Abstract Applying the principles of user-centered development (UCD) in software development practice is not straightforward. In technology-push type software product development it is not clear how to match the new product innovation to the future needs of potential future users. Intensive collaboration between different organizational functions becomes essential. UCD provides valuable tools and practices as learning mechanisms both for users and for the company. The purpose of cross-functional interaction is to iteratively define the best possible market for the emerging new product. This study investigates cross-functional interaction during the early phases of a new software product. The roots of UCD are in traditional software engineering (SE). However, in a software product company it is necessary to take a broader new product development (NPD) perspective. The results indicate that the early phases of software NPD are actually a collaborative learning process in which representations of the new product are built iteratively, increasing multidisciplinary knowledge related to the evolving shared object of development. The cross-functionally shared object is more than the new software product. It is an emerging new vision for the whole new business area. Both the product and its users-customers-market develop iteratively. Traditionally this is considered to happen through communication within a cross-functional NPD team. Rather than one cross-functional team effort, software NPD seems to be a network of cross-functional activities. Furthermore, in software NPD practice the development of the new business unit may actually overlay the more established business organization. This has not been visible enough, and part of the problems with cross-functional interaction may be due to confusion between these two activity systems during every-day practices. Different mediating representations of the multidimensional object knowledge become crucial. The study starts with a summary of a three-year process improvement effort in one case company, providing the basis for theoretical reflections and analytical generalizations. SE and NPD literature is reviewed to situate the case within current theoretical understanding. The findings are synthesized using concepts from cultural-historical activity theory. This study will hopefully provoke the rethinking of some of the current taken-for-granted issues related to the management of new emerging software product businesses.