How We Structure the Discovery Phase

If you think that a breakthrough idea, strict development deadlines, and marketing strategy are all you need to make your product hit the mark – think again.  The reality is, on top of fierce competition and demanding customers,  because their solution has no market fit.

What’s the secret of the lucky 10% of startups that survive? The secret is the “discovery” (or “pre-development”) phase. And this is what I’ll discuss in this blog post.

You’ll learn about the ins and outs of the discovery phase, its process, and how it can make your product more competitive and customer-oriented.

Let’s dive right in.

What Is the Discovery Phase?

The project discovery phase (or stage) is when you analyze the target market, define your product-market fit (need for a product on the market), and gather all the project requirements and goals.

Some people skip the discovery stage, mistakenly considering it to be a waste of time and money. However, this stage helps companies understand their customers better and roll out products that will actually solve their customers’ problems.

As a result, the discovery stage helps organize the development process better and connect your clients’ business goals with their users’ needs.

The Role of the Discovery Stage

First and foremost, the discovery stage is meant to foresee and eliminate risks such as a lack of market demand, unexpected expenses, and the possibility of not being able to pay for them.

Mistakes made during the planning stage are the most expensive to fix later. That’s why the main goals of the discovery stage are to test your ideas and implementation strategies, and optimize development costs and the speed of the product launch.

The discovery stage is suitable for products in any industry and of any complexity. But we’ll explain the process based on our experience in developing a fintech product – an online mortgage platform.

So, again, the discovery stage helps you:

Establish business goals

The discovery stage includes the creation of a product scope, the product’s requirements, and business goals. It’s important to stick to these goals throughout the development process and keep them in mind when making any changes to the product.

Understand what a successful outcome looks like

It’s essential not only to outline the goals of the product, but also to define how many of them will be enough to achieve a successful result. As a business owner, you have to understand what you want to achieve with your product. For example, you can strive to reach 100% of your goals, but even 70% of them might be enough to satisfy your initial requirements.

Carry out user research

You can’t develop a successful product blindly, without knowing your potential users’ needs and wants. For example, when doing market research for an online mortgage platform, the following facts was realized:

When a customer considers a lender, he usually takes into account not only the lender’s reputation and the size of the deposit, mortgage rates and fees, but also the duration of the mortgage process, transparency, and the speed of communication (customers support).

This proves that the quality of the software product matters a lot to a user, as it is the main link between the customer and the service provider.

If the product doesn’t work as expected, the customer will not trust it, no matter how beneficial it is. That is why contemporary applications should also be adapted to the realities of the target region.

For example, in some countries it’s essential to set a premises server, while in others, cloud servers are acceptable. security and legal regulations should also be investigated during the discovery stage.

Map the customer journey

A customer journey map helps you create a product that’s easy to use, identify the main touchpoints that users interact with, and think about what difficulties users might encounter and how to prevent them.

To be successful in the current digital market, even MVPs should be mapped out to the smallest details. If their first contact with an application isn’t satisfactory, a customer will rarely return.

Returning to the example online mortgage application example, the mortgage application process (which is a customer journey) is a core factor in product success and the conversion level. It’s important to analyze why users don’t complete the journey of your product and exactly what is blocking them – whether it’s an inadequate UX/UI or the reluctance of these users to buy.

That’s why this journey should be developed and tested during the discovery stage. It ensures that nothing will prevent the customer from getting to the main goal – receiving a mortgage.

Analyze the competitors

A thorough analysis of your competitors’ strengths and weaknesses is also a vital part of the discovery stage. It helps you find the gap in your industry and understand how your product can fill it. It will also help you to develop your Unique Value Proposition and make your product stand out.

Reasons for the Discovery Phase and Its Benefits

If you still doubt the importance of the discovery phase, here is a brief summary of what you get after it:

1. Fewer expenses and a properly planned budget

2. A better understanding of the scope and goals of your product

3. Knowledge of the pain points and needs of your customers

4. A Unique Value Proposition and defined market positioning

5. The ability to outperform your competitors by learning their weaknesses and making your product better

If you ignore the discovery phase and start development right away, you risk creating a product without a market demand and increase the chances of a product pivot.

Discovery Phase Team: Its Roles and Responsibilities

One factor that influences your product’s success is the team that participates in the discovery stage. The number of specialists on the team depends on the project’s complexity and goals. In my opinion, a team should be formed individually for each client based on two factors:

1. The documentation the client provides, and its accuracy
2. A team on the client’s side and its expertise

Below are the people you’ll want on a typical discovery-phase team:

Project Manager

The project manager is responsible for planning and organizing meetings with the client, taking notes of all the important project details discussed during the meetings, and organizing fruitful cooperation between the product discovery and development team. The Project Manager also prepares all the essential documentation for the discovery stage.

Business Analyst

The BA is responsible for market research and analysis, defining the user pain points and needs, as well as analyzing the product’s market potential and profitability. The Business Analyst also defines and monitors the quality of data metrics and reporting. Also, business analysts define functional and non-functional project requirements and align them with business objectives.

Tech leads

Tech leads communicate closely with the customer, define the product’s technical requirements, create a development approach and sequence, and give estimates on the timeline.

UX/UI designer

The UX designer is responsible for product usability and intuitive navigation. Based on the results of user and product research, the UX designer creates storyboards, sitemaps and process flows, and interface elements. The UI designer focuses on the look and layout of the product and its elements, which together work to ensure that the product is both visually attractive and easy to use.

Solution architect

The Solution Architect is responsible for analyzing the technology environment and the performance, scalability, and maintainability of the product. Solution architects also investigate third-party frameworks and platforms, along with their risks and benefits.

It’s a good practice to involve people with different types of expertise in the discovery process. Their experience and ideas will bring maximum value to your product, as they will analyze it from different perspectives. Before hiring a team, ensure each member has the relevant experience to participate meaningfully in the discovery phase.

The Role of the Discovery Phase in Product Development

The discovery stage is the path from the theoretical concept to factual realization. The discovery stage starts with the understanding, collection, and systematization of the client’s requirements, research on the target audience’s needs, and an analysis of the product benefits for potential users.

Some people think that the discovery stage is part of development. The answer is both yes and no. The discovery phase is the initial stage of product development; however, these two processes can be separated. For example, you can order the discovery stage for one company, but product development in another. If the agency isn’t a good fit for a long-standing cooperation, it’s better to know about it sooner rather than later.

The Discovery Phase Process

We highly recommend that you include a discovery phase as the first step in any project.

Here are the main steps in the discovery phase:

- Forming a discovery stage team that cooperates closely with the customer
- Validating the current data and conducting deep research
- Asking the right questions to discover any pitfalls in advance
- Forming the vision and scope of the future product
- Testing possible changes and solutions
- Creating estimates and timelines, with milestones

The main two questions I’ve encountered when working with customers are:

- When will my product be ready?
- How much will it cost?

Regardless of the complexity of the product and its requirements, the discovery stage includes a complex analysis of the source data.

Usually, it takes from 11 to 21 working days to complete the discovery stage. Apart from a number of documents and specifications, the client also receives answers on the two questions mentioned above.

What You Get After the Discovery Stage

Here is what you’ll end up with after the discovery stage:

A Customer Journey Map – the path that user should take to realize the product goals

Architecture  – a schematic, high-level outline of the dependencies between the main parts of the system infrastructure; the environment and physical layer that a new web application will run in and a list of the cloud provider technologies to be used

Wireframes  – user interface screens based on CJMA clickable prototype  – a prototype based on Wireframes

A user flow diagram  – the path that users should follow

UX/UI concept  – the concept/examples of the future application, based on the wireframe

API integration documentation  – a short specification of all API endpoints required for the new application

Project Backlog  – a breakdown of the work structure needed to develop the application

Project Roadmap –  A project timeline and milestones, with dependencies

A budget and engagement model

Note that this is a standard list that can be changed depending on the existence or absence of technical expertise on the client’s side, the project size, etc.

Also, it’s important to take into account the team on the client’s side, its level of industry knowledge, and its readiness to actively collaborate during the discovery stage.

MVP Milestones and Expected Timeline

One of the main results of an effective discovery stage is a backlog with systemized epics and high-level stories, estimates, milestones, and a timeline.

Another outcome is written recommendations for the task execution sequences, dependencies and risks, and recommendations on the technology stack. Based on this data, it’s possible to define a product development timeline and a production schedule.

As a bonus, we’ve also prepared a list of questions a product owner should ask when choosing a team for the discovery stage.

Q1: Who will take part in the discovery phase? Do the team members have experience in developing such systems?

Team members should have relevant experience in the development of the product you’re working on, as well as specific knowledge about industry and its market trends.

Q2: Are there any third-party integrations? 

Let’s get back to the online mortgage system example. It’s impossible to build a digital mortgage system without integrations. Integration, in this case, is one of the riskiest parts of development. If the development company has established relations with the third-party vendors, it will speed up the development process.

Q3: Is the team experienced in product development for your region?

The team should have solid experience in product development for your region and know its user preferences, regulations, and the specifics of working with third-party vendors.

Q4: How is the future development team formed?

The discovery stage team should be also involved in the software development process. They will have a comprehensive vision of your product, know its scope and requirements, and therefore will have a vision of how to build it. In addition, the level of trust between the team and the customer will be higher, as they will already have worked together and demonstrated their proficiency.

Q5: Should I ask for examples of discovery stage results?

Yes, the company you will work with should present to you the documents they created during the discovery stage. Note that all confidential data should be removed or blurred out (not doing so would violate customer privacy). Pay attention to the structure and accuracy of the documents – this is an indicator of service quality.

Q6: What is the documentation management process? How are the discussions recorded?

The discovery stage is a creative process, as it includes a lot of brainstorming sessions and idea generation. That’s why it’s important to document all details, suggestions, and requirements. The development team should be aware of each detail. If anything is omitted, the whole process may suffer.

Q7: Is there a standard set of documents I have to get after a discovery stage?

This really depends on the development company. We strongly believe that the set of documents you get will be defined individually, depending on the project and requirements.

Q8: How often should the representative of the customer’s team be involved in the discovery phase?

Ideally, at least one person from the client’s side will be actively engaged in the discovery stage. That’s because this person has in-depth knowledge about the product goals and requirements, which will make the discovery stage more effective.

Wrapping Up

During the discovery stage, you build a foundation for your product, which will impact its future success. Discovery helps you define the goals of your product, study the needs of your target audience, analyze the competitors, plan the budget, and come up with a well-planned strategy.