The phygital concept merges the digital world with the physical one to take the best experience values of each to create a holistic, immersive and engaging human experience. In the last years, tech startups, temporary organizations where cross-function teams generate and test hypotheses, are becoming increasingly active participants in phygital domain. There is no framework for building phygital solution (products and services) at the fuzzy front-end to address user/customer pains/problems and create value for businesses, and users/customers. In phygital domain the lack of accumulated practices of new product development in startups is a window of opportunity for research. In the research, the authors explored development process of new phygital products in startups, and factors influencing phygital product adoption. The research revealed four-stage human-centered new phygital product development process carried out by startup cross-function teams. At the fuzzy front-end the stages of phygital product development and activities for three categories (managers, designers, engineers) in a startup team were identified and discussed. The six key factors influencing phygital product adoption were identified.