The Power of Product Discovery: Transforming Ideas into Profitable Solutions

Many projects end up with an increased budget, failure due to an insufficient discovery process before launch, and low-end results regarding the service's or product's overall relevance. In most cases, this is due to inadequate planning and haste. Is it possible to reduce the risk of failure? Yes, if you include the product discovery stage in your development process. 

Even the most brilliant idea may not be enough of a foundation for real data to confirm that the project requires further development or initial research. For example, when a company has its own brand, target audience, and high-quality previous products, this does not mean that something new will perform well. Every new service, product introduction, or upgrade requires product discovery. This will provide a holistic analysis in the face of various requests and challenges. 

For example, Netflix has evolved from a DVD rental service to a streaming platform after realizing customers want to access a large amount of content more easily. Slack, a collaboration tool, gained popularity by understanding the pain points of communication in the workplace and developing a platform specifically to address this issue. That's why having the resources to conduct research for your customer base with product discovery is essential.

What do you need to know about Product Discovery? 

Product Discovery is a special data-driven approach to product development. It allows teams to identify customers' main pain points and certain patterns they may encounter. The product discovery phase is one of the most beneficial strategic tools when launching a new service in a market where user feedback is not yet well understood. 

It is also important when the product is at the active growth stage, and the company decides to scale. Therefore, not understanding technical readiness will only lead to increased costs and loss of loyalty. Product Discovery is beneficial when a company has an idea but is unsure which core features or business model to choose for the market. This can lead to an irrelevant product market fit. 

The risk of failure can increase significantly if there is no proof of concept or clear plan. Therefore, product discovery is worth including when significant resources are planned for product delivery. Also, the discovery process is relevant when a business is already on the market but does not have the expected indicators/results. First, it is worth paying attention to what could have caused this: poor UX, low conversion, or low customer loyalty. 

Based on many years of experience, the Artkai team recommends paying attention to certain points when identifying a product.

The most crucial aspect to pay attention to is the product discovery process, especially when an outsourced discovery team is working on your product.

1. Market research 

It should be the basis for data-driven decision-making. When there is a high level of competition, market research will ensure the identification of evidence-based strategies and their construction, thereby avoiding quick, risky decisions related to further potential product development. 

An essential component of comprehensive market research is Target Audience Analysis, which uses the main audience segments through the Customer Persona Framework. Analyzing industry trends can look like using unique platforms like Power BI and Tableau to analyze large-scale data from open resources. 

This is especially relevant when there is a need to identify a niche for innovation and avoid outdated approaches. Undoubtedly, thorough research should include competitor analysis using SWOT analysis, which will ultimately provide value in understanding competitive strengths and weaknesses and allow for the creation of a new product in the market or the global scaling of a new one. 

2. User research

Modernizing a product or creating a new one from scratch should be a customer-centric approach. Conducting various surveys, usability tests, and user interviews are among the best practices for gaining real practical value in the context of discovery. This approach will provide measurable business expectations and, subsequently, results that will be tailored to customer needs. 

Speaking more about the interview process at the discovery stage, this approach involves personal conversations with real users. As a result, you can understand their pain points, workflow, and goals. This data will provide the necessary practical context for the specifics of your business niche because it's clear that you can't get the complete picture from metrics or analytics results alone. 

Interviews in the context of product discovery are conducted by creating individual tasks for the user and Frustration Mapping for effective interaction. In its work with ExtraDuty Solutions, the Artkai team set out to help US law enforcement agencies improve operational efficiency by creating a mobile application to help navigate internal workflows. In the case study ExtraDuty: Merging three systems into one app, we described this in detail. 

Our team emphasized the importance of creating a mobile app based on interviews with stakeholders and competitor analysis. In the end, we integrated and combined various internal platforms into one, solved many UX design issues, and improved the app's functionality. 

To scale up the insights, the survey process will allow us to confirm the results of the interviews and quantify user pain points. The leading indicators to rely on in this part are NPS with loyalty scores and Feature Prioritisation Scores with the identification of the most valuable features. 

This means that at the product discovery stage, you should identify several core values that will guide the entire process in the future. The value proposition should be realized not only for the user but also for the business, its policies, and its requests. 

3. Prototyping

A preliminary product version is created to visualize and test the main functions before full development. Prototyping is also made at the product discovery stage and during proof of concept and development of a minimum viable product. However, it is worth separating these stages because each has different values and levels of complexity. 

In the context of the product discovery process, prototyping can solve many issues, including identifying problems and validating ideas, evaluating the user experience and product interface, and optimizing resources by minimizing risks. 

For example, our team created prototypes for several clients during the discovery phase of product development. One of them was the EHR system of a medical institution that annually served more than 250,000 patients, which we described in detail in our case study. The unique system was designed to enable analytics and reporting processes among employees, to have centralized patient records, and to conduct research for financial accounting and planning effectively. As a result of prototyping for our client, some product features were identified, and it was clearly shown how these problems could be solved. 

As a result of the cooperation, the EHR system was optimized, the accuracy and transfer of confidential patient data were improved, the client's financial turnover increased, and the institution became compatible with external service providers. 

4. Validation and testing 

From the product discovery point of view, product validation and testing are not only a means of shaping the concept in the future but also a mechanism. As a result, the validation process will ensure that the client's expectations and business goals are met and that the overall expectations from the user's point of view are met. 

The main stage of validation and testing is usability analysis, i.e., how convenient it is for the end user to interact with your product and its components: navigation and interfaces. This will allow you to eliminate most UX problems early, reducing the risks of global improvements in further development. 

Collecting customer feedback and actual data about user behavior using heatmaps such as Hotjar or session replays is essential. This also includes User Feedback Sessions, which can be used to systematically collect user feedback on the product and identify pain points. 

5. Product roadmap 

A well-crafted Product Roadmap with a structured plan and a holistic project vision of development is a solid foundation for further work. This high-level strategic document can define the main further stages of development, structure realistic development timelines, define key metrics, and capture the full vision of the product. 

A roadmap is also needed to align stakeholders, plan the necessary resources, and define roles, for example, using a RACI matrix. A professional development team can also include assessed risks in the roadmap to identify complex processes at the initial stages. 

This document is also strategically important to increase transparency, as it will avoid global disagreements between different product teams and project management. 

6. Business Analysis

When choosing an outsourced team to deal with your product, you must consider whether they use business analysis at the discovery stage. After all, for C-level representatives, this aspect addresses many fundamental issues and helps to optimize ROI. 

If a client company chooses to use product discovery, business analysis in this context includes several features, such as assessing business requirements using BRD to formalize them, analyzing competitors and the market, future monetization strategies, and market entry planning. 

Business analysis is an essential tool because it has significant advantages that can influence the global processes of launching a new product or reforming an existing product with specific results that need to be changed. A good finish-line business analysis can assess a product's discovery process, drive revenue, provide insight into the competitive landscape, and optimize further business resources. 

7. Technology stack 

When a realistic vision of the product with its advantages and disadvantages exists, one of the leading indicators is whether the chosen technology stack will meet expectations and results. At the product discovery stage, a software development company should clearly understand potential risks or limitations in future implementation for the client. For company executives, a detailed stack will offer opportunities and prospects for project implementation and the professionalism of the discovery team. 

A successful technology stack should include an analysis of the customer's existing stack with recommendations for integrating new components and infrastructure requirements using AWS or other relevant tools to identify resources and their use. The risk analysis will also predict potential delays associated with security issues or integration complexity. 

For the client company, a high-quality and complete technology stack should be a degree of assurance before making further decisions to meet expectations and efficiency for both parties. 

8. Stakeholder Alignment 

Building stakeholder alignment is necessary for the teams' successful further work, as effective and successful interaction between the client company and the contractor company is an important process during the project. Moreover, comfortable work can lay the foundation for successful further cooperation. 

To make this process comfortable, all project stakeholders at the product discovery stage should align business goals with realistic technical capabilities, set priorities, constantly optimize communication, and work together to minimize risks.

What specialists are needed to implement the discovery phase of a software project successfully

In order for your product to develop organically in the following stages, it is worth consulting technical specialists from different niches who will be involved in further work. 

Based on many years of practical experience, the Artkai team has created A Roadmap to developing a top-notch business app. The roadmap outlines how to create a successful application that will meet business expectations and be a profitable investment.  

Key Benefits of the product discovery

Essential Steps for Product Discovery

Product discovery can vary depending on the industry's specifics. Nevertheless, there are critical stages that guarantee a holistic analysis of your product's further development. 

First of all, the product should be interesting to those who will work on it or develop it because there is interest and high performance when there is demand. To successfully conduct the product discovery phase, our team follows several vital steps: 

Project initiation

This fundamental stage is one of the foundations for further successful product management and development direction. The process begins with initiation when the discovery team contacts the customer to understand their business goals, challenges, and functional and non-functional requirements. At this stage, initial information is gathered, and expectations are set. During this stage, the parties must establish a comfortable working environment for effective communication with stakeholder workshops to gather information and build the Challenges Analysis. 

Research and analysis

In product discovery, it is essential to comprehensively research and analyze the product's target audience to find interaction points and build competitive advantages for your product. The Discovery Artkai team conducts in-depth research and analysis to understand target markets, industry trends, and competitors. Data is collected through market research, user surveys, and competitive analysis to understand user needs, pain points, and gaps in the market.

Our team uses the Customer Journey Map to realize the main points of interaction and SWOT analysis to identify prospects and formulate cost-effective next steps. 

Interviews and workshops with stakeholders

Workshops and interviews with stakeholders are exciting stages in the product discovery process. They allow you to evaluate the relevance of the business and the need for it using real-life examples. The success of this stage lies in the fact that the implementation team holds special sessions with key stakeholders, including business owners, product managers, and subject matter experts. These sessions are designed to gather requirements, agree on preferences, and identify valuable insights to shape the product vision. 

Root Cause Analysis is used to identify the root causes of possible work blocks. The information is then grouped and built into a Stakeholder Alignment Plan to align the work between the teams. 

 User persona 

As a result of multi-level user market research, surveys, and interviews, our teams generate and develop software product ideas during joint workshops and brainstorming sessions. We evaluate a range of concepts, features, and functionalities that meet user needs and business goals. You can build a user persona for your niche to help you create a strategy. 

The persona groups created should be as detailed as possible and focused on real information from previous research. This includes demographic, motivational, and behavioural indicators. Also, depending on the direction of the product, you can divide the personas by technological awareness, communication channels through which they can reach the client, and typical product use cases. 

K-Means Clustering can be used to identify separate segment lines to facilitate the creation and adaptation process. For example, in one project about a Web-based P2P Lending Platform and Marketing Website in the crypto niche, the Artkai team aimed to create a P2P lending platform that attracted more than one hundred thousand active users. 

Even at the product discovery stage, our experts created a customer journey map that considered the omnichannel experience, including mobile, web, physical, and marketing interactions.

Generating ideas and concepts

Our teams generate and develop software product ideas through collaborative workshops and brainstorming sessions. We evaluate a range of concepts, features, and capabilities that meet user needs and business goals. This is also a creative stage, during which many ideas are allowed but are refined through negotiation. Various tools, such as the Business Model Canvas, are used to structure ideas, which is also necessary to identify the core values of the user and customer audiences. 

For example, working with our client, the Artkai team achieved successful results by including the product discovery stage. Our client, Red Rocks Credit Union, which offers quality customer service and competitive loan and deposit products, wanted to realize its mission of a convenient and easy experience for every customer. We described this challenge for the Artkai team in detail in the Financial wellness application. 

Therefore, the task was to create the Red Rocks app — a financial solution for B2B clients. To fulfill the request, our team conducted in-depth industry research, analyzed the target audience's needs in detail, and then started creating a prototype iOS application. 

Testing the idea of creating an app at this stage allowed us to introduce new elements for the user experience, including 400+ screens with combined user flows. The Journey concept required several approaches. 

As a result, the value of the new product was relatively high for both C-level representatives and employees. In particular, it made it possible for managers to achieve the following goals:

For employees, it is possible to: 

To achieve these goals, our team focused on the discovery phase at the beginning of our cooperation. This phase helped us identify the client's goals and needs and implement them in the final product. The product was successfully piloted in the US and then became a prospect for expansion in Europe and the UK.

Prototyping and validation

Prototyping and validation are practical ways to see how the product will interact with the user and whether it meets business goals. The process involves the team creating prototypes or wireframes to visualize the product's user interface and interaction flow. These prototypes are validated through usability testing and collecting feedback from target users to help iterate and refine the product concept. 

Prototypes are created in several ways depending on the main request: Wireframes with basic interface structures, clickable with interactivity to model flows, and high-fidelity with maximum detail. 

Further testing of prototypes will provide a feedback loop from real users and, in the long run, accelerate Time-to-Market with shorter and more automated development cycles. 

Documentation and roadmap 

At the product discovery stage, the finish line should have a roadmap with documentation that holistically describes all further product development and promotion processes with their business evaluation. This will help stakeholders make decisions that focus on the business goal, find ways to optimize resources, and be controlled and transparent in the future. 

For the convenience and accessibility of the formulated conclusions, it is worth creating an interactive dashboard, for example, in Confluence, which will be convenient for editing and possible updating. 

In one of the Artkai team's materials on Initial steps to grow your startup, we used the example of startups to show whether it is possible to launch a product using the discovery phase. Our team's approach is based on building a shared vision first and foremost: During discovery workshops, the teams work with stakeholders to understand the overall business goals and desired outcomes to answer questions such as 'What do we want to achieve?' and 'What does success look like.' 

This approach allows the team to focus on the issues that will significantly impact the outcome (and subsequently on the solution). The team should know what it will measure as it moves forward to understand, for example, whether the solution is moving toward the desired outcome. After completing the stage, the team can recommend the following steps to the customer.

Our experts recommend starting with a 2-hour express workshop, which can determine whether a full-fledged Discovery is necessary or whether the transition to rapid prototyping and testing it with real users is appropriate immediately. 

Missed product discovery phase. The most common risks 

Irrelevant product 

During the discovery phase, you may find the product irrelevant. This can happen when there is a high degree of competition, your solution or a similar one is already on the market, and it will not reach the target audience. 

If you skip the discovery stage, you can bring the project to the final stage, launch it on the market, and realize it is ineffective. Thus, a lot of resources and time are wasted. Indicators at the discovery stage can show what exactly can be a turning point in product demand. Therefore, this is one of the tools that will give a holistic view of whether this development is needed. 

Additional costs 

What else can launching a project give you? Save money. Without a clear plan of what to do, the initial project budget is likely to be exceeded. For example, you might not have considered needing additional labor. Or you might have made too many changes, which resulted in stretching the project schedule. In this scenario, how do you profit and achieve the desired level of ROI? In short, skipping the discovery phase can lead to budget overruns, which is never good.

Endless development cycle with specialist overtime 

This phenomenon, known as scope creep, is a common problem when the number of tasks and overall workload snowballs. This often leads to a project or startup MVP reaching a dead end. If you want to avoid this kind of confusion, the discovery phase of a project can make the situation much easier and less vulnerable. What if the feature is not needed at all? You should reconsider your goals.  

Missed deadlines 

Realizing that the expected deadlines will ultimately be missed without a product discovery phase is essential. 

This is because there was no objective justification for meeting the deadlines. You can push the deadlines indefinitely and speed up the specialists involved, but will it give the expected results? Probably not. It is worth paying attention not only to expectations but also to realistic deadlines, for example, for the design, technical, and financial parts. 

The discovery phase will help the team understand the timeframe for completing specific tasks. It will also outline the complexity and features of particular parts and show their interaction and interdependence. The development process depends on the speed of the resulting design and vice versa. 

Inadequate product quality 

It is clear that quality is lost when everything is done in a hurry. You can work on a product for a long time, constantly creating new necessary features. Still, at some point, you should stop with an endless cycle of improvements and eventually release at least a product MVP, which will also be relevant. 

Therefore, the product discovery stage is intended to present the project to the market in a sufficiently high-quality format but with potential improvements for further releases. 

Conclusions

Why is the discovery phase so important? It allows you to conduct a thorough analysis, investigate the product's relevance to the industry, better understand your target audience and end users, identify bottlenecks, and refine the ideas you are testing. This can save money and other resources and make the development process smoother and more efficient.

For the Artkai team, the discovery process is always accompanied by curiosity and a new flow of ideas and solutions for your business. That's why we are ready to help you align project stakeholders and allocate resources wisely to build your product further.