Wave energy has an immense potential to provide clean electricity with almost zero emission, among the many renewable energy resources. While it has a huge potential to cater 10% of the current electricity demand, there are many uncertainties involved in the development of a wave energy converter (WEC). This article discusses those challenges and benefits of a product development process to address them. A winch based point absorber (WBPA) concept being developed at KTH Royal Institute of Technology has been used as reference for all discussions. A systematic design approach provides an effective way to rationalize the project from start to end. The value analysis approach is quite useful in order to eliminate rudimentary functions thereby reducing the cost. The stage gate methods makes the systematic design approach interactive and provides an understanding if a concept must be eliminated or continued with at an early stage in the project. Elements of value analysis approach and stage gate methods have been implemented along side complementing the systematic design approach to outline a design process for the WBPA-WEC. An effort has been made to address the challenges faced in the development of a WBPA-WEC.