Are you afraid that building a new application will end in a costly failure, exceeding the budget and failing to meet market needs? Instead of cutting developer rates, there is a strategic way to reduce the cost of application development while minimizing market risk. This article explains what Product Discovery is and why a well-conducted discovery phase in an IT project is the foundation of success. You will learn how conscious product discovery before coding begins directly protects your investment and ensures that you are building a solution that users truly need.
Table of contents
Introduction
2. How to reduce application development costs with the discovery phase?
3. The stages of product discovery: A step-by-step guide
4. Product workshops (discovery workshops) – The heart of the discovery process
Introduction
In the dynamic digital world, where every technology investment must yield a measurable return, operations and product directors face a fundamental challenge: how to ensure that application development ends in success and does not become a costly failure? The statistics are relentless – a significant portion of IT projects exceed their budget, are delayed, or, worse, deliver a product that no one wants to use. The key question that keeps business leaders awake at night is: how to reduce the cost of application development while minimizing market risk? The answer, although it may seem counterintuitive, does not lie in cutting developer rates, but in a strategic and conscious approach to the very beginning of the project. This approach is Product Discovery.
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In this article, we will thoroughly analyze what Product Discovery is, why it forms the absolute foundation of the modern application development process, and how a well-conducted discovery phase in an IT project directly translates into cost optimization, a precise definition of the MVP (Minimum Viable Product), and the ultimate success of the product on the market.
What is product discovery and why is it crucial in the application development process?
Many managers equate the software development process mainly with the development phase – writing code. This is a mistake that generates huge, unnecessary costs. Before the first developer writes a line of code, a process of fundamental strategic importance must take place: product discovery.
The definition of product discovery: More than market research
Answering the question, what is Product Discovery, requires going far beyond the definition of standard market research. It is an intensive, iterative, and interdisciplinary process aimed at deeply understanding and validating the problem the application is intended to solve, as well as defining the target audience and their real needs. Unlike passive analysis, Product Discovery is an active search for answers to key questions:
- Does the problem we want to solve actually exist and is it painful enough for users?
- Who are our target users, and what are their pain points, motivations, and the context of product use?
- What solution will bring them the most value, and are they willing to pay for it (with time or money)?
- Are we able to build this solution within our available resources (technological, human, financial)?
Product Discovery is a process of reducing uncertainty. It is a conscious investment of a small part of the budget at the beginning to ensure that the main part of the investment (development) will be allocated to building the right product, in the right way, and for the right people.
The discovery phase in an IT project as the foundation for success
Let's imagine building an application as constructing a skyscraper. Would any sensible investor begin construction work without precise architectural plans, soil analysis, and detailed installation designs? Of course not. The discovery phase in an IT project is exactly that – the digital equivalent of architectural and engineering work.
Skipping this stage and moving straight to development is like digging foundations on a hit-or-miss basis. This results in chaos, constant changes in requirements, team frustration, and, most importantly from a COO's perspective, rapidly increasing costs. Every change made during the coding stage is many times more expensive than changing the concept at the "on paper" design stage (or in digital prototypes).
Investing in a solid discovery phase is the most important optimization decision in the entire application development process. It creates a solid foundation on which the development team can build the product efficiently and effectively, confident that every element they create has a business justification and addresses a real user need.
How to reduce application development costs with the discovery phase?
The question "how to reduce the cost of application development" is one of the most frequently asked in the context of technology projects. The Product Discovery phase provides concrete, systemic answers to it. Its impact on budget optimization is multidimensional and stems directly from the results it delivers.
Eliminating unnecessary features and focusing on the MVP
One of the biggest budget eaters in software projects is "feature creep" – the tendency to uncontrollably add more and more new features, often based on assumptions rather than hard data. Product Discovery allows you to brutally verify which features are absolutely crucial and which are just "nice-to-haves".
The result of this process is a precise definition of the MVP (Minimum Viable Product). An MVP is not a demo version or a low-quality product. It is the smallest version of a product that can deliver key value to the first group of users (early adopters) and allow for the collection of real market data. Focusing on building an MVP instead of a "complete" product right away brings huge savings. Instead of building 15 features over 12 months, we build the 3 most important features in 3 months, launch them on the market, and learn from the feedback of real users. This approach drastically shortens the time-to-market and allows further product development to be guided by data, not the management's intuition.
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Precise budget and timeline estimation
For a COO, unpredictability is enemy number one. IT projects without a discovery phase are notorious for underestimated budgets and unrealistic timelines. This is because without a deep understanding of the scope, technological complexity, and priorities, any estimation is pure guesswork.
Product Discovery provides the development team with the artifacts necessary to create a reliable cost estimate. After this phase is completed, we have:
- A defined product vision and business goals.
- Defined user personas and their user journeys.
- A prioritized feature list (backlog) for the MVP and further iterations.
- Preliminary mockups or interactive prototypes.
- A preliminary technological and architectural analysis.
Only with such a package of information is the team able to estimate the effort, identify technical risks, and present a timeline that has a solid foundation. This gives management control over the budget and real predictability of the investment.
Reducing the risk of costly changes during development
Brooks's Law states that "adding manpower to a late software project makes it later". A similar thing can be said about changes during development. Changing requirements when the product is already in the coding phase is extremely costly. It requires not only writing new code but often rebuilding existing elements, reverting work, conducting re-tests, and updating documentation. This generates chaos, demotivates the team, and drains the budget.
The Product Discovery phase shifts the moment of making key decisions and validating ideas to the very beginning of the application development process. Changing a concept at the prototype stage in Figma costs a designer's hours of work. The same change in a working application can cost weeks of work for the entire development team. By investing time in upfront discovery, we minimize the risk of realizing halfway through the project that "we are building the wrong thing" and being forced to make costly pivots.
The stages of product discovery: A step-by-step guide
Product Discovery is not a one-time event, but a structured process. Although its form may vary depending on the project's specifics, it usually includes several key stages that together form a cohesive whole. Understanding these steps allows business leaders to better manage the process and assess its maturity.
Step 1: Defining business goals and the user problem
Everything starts with "why". Before we start thinking about "what" and "how" to build, we must precisely define the business goal to be achieved. Is the goal to increase customer retention? Or perhaps to enter a new market or optimize an internal process? The goal must be measurable (e.g., "increase conversion by 15% within 6 months"). In parallel, we define a hypothesis regarding the user's problem. This is a key moment where the business vision meets empathy for the customer.
Step 2: Research and analysis – who is our user?
With hypotheses in hand, we move on to the research phase. The goal is to confirm or refute our assumptions. At this stage, a range of research methods are used, both qualitative (in-depth user interviews, observations) and quantitative (surveys, data analysis). We create user personas – archetypes representing key segments of our target audience. We analyze the competition, not only in terms of the features offered, but above all, the business model and the way they communicate value. The result is a panoramic view of the market and a deep understanding of the context in which our product will operate.
Step 3: Ideation and prioritization – from idea to strategy
Once we know "for whom" and "why" we are creating the product, it's time for "what" and "in what order". This stage is often a series of brainstorming sessions and workshops (more on these in a moment), during which ideas for features and solutions are generated. The key is not to stop at generating ideas but to move on to prioritizing them. Various frameworks are used here, such as MoSCoW (Must have, Should have, Could have, Won't have) or User Story Mapping. The goal is to create an ordered list of tasks (a backlog) that clearly defines the scope of the MVP (Minimum Viable Product).
Step 4: Prototyping and validation – rapid hypothesis testing
This is the stage where ideas take on a visual form, but still without writing any code. We create prototypes – from simple, hand-drawn sketches (lo-fi) to clickable, interactive mockups (hi-fi) that look and behave like a real application. These prototypes are then presented to real users during usability testing sessions. We observe how they interact with the design, what is clear to them, and what causes difficulty. The feedback gathered at this stage is invaluable. It allows for quick and cheap iterations, improving the concept and ensuring that the final product will be intuitive and user-friendly, even before the first line of code is written.
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Product workshops (discovery workshops) – The heart of the discovery process
The brain of the Product Discovery operation is the product workshop, often called a discovery workshop. These are intensive, moderated sessions that are both the culmination and the driving engine of the entire process. It is during these sessions that theory meets practice, and scattered information is synthesized into a concrete action plan.
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What are discovery workshops and why are they worth organizing before application development?
Discovery workshops before application development are structured, most often 1-3 day meetings, in which key project stakeholders participate. Their goal is to collaboratively work through all key aspects of the product in a concentrated period of time. Instead of weeks of email exchanges and endless meetings in small groups, workshops allow for instantly aligning knowledge, clashing different perspectives (business, technological, user), and making key decisions in one place and time. They are a powerful tool for building shared understanding and commitment to the project. The energy and synergy created during well-run workshops are impossible to achieve in any other way.
Who should participate in product workshops?
The success of a workshop depends on the composition of the participants. It is crucial to involve decision-makers and individuals with knowledge from various areas of the organization. A typical workshop team includes:
- Project Sponsors / C-level executives: (e.g., CEO, COO, CPO) – people responsible for strategy and budget, ensuring the product aligns with company goals.
- Product Owner / Product Manager: the person who will manage the backlog and product development on a daily basis.
- Domain Experts: employees who have in-depth knowledge of the processes the application is meant to support (e.g., the head of logistics if we are building a WMS system).
- Marketing and sales representatives: people who understand the market, the customer, and know how the product will be positioned and sold.
- Technical Lead / Software Architect: the person responsible for assessing technical feasibility, choosing technology, and designing the architecture.
- UX/UI Designer: the person who will be responsible for the user experience and graphical interface.
Such an interdisciplinary team ensures that the product will be analyzed from every possible perspective.
Sample agenda and key workshop outcomes
Although the agenda is always tailored to the project, a typical product workshop may include the following modules:
- Day 1: Strategy and User. Jointly defining business goals, KPIs, competitor analysis, creating user personas, and mapping their paths (Customer Journey Mapping).
- Day 2: Solution and Priorities. Brainstorming functionalities, grouping ideas, and then prioritizing using techniques like User Story Mapping to define the MVP scope.
- Day 3: Technology and Action Plan. Discussion of non-functional requirements, technology stack selection, risk identification, and creation of a preliminary timeline (roadmap) for the development phase.
The key, tangible outcomes that the company leaves the workshop with include a Product Vision document, defined personas, a prioritized product backlog ready for the development team, and above all – a shared, deep understanding of the product by all stakeholders.
Summary
Investing in Product Discovery is the most effective known way to reduce the cost of application development and simultaneously maximize its chances of market success. It is a strategic shift in thinking – a move away from perceiving development as a cost to treating it as an investment that must be preceded by solid analysis and validation. For a COO and a product director, the discovery phase in an IT project is not an optional extra, but a key tool for risk management, budget optimization, and ensuring predictability in the application development process.
By investing time and relatively small funds in product workshops and a deep understanding of the problem, we gain confidence that the millions allocated for application development will be spent on creating a product that makes business sense, is technologically sound, and, most importantly, has real value for the end user. Skipping this stage is the easiest way to join the ranks of companies whose ambitious technology projects became merely a costly lesson in what not to do.
