There are three possibilities: Product and business at the same time; business first and product second or product first, business second.

The best answer is that it is situational. If it's a completely new product and it needs a business to support its development and market progress then they should be developed together. Issues like getting feedback from the market to support product development is a business exercise that will drive the product strategy. By the same token, product enhancements and ongoing investement will often be driven or constrained by business realities and market reception. And so in this case the product and business development will happen in lock-step and have the highest liklyehood of succeeding -  all other things being equal.

In the next case, if an entrepreneur starts a business to address an opportunity or a gap in the market, the product required may not yet be properly defined. The business may start, raise capital and employ people with the right skills to help conceive and develop the product. In this case the business has to start first and its inherent strategy tailored to the product development cycle. This is a common scenario nowadays.

In the third case, as is common with backyard inventors say, often products are developed to quite a level of completion without due regard to the business issues that will ultimately govern its acceptance and success. It is likly in such a scenario, that both fail, as a good product needs a good business for it to succeed intoday's world.