Countless software products (and the companies behind them) fail every year. The reasons are aplenty: From financial fraud and sudden market cool-offs to more prosaic “we ran out of money” and “no one wanted to buy this” stories.
While there’s no foolproof way to guarantee the absolute success of your software product, there’s one practice that reduces the risks of getting side-tracked during the development stage.
That is the discovery phase of a project.
What is a Project Discovery Phase in Software Development?
The project discovery phase is an initial project planning for goal definition, requirements collection, and business case formalization. The purpose of this stage is to help you evaluate the feasibility of proposed software development approaches, establish the project scope, and address the possible risks.
The discovery phase of a software project also prevents business leaders from being blind-sighted by:
- Poor product-market-fit and subsequent flopped launch
- Overlooked competitive risks and major shifts in customer behavior
- Subpar technology choices, resulting in poor product scalability and high maintenance costs
- Substantial time- and budget overruns, ballooning the software development project costs
Although it’s impossible to plan ahead for every mishap, the project discovery phase in custom software development helps minimize the potential chaos to a manageable minimum.
What Risks Can You Avoid with a Discovery Phase?
By spending at least 10% of the total project time on the project discovery phase, you can avoid the following challenges of new product development:
Weak Business Case Due to Missing Customer and Market Knowledge
The last thing you’d want is realizing that the project isn’t worth pursuing for financial reasons or it may fail to deliver the expected results. The two top reasons why startups fail are “failure to raise cash/reach profitability” (38%) and “no market need” (35%).
Both of these risks can be minimized by opting for a product discovery service from an experienced software development partner. In our case, we provide clients with comprehensive market, competition, and user research prior to putting down software development project plans and help go through product-market-fit validation.
By leveraging user research and market analytics, you can build a data-backed product strategy, featuring a prioritized list of features and list stories for the first product release, as well as a strategic roadmap for subsequent feature maturation.
Problematic Software Architecture Due to Technical Feasibility Gaps
There’s no shortage of hyped technologies and software architecture “best practices”. But most of such advice is generalized, whereas custom software development requires precise expertise with specific types of industries and software products.
For new products, subpar technology choices in the early stages may seem unimportant for the moment. But such decisions can (and likely will) affect you at later stages when the product will be plagued with quality, interoperability, or scalability issues.
Take it from Airbnb. The popular accommodation booking platform was originally designed as a monolith Ruby on Rails application. In the early days, it was a good enough decision. However as the product feature set expanded and more engineers joined the team, the monolith became extremely hard to operate. With new 200 commits deployed to the monolith per day, the engineering team was blocked an average of 15 hours per week due to reverts and rollbacks. The team required several years (from 2016 to 2019) to progressively re-architect the app into service-oriented architecture and then break it down further into microservices.
Poor technology choices also translate to ongoing quality issues: frequent bugs, expensive system maintainability, lagging performance, etc. The overall cost of poor software quality (CPSQ) in the US stands at $2.41 trillion — and most of these funds can be better spent elsewhere.
The bottom line: Spend more time on comprehensive software requirements specification (SRS) document creation, instead of paying multiple times for future quality issues.
Suboptimal Team Composition Due to Limited Tech and User Base Knowledge
When initiating a new project, many companies think they can do it with the current IT staff. But the truth is that your tech workforce may not have the right skill sets. On average, only 39% of organizations rate their IT staff as “very capable” of cloud implementation, management, and operations. Complex cloud migration projects also require a number of ancillary roles ranging from business analysis and DevOps specialists to cloud engineers and solution architects. And even if you have some of those roles present in-house, they are probably already busy with other initiatives.
Likewise, recruiting tech talent is tough in most markets. Globally, organizations struggle to hire AI and ML specialists because of the overwhelming demand for such talent.
Another benefit of doing a software discovery phase with a vendor is that you can receive advice on the optimal team composition: a list of roles and required competencies. The best part? You can get many of these roles filled on a flexible basis through a dedicated team model. This means you don’t have to hire and retain a number of IT professionals for different stages of the project. Instead, you can access the needed competencies on demand. For example, hiring front-end engineers and UX/UI specialists on a temporary basis and retaining more back-end engineers and QA specialists for the long term.
Incomplete Product Roadmap with a Focus on the Wrong Features
Customer demand is fickle. As Steve Jobs once said: “ Our job is to figure out what [customers] are going to want before they do. Our task is to read things that are not yet on the page”.
When it comes to new product development, it’s easy to focus on the wrong features. Instagram did that initially by trying to build a location check-in app. X (then Twitter) pivoted from being a network for finding podcasts to becoming a micro-blogging platform. But startup post-mortems also feature dozens of cases when companies just couldn’t manage to take their product in the right direction and failed to gain market traction.
A good project discovery phase includes in-depth quantitative and qualitative research into the target audience, target market segment, and competitive landscape. It should also include
guided product ideation sessions between your product team, project stakeholders, and the engineering, aimed at ensuring proper feature prioritization for the first release.
Budget Overruns as a Cumulative Result
Ultimately, when you’re not sure what type of solution you want to build and how it should function, you’ll fail to properly budget the project. Developers who work with incomplete requirements will clock in extra hours that could be better spent elsewhere.
Likewise, reworks become more costly at the later stages of the software development cycle. Overseen issues then become technical debt, which is even more expensive to address. A project discovery phase helps better understand the cost structure of the project, identify potential cost drivers and proactively address them.
Key Deliverables from the Product Discovery Phase
Product discovery helps ensure that you’re building the right products for users. But how do you determine what makes a product “right”?
By understanding the target market and ideating on possible solutions. In practice, this translates to a number of steps and deliverables you get from a product discovery service.
1. Project Initiation and Information Gathering Workshops
The main goal of product discovery is proactive information collection and analysis. The standard approach is scheduling a series of information-gathering meetings or discovery workshops.
A product discovery workshop is a structured conversation between your product team and other project stakeholders. Typically, business analysts lead such workshops. Your goal at this stage is to identify the key business objectives, project goals, and future product requirements.
Using different requirements elicitations and product discovery techniques, your aim is to nail down:
- Functional product requirements and specifications, describing the main product features.
- Non-functional requirements, describing the system quality characteristics such as performance, security, and scalability among others.
- User requirements, describing the standard workflows, main user journeys, and interface elements for different roles.
- Data requirements to support your data management strategy and analytics use cases (if applicable).
At this stage, you should collect all the available internal documentation such as existing tech specifications, API documents, UX research, etc. These will be the pillars of your subsequent research and deliverables.
2. User and Market Research
At this step, the market for direct and potential competitors should be analyzed. Dig deeper into the existing solutions, find out their main advantages and disadvantages, and understand their target customers.
Understanding general market dynamics is important for nailing down the ideal target audience and then drilling down a level deeper to identify the ideal user persona.
Common methods of user search include surveys, 1:1 interviews, usability testing, and user observation studies. All of these help collect qualitative and quantitative information about the users’ needs, preferences, and common behaviors. The goal is to synthesize this data into a set of user personas.
User personas help create the initial story list — a summary of the main actions your users will be able to perform with the help of your solution structured in the form of user stories and potential user journeys.
Having both market and user data is crucial for synthesizing product hypotheses — market assumptions you’d want to test with the product MVP to confirm its viability and product-market fit. Both documents also help shape the product backlog and think through different feature maturation strategies for subsequent releases.
3. Solution Design
To ensure that your software development team has a shared vision and understanding of how the product will work, we suggest you create at least a high-level architecture at the discovery stage.
To do so, you will need to decide on the technology stack, potential integrations with other services, and the deployment environment.
Doing a technical feasibility study helps a lot at this stage. A feasibility study aims to assess whether the proposed solution can be implemented through the evaluation of technical requirements, risks, constraints, and resource availability.
In simpler words: It tells if it’s possible to bring your idea to life in the way you see it.
The obvious advantage of a technical feasibility study is that it helps you align your product idea with the available resources and capabilities of your team. The study also helps evaluate different technologies and determine the optimal tech stack for your project.
At 8allocate, we typically perform:
- Technical requirements analysis with a focus on identifying possible constraints and technology compatibility or interoperability issues.
- Technology assessment — an evaluation of different architecture patterns, frameworks, and tools for the project.
- Resource evaluation aimed at determining the required competencies and roles for the project. We also help staff those roles.
- Cost estimation — an initial cost appraisal of different aspects of the project, including required infrastructure, software development, and maintenance costs.
Technical feasibility studies also often include a risk assessment (like RAID), which highlights a set of factors that can hinder the project’s success.
The deeper you dig into the technology at this stage – the fewer potential problems you will encounter at the development stage. It is recommended to do comprehensive research if the product solves a relatively complicated problem or if the development team has little previous experience with the specific technology. In this case, having an external technology consultant makes the most sense.
4. Wireframing and Prototyping
While reference architecture describes the system’s backend functionality, wireframes help conceptualize the front-end presentation layer.
A wireframe is a schematic representation of a product’s look, feel, and functionality. Low-fidelity wireframes are static, black-and-white drawings, showing the main elements of the app. They’re a great tool for clarifying functional and non-functional requirements and establishing the main user flows.
Creating low-fidelity wireframes is a quick and easy way to validate assumptions, review different design options, and gather feedback from target users and project stakeholders.
A high-fidelity wireframe, also known as a mockup or prototype, presents an interactive version of the product, with actual content, UI layouts, and interaction patterns on display.
Interactive prototypes take more time to create, but they can double as a minimal viable product (MVP) — an asset you can show to possible users, investors, or business partners.
Hi-fi wireframes come in handy when you want to run a final round of tests for UI design. They also help better communicate design specifications to the developers by showing, rather than telling, how different features should work and feel.
5. Product Roadmap and Product Backlog
Once you have all the software requirements specifications pinned down, it’s time to
transcribe them as product backlog items.
A product backlog — a repo of all prioritized features, user stories, and other tasks that must be addressed in each Sprint. Once you’ve set it up, you’re ready to begin new software development.
On a higher planning level, you have two other assets:
- A product roadmap
- A project roadmap
A product roadmap is a great tool to visualize strategic planning. You should include important epics and initiatives and indicate clearly which team will be responsible for what (that’s relevant in cases when you have a distributed development team).
The goal of a product map is to clearly outline the direction of the product; showcase priority levels between different features and map dependencies. This way, you can ensure that everyone on your software development team is aligned on the product’s vision, goals, and priorities.
A project roadmap, in turn, organizes all key project tasks, milestones, and deliverables within a defined timeframe. It helps break the planned bulk of work into more manageable, sequential chunks and align the team on the key objectives in each time period.
A product roadmap sets a strategic direction for the project and shows the product evolution over time. A project roadmap focuses more on the execution part, showing when different tasks and features must be completed.
Conclusion
The discovery phase is a crucial step in any software development project, as it helps to align the expectations of the stakeholders, define the scope and requirements, and plan the budget and timeline. By spending up to 10% of your project development time on discovery, you can avoid many common pitfalls.
The discovery phase is not a one-size-fits-all solution, but a flexible and adaptable process that can be tailored to your specific project needs and goals. Whether you choose to conduct it in-house or outsource it to a professional software development company.
The discovery phase is not an expense, but an investment that will pay off in the long run.
Learn more about the benefits of opting for software development and discovery phase service from 8allocate!
Frequently Asked Questions
Quick Guide to Common Questions
What is the project discovery phase in software development?
The discovery phase is the initial planning stage where business goals, technical feasibility, and user needs are analyzed before development begins. It helps define project scope, assess risks, and ensure alignment with market demand.
Why is the discovery phase important?
Skipping the discovery phase increases the risks of poor product-market fit, scalability issues, and budget overruns. It helps businesses avoid costly mistakes by clarifying requirements, validating ideas, and setting a clear development roadmap.
What risks can the discovery phase help mitigate?
- Weak business case: Prevents investing in a product with no market demand.
- Technical feasibility issues: Ensures the right architecture and tech stack choices for scalability.
- Poor team composition: Identifies skill gaps and helps assemble the right talent.
- Unstructured product roadmap: Prioritizes features based on user needs and market demand.
- Budget overruns: Reduces costly reworks by defining project scope early.
What are the key deliverables from the discovery phase?
- Workshops & research: Stakeholder alignment, user and market research.
- Solution design: Architecture, feasibility analysis, and technical recommendations.
- Wireframing & prototyping: Visual representation of UI/UX for validation.
- Product roadmap & backlog: Prioritized features and strategic execution plan.
How does the discovery phase impact software development costs?
Investing 10% of the total project time in discovery helps reduce long-term expenses by preventing costly changes, improving efficiency, and ensuring well-defined development cycles.
How can 8allocate assist with the discovery phase?
8allocate provides comprehensive product discovery services, including technical feasibility studies, market research, architecture design, and roadmap development. Our approach ensures alignment between business goals and technical execution, reducing project risks.
