The Ultimate Guide to Product Discovery

Tobi Moyela

Agile Product Development

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A research-driven approach to product development ensures finished SaaS applications get optimal user traffic, conversions, and engagement. What kind of research helps you achieve such results? Two words – Product Discovery. Product discovery is a key step in SaaS product development that helps you understand user needs so you can tailor your product to satisfy those needs and win over your target audience. Keep reading to understand product discovery better, its importance, and how to do it.

What is product discovery?

Product discovery is an essential part of product development that involves researching users and analyzing findings to validate product ideas. The product discovery process helps ensure that your final product can satisfy your target market’s needs and desires.

Typically, product discovery requires a development team to perform market research, user interviews, and competitor analysis. The research will reveal user pain points, preferences, and opportunities. Your development team can then use insights from the research to brainstorm product ideas to solve real user problems and deliver value.

Product teams will have a harder time making well-informed decisions regarding what to build and feature prioritization without product discovery. Also, skipping product discovery increases the risk of building a product that doesn’t align with customer needs or market demands.

In summary, a product development process that includes product discovery is more likely to yield a product that target users will find useful and valuable. Why? Because developers crafted and tailored the product to resolve real user problems identified through systematic research.

Why is product discovery important?

Having a great product idea isn’t enough. Your idea must undergo a feasibility test to verify there’s actually a market for it. Otherwise, you risk wasting time and money building a product nobody wants. For this reason, every SaaS product development must include product discovery.

The goal of product discovery is to fully understand user pain points, preferences, and behavior through research. You can then leverage insights from your research to guide your SaaS product design and development processes.

With an understanding of your target market’s pain points and preferences, you become equipped to create a SaaS product that resonates with customers and adds value to your business. Your final product fits this description if it has desirable, high-value features that solve existing user problems. Target users will gravitate toward such a product because it can improve and add value to their lives. A product that attracts and engages more users will be highly profitable for your business.

8 benefits of product discovery

Now that you understand what product discovery is, let’s take a closer look at the many benefits you can expect from incorporating it into your product development process.

8 benefits of product discovery

1. Create user-centric solutions

A user-centric solution is a product optimized to resolve customer needs and fit user preferences. A product tailored to match users’ value and functionality expectations is crucial because anything less will struggle to attract and retain users. In fact, 90% of users quit using a digital product due to poor performance. Even worse, 13% of customers will tell at least 15 people about a product with bad user experience.

With product discovery, you can gain vital information regarding user needs, pain points, and behaviors. You can use this information to create a user-centric final product that resonates with your target users and resolves their real-world problems. Such a product will sell better with higher conversion and engagement rates.

2. Reduce risk

Research during product discovery will help you weigh your product ideas against your target users’ realistic expectations and needs. A product idea that can’t meet your users’ expectations or realistically solve their problems isn’t worth building because finding buyers will be a problem.

In summary, product discovery minimizes the risk of investing time, money, and other costly resources into building products or features nobody wants. It ensures that you only invest your scarce resources into building products with the highest likelihood of succeeding.

3. Greater innovation

Product discovery fuels creativity and innovation. How? Customers constantly evolve, and as they evolve, so do their needs and expectations. Product discovery will keep you updated about changes in customer needs and behaviors so you can innovate new product ideas to satisfy them. Innovative businesses have an edge over competitors because, as pioneers, they get to corner market share before competitors can pose a threat.

4. Cost savings

Since product discovery reveals what customers want, you can create a product that matches those specifications. This helps you save money in several ways. Firstly, you avoid the expense of investing in building a product no one wants. Secondly, you can avoid adding features that complicate or impede product performance. Fixing such product errors after development costs 100x more than fixing them before development.

5. Better earnings

A better product generates better earnings. According to Forrester Research, a well-planned and frictionless user experience design can boost customer conversion by 400%. Also, every dollar spent on user experience can yield up to $100 in returns, meaning an ROI of 9,900%. This implies that user research during product discovery is worth every penny because it ensures you launch a user-optimized product.

6. Faster time to market

Product discovery may be an additional step during product design and development, but it actually reduces your time-to-market. It accomplishes this by giving your product team a clear path to follow to complete development. How? Since discovery tells you what users want, you can focus on building features that meet those needs. You won’t waste time building unnecessary features or waste extra time removing or reworking those unneeded features later.

7. Enhanced user engagement and loyalty

Products birthed from thorough discovery processes have a higher chance of meeting user expectations. This happens because the product team operated with a user-centric mindset and built the product to match user needs. Products that meet or exceed user expectations typically have more satisfied users, leading to enhanced user engagement and loyalty.

Engaged and loyal customers have a higher lifetime value, leading to increased business profitability. Also, 23% of people who have a positive experience with a product will tell ten or more people, generating more brand visibility.

8. Continuous improvement

Product discovery facilitates agile product development, which involves creating prototypes and testing iterations. You will test your iterations with real users and get valuable feedback that you can implement to improve your product continuously until it’s market-ready.

Even after launching your new product, you can perform ongoing discovery to gather feedback, monitor user behavior, and make continuous improvements. Following this strategy will help you keep your product relevant and capable of satisfying user needs as they evolve.

Product discovery process in 9 steps

As we’ve shown, proper product discovery can shorten your product delivery timeframe. However, you’ll only experience this benefit and the other upsides of product discovery if you do it correctly. If you are new to product discovery, below is a step-by-step guide on how to do it.

Product discovery process in 9 stepsProduct discovery process in 9 steps

1. Define user problems

Identify the user problems you want to solve and clearly articulate how you aim to solve them with your product. Start with a problem statement that outlines the identified issue and its impact. This is a crucial step because it will guide your product team toward developing a product or feature that solves the identified user issue.

2. Assemble a cross-functional team

A cross-functional team consists of individuals with different expertise. The members will work collaboratively to help you execute product design, development, and delivery. Depending on your project needs, the team may include software engineers, product managers, UX/UI designers, quality assurance testers, data scientists, and marketing specialists. The important thing is each team member brings a unique perspective and skill to the discovery process to help achieve your stated goals.

3. Market and user research

Many use the terms market research and user research interchangeably, but the concepts actually focus on different things. Market research focuses on investigating the market, competitors, and industry trends. Its goal is to identify potential market gaps/opportunities that you can leverage to your advantage. For example, a feature or market that competitors haven’t explored that you can corner to differentiate your product.

On the other hand, user research focuses on studying and understanding your target customers. It involves conducting customer interviews, surveys, or observations to gain valuable insights into user pain points and behaviors. These are valuable insights for creating a product optimized to deliver value. Lastly, the user research process requires documenting user personas and user journey maps.

4. Idea generation and prioritization

Once you are clear on user problems or needs, you and your team can brainstorm solutions and various approaches to addressing the problem or opportunity. List your ideas, evaluate them to identify the viable ones, and then prioritize them.

Prioritization after ideation is crucial because it helps you focus on building the most valuable features first. Taking this approach prevents focusing resources on building features that won’t bolster your product’s value or attractiveness. Take a scientific approach to prioritizing your ideas by using proven techniques like the ICE framework or the MoSCoW method.

5. Build prototypes or MVPs

Once you have your priority list of feature or product ideas, form clear and testable hypotheses for the ideas on your list. The hypotheses should specify the expected outcomes and metrics to measure success. Forming hypotheses helps make informed decisions by providing a structured way to validate ideas and understand how each idea will impact your final product.

Next, flesh out your ideas by developing low-fidelity prototypes or minimum viable products (MVPs) to test your hypotheses. The lo-fi prototype can be a simple wireframe or a clickable mockup. We recommend testing with low-fidelity prototypes because they are quicker and more cost-effective to build than high-fidelity prototypes.

6. Testing and validation

Test your low-fidelity prototypes by conducting A/B testing or user surveys to validate your hypotheses. Let real users participate in the test so you can get accurate insights into how potential customers feel about your ideas. Relying on only team members to test ideas may lead to biased feedback that doesn’t truly represent or cover user needs and expectations.

7. Iterate and refine

Study the customer feedback from your tests and use it to improve your prototype. Do this by adding requested features and fixing problems mentioned in the user feedback. Keep refining and making iterations of your prototype with user feedback until you have a prototype that fully aligns with user needs. You can then move to high-fidelity prototypes and usability tests to continue testing your product ideas.

8. Documentation and development

Document your entire product discovery process, and the documentation should include user personas, user journeys, prototypes, and results from prototype testing. Your development team should have access to the documentation and leverage it to guide building your product or feature.

9. Monitor and measure

Product discovery doesn’t stop after you launch your product or new feature. Monitor user feedback post-launch to see how customers interact and react to your product. Use the feedback to identify new opportunities or areas of improvement to further optimize your product to deliver value. You can gain even more insights into your product’s performance by monitoring usage data and key performance indicators.

How to prioritize product discoveries

Prioritizing product discoveries is a crucial step in product development and innovation. By focusing on the most valuable and impactful discoveries, you can make efficient use of your resources and ensure that your product meets the needs of your target audience. Here's a step-by-step guide on how to prioritize product discoveries:

Clarify product goals

What problem will your product solve, and what key outcomes do you want to achieve with your product? Your answers to these questions will reveal the goals that will guide your product development process. You can then align your prioritization efforts with the identified goals and objectives.

Collect and document discoveries

Collect and document product discoveries gathered from customer feedback, user research, competitive analysis, market trends, and other sources. Your team should have collective access to the documented discoveries to view, manage, or track any desired information.

Categorize discoveries

Separate and group your discoveries according to their nature, impact, and relevance to your goals. Your discovery groups or categories may include new features or product ideas, usability improvements, feature enhancements, bug fixes, and others. Such categorizations simplify understanding and identifying your discoveries.

Evaluate discoveries

Assess each discovery with criteria, such as impact, feasibility, urgency, and alignment. Impact covers how much value the discovery will bring to your users and business, while feasibility covers whether implementing the discovery is realistic. On the other hand, urgency shows if a discovery is time-sensitive, while alignment reveals if a discovery matches or clashes with your product goals and vision.

Top-priority discoveries will score higher for all criteria. However, if certain criteria are more important to you, it can influence your prioritization. For instance, if you are on a budget and short time frame, you may prioritize discoveries feasible with your available resources over others with a higher impact.

Assign priority scores

A systematic approach to discovery prioritization requires assigning a numerical or relative priority score to each discovery. A systematic approach means you don’t just make up a number. Instead, evaluate each discovery with a scientific method, such as the RICE (Reachability, Impact, Confidence, and Effort) method or the weighted scoring system.

These methods help you assign a value to a discovery. You can then prioritize and rank discoveries according to the ones with the highest or lowest value.

Consider dependencies

Implementing certain discoveries may not be possible until you’ve implemented other discoveries. In such scenarios, you can't put the dependent discoveries first. Otherwise, you could experience bottlenecks during implementation.

Have a roadmap

Create a product roadmap that clearly states when and how you will address your discoveries in order of priority. With such a structured roadmap, you’ll have an easier time communicating your product strategy and timelines to team members and stakeholders.

However, note that prioritized product discoveries aren’t set in stone. New discoveries and changing circumstances may require you to revisit and update your prioritization. As such, be ready to adjust your priorities as user needs and market dynamics evolve.

7 product discovery best practices

Here are our best tips for effective product discovery and making the most of your gathered insights:

7 product discovery best practices

1. User-centered approach

Don’t assume on behalf of your target users. Instead, gain a deep understanding of your users through customer research, interviews, usability tests, and surveys. Your research will help you understand what your users want and prefer, bringing you closer to developing empathy for your users.

User empathy should be at the core of your discovery process because you become open-minded, making it easier to resonate with user pain points and needs. Shorten your path to empathizing with customers by building user personas. A user persona provides a clear picture of your ideal customers and showcases their needs, pain points, desires, wants, goals, and motivations. When you truly understand your users, it’s easier to build a user-centric product that gives them value.

2. Continuous discovery

Continuous discovery involves consistently learning and adapting your development process throughout your product’s life cycle. It’s different from traditional product discovery, which you only do once or periodically, especially at the beginning of a project.

With continuous discovery, you are always learning about your users, ensuring that you stay updated about their evolving needs, preferences, and motivations. Continuously iterating with such information will keep you ahead of the competition and your product forever relevant. Businesses that take this approach have an easier time retaining existing customers and attracting new ones.

3. Personalize the discovery process

Performing product discovery follows certain steps, but nothing stops you from personalizing those steps to match your unique culture, strengths, and shortcomings. Adapting your product discovery process to your team and tailoring it to complement your company’s uniqueness will increase its effectiveness.

For example, tailoring the process to your team’s expertise ensures that you can make better use of your unique strengths and available resources. Also, a personalized discovery process fosters collaboration between team members and boosts their engagement. A fully engaged team leads to higher-quality contributions, resulting in a better final product.

Tailor your discovery process by identifying the methodologies and processes that work best for your company. Fine-tune these processes to meet your project needs and adapt the discovery process to fit your business goals and capabilities.

4. Prioritize customer insights

Yes, product discovery requires performing user research and testing, but the research process isn’t the priority. Your priority is the insights you can gain from your research and tests. So, instead of focusing on conducting several complicated tests, prioritize making each test meaningful. Do this by only running relevant tests that can provide the specific insights you seek.

For example, instead of asking hundreds of rambling questions in customer surveys, keep it short and sweet by asking questions that align with your hypotheses and goals. Such questions will reveal the answers needed to understand users and develop the right product. In summary, product discovery should be about insight quality, not insight quantity.

5. Small-scale testing

As we’ve mentioned, elaborate tests aren’t always necessary. Small tests are viable for collecting quick and relevant insights without exhausting significant resources. You can use such tests to assess new product ideas, new features, UX design updates, or bug fixes that don’t need full-scale testing. The point of such quick-win tests is to validate your hypotheses and determine if your concept is worth developing further.

For example, instead of developing a complex prototype, you can send an email newsletter that describes your idea and asks users if they like it. Their response will determine whether you should proceed, tweak, or abandon your hypotheses.

6. Feedback loops

A feedback loop involves collecting feedback, applying insights from the feedback to development, testing the changes with user feedback, applying the new insights, rinse and repeat. Establishing feedback loops between product discovery and development phases ensures you don’t deviate from creating a customer-centric product. Insights from each feedback loop and discovery should go to your development team so they can leverage it while iterating.

7. Stakeholder involvement

Ensure stakeholders stay updated and engaged throughout the discovery process. Do this by sharing with them regular updates, insights, and findings. If your development team and stakeholders are on the same page, it’ll help maintain alignment and support for the project.

However, presenting product discovery insights will affect how accepting stakeholders will be. You want stakeholders' support for several reasons, including budget approval and fast decision-making. So, keep stakeholders engaged by providing reports and UX presentations with easy-to-understand and actionable information. The information you provide should showcase the value of your product discovery insights. It should also show how implementing the insights will help achieve business goals.

Our high-performing teams handle your entire SaaS product design and development process, including product discovery. Check out our process to see how we can help you build your dream SaaS product.

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