The key to properly developing a domain is to ensure it's a useful destination to the people who are ultimately going to use it. Properly developing a domain takes time. Each domain is different and should be approached that way. Individual development efforts vary from one domain to the next, but the following is a typical approach for a domain that receives a fair amount of direct navigation (type-in) traffic and has little to no search engine exposure for pages other than the home page.
In order to properly develop and monetize a domain, we need to figure out what people are expecting to see when they visit the site. During this stage we differentiate between the legitimate site visitor (one that could potentially convert via a future monetization effort) and the curious domainer. Keep in mind that premium domains get quite a bit of traffic from domainers that are just curious where a site is parked. Many of these curious parties may have even landed on the domain after finding it may be offered for sale via one of the major parking/broker sites (i.e. Sedo, Afternic, Moniker Marketplace, etc.).
Once it has been determined how many visitors are legitimately looking for some sort of service from the web site, we need to figure out what is that they want or need. How can we profit from their traffic? By placing a few analytical tools on the site coupled with a handful of simple "best guess" monetization efforts, we can generally identify a great jumping off point for development.
During this phase we evaluate the current environment within the search engines for the search terms relating to the domain we're developing. Mainly we want to know which terms and phrases are producing the largest amount of search volume and what how are our current competitors capitalizing on those terms.
By this point we should have a good feel for what our potential customers are looking for, how we can attract them to our site and how to monetize their visits. Now it's time to lay out the plan for building our web site. The user experience is mapped out during this phase. What features/sections will the site offer? How will the visitor navigate from one area to another?
There's a lot that goes at this this stage - Logo development, graphic design, content writing, database and architecture design and implementation, etc. Then, once we've got all of those individual pieces developed we put them all together and take the fully functional site live.
This phase never ends. Proper site development is not about getting a site up and running and then sitting back and watching the dollars roll in. It's about watching the site closely and making changes/upgrades as needed. How are visitors reacting to the new functionality? How are the search engines seeing us? Is traffic growing? Where is it growing? What keywords are working for us? Which ones aren't? Which monetization efforts are working best? Which ones are under performing? The list goes on and on.
The key to success during this phase is patience. It takes time to get a foothold in the major search engines. The answer to better success during this phase may be more content, different content, more functionality, less functionality or even a complete site overhaul. It's best to be certain about decisions to change during this phase. Acting prematurely can not only cause more work than is necessary, but it can also be damaging to a site's search engine exposure. As smart as those silly little search bots may seem, it does take quite a bit of time for them to truly understand what your site is all about and how to properly deliver it to the person searching.