing priorities. Placing “importance” as (low - high) in x axis and difficulties ( low - high) in y axis. 

Very important to engage your CEO and other team members to be part of this exercise and plot the items.

Lower left box items are targeted and easy to kill 

Upper left box items are luxurious items

Upper right box items are strategic items require large investment

Lower right box items are high value with less difficulty  - Quick Wins

From this chart you can easily identify the important features for the product and resolve differing opinions.  Cheers!

Thanks for all the great input and feedback.  Glad to see I'm not alone with the challenge, and plan to use some of the thoughts provided to address it.

That question is kind of astonishing. Sounds like you guys are putting the cart before the horse. How can you build a product when you haven't researched the market? Instead of one-off features and functionalities tacked on like Band-Aids, you guys should've done deep market/ customer/ user research. Clearly, proper research that would've defined the exact product fit with the market has not been done and that's a recipe for disaster.