Discovery Phase in Software Development: Definition & Process

The discovery phase, also known as the scoping phase or research phase, is the first step in software development. Its main goal is to familiarise the development team with the end user, explain the vision, goals and scope of the project, and identify potential threats.

In this initial stage, the development team diligently researches, collects and analyses project information, planning the entire product development cycle. They focus on assessing the viability, feasibility and usability of the product concept. Requirements are collated, priorities assigned, and a key roadmap is created to show the evolution of the system from idea to launch.

The journey from conceptualisation to finished product involves several complex steps, and this complexity can seem daunting. To combat this, many software development companies conduct discovery phases in which market, business and product analyses are conducted together with you.

Usually, the discovery phase includes:

• Market research
• Customer analysis
• Business planning
• Project scoping
• Idea validation
• Architecture design
  

The importance of a discovery phase in a software development project lies in its ability to save substantial time and money while preventing costly errors.

According to McKinsey, 17% of IT projects are of such poor quality that they result in the failure of the company. Additionally, 45% of projects exceed the estimated budget, 7% experience delays in completion, and, remarkably, 56% deliver less value than initially predicted.

I am confident to say that the discovery phase serves as a proactive measure to mitigate these risks and challenges, ensuring a more efficient, cost-effective, and successful software development process.

The discovery phase helps to prepare the project for the development process. A team of specialists will help you analyse the market, create user personas and build a business plan. They will advise you on the scope of the project, create wireframes and help test it against potential users. The solution architect will help you select the best-suited technology stack.

As the success of the whole project strongly depends on this phase, the discovery stage team should be well-qualified and experienced. Yes, it comes with a price, but it can help you avoid spending a lot more money on an application that nobody will use or just on poorly designed features.

In TeaCode, the composition of the discovery team typically includes a project manager, business analyst, UX/UI designer, and solution architect. However, the specific details may vary depending on the unique requirements of the project.

In my experience, a discovery phase can take from 2 to 12 weeks, depending on the project size and complexity.

Consider a scenario where you wake up with a groundbreaking business idea: to create a revolutionary application with incredible features that solve everyday problems and attract millions of users. Now, with such an exciting concept, what’s the next step?

The discovery phase in the software development process might seem mysterious to many, including some business owners. Despite its seemingly profound and complex nature, it essentially encompasses familiar business processes.

Market Research

Maybe you want to build software for rating places, browsing hotels and restaurants, and leaving opinions. Sounds very useful, but I have to cool down your enthusiasm; there is already an application doing all of that and much more. It’s called TripAdvisor.

Does it mean you need to drop your idea and forget about it? No! You should analyse if it gives potential users something more or different than the competition offers. If you can’t figure out why someone would use your app if they have all the other similar products on the market, unfortunately, you should bury the idea and move on before you invest more time or money in the project without perspective.

I am sorry for such a pessimistic vision, but sometimes, that’s the role of an advisor. However, the product discovery process doesn’t need to look like that. It might happen that there are no similar products on the market and you’ve just found a golden goose, or there are similar products, but you can still offer some unique value, and the idea is worth further investment.

In this case, analysing the competition helps you specify your idea or can be an inspiration for additional features. This involves activities such as reviewing comments on their social media platforms, assessing opinions on the Internet, and examining their landing pages to identify any shortcomings in their applications.

Either way, without proper market and competition analysis during the project discovery phase, you can’t know if your app-to-be has any potential to become a successful product. Competitor research is the very first step not only for software development projects but for any venture, as it’s the best way to analyse your chances, and opportunity to find some great inspiration.

Customer Analysis

After initial market research, you know what you can offer, but you still may not understand who will buy your software project and why they should do that.

While creating any product, it is crucial to understand your target audience. Who are they? What are their needs and desires? What are their problems and joys? What is their financial situation? What are their habits?

All of that will help you develop the best product and market strategies. Application design, set of features, and even used technologies depend on the target group. It also has a huge impact on how you will sell your product, what your monetization mechanism will be and what channels you will use to get to the customers.

Let’s take a look at an example.

When you’re creating a high-end application for purchasing fashionable bags, your audience will most likely use iPhones and care a lot about the application’s UI style. On the other hand, if you’re building software for elderlies to order medications online, they most likely use medium-class Android devices, and UI simplicity is most important for them.

In the first case, you can most likely reach potential users through social media marketing and influencers, while for the second group, you’ll need to use more old-fashioned marketing strategies or reach their relatives and caregivers first.

As you can see, the target audience defines the whole approach to building (and promoting) a software product. This is why it is so important to take care of the discovery stage in the project initiation.

By dedicating time and effort to gain a profound understanding of your app’s users and the obstacles they face, you can offer features and solutions tailored to their needs and preferences. This strategy not only helps avoid expensive changes with time but also reduces the likelihood of making wrong decisions down the line.

In essence, committing to the discovery stage establishes the groundwork for a successful and user-centric app development process. For further insights, explore articles on buyer personas and building a go-to-market strategy.

The right (or wrong) definition of the end-users can determine the app’s success. That’s why I think this is the most important one of all the steps in the product creation process.

Idea Validation

Once you’ve clarified what you want to create and for whom, it’s essential to test your idea with real users before committing resources to app development. This is where the Minimum Viable Product (MVP) proves valuable.

Contrary to common belief, the MVP isn’t merely the simplest version of your app; instead, it serves as a tool or approach to validate your idea. Various types of MVPs can be employed, such as offline services to gauge demand, a brief promotional video, or a landing page with a subscription form. Developing a clickable prototype or a basic app are just two of the numerous ways to verify your concept with real users (I will mention that later).

For further details about MVPs, you can refer to my article on what an MVP is and why it’s essential.

The feedback gathered through the MVP testing process is instrumental in deciding whether it’s prudent to invest in developing the app, even with a few modifications, or if it’s more sensible to abandon the idea if there’s little demand.

Additionally, this feedback provides insights into users’ willingness to pay for your app, valuable information for the next step – building a business strategy. I strongly recommend conducting MVP-driven research before progressing to the next phases of app development.

Business Planning

The next step towards your own application should be business planning. Business analysis helps you establish the business goals for the product and put them in a financial perspective.

The discovery phase business analysis should answer the two questions:

• how much time and money will you (or other investors) put into this project?
• how much money (or other profits) do you (or other beneficiaries) expect to get out of this project, and in what timeframe?

Of course, to answer those questions, you need to figure out a lot of things about the project.

Cost Estimation

During this phase, it’s crucial to have a clear understanding of your app development budget. This awareness enables you to estimate your initial budget and timeline accurately. This might be tricky to do on your own, and I’d suggest asking experts for advice because if you underestimate it, the whole project’s success hangs by a thread.

I’ve discussed certain aspects of budgeting in my article on estimating software development costs (you can also review the costs of building an MVP). Here, I want to emphasise the importance of openly sharing your budget with the developer. Their role is to assist you in allocating it in a way that maximises value. Keep in mind that your contractor has a vested interest in the success of your app, as it signifies a long-term and mutually beneficial collaboration.

Additionally, remember that software development is not the sole expense. Costs for the database, servers, maintenance, ongoing development costs, and marketing are all factors that need to be considered.

ROI Estimation

To estimate the return on investment, you need to figure out how the project will bring you money. In other words, what will its monetization model be? It might be a simple buy to use, where you charge users once before downloading the app, you can decide on a subscription model popular for a SaaS platform or use a more complex mechanism based on advertisers and sponsors. For a more in-depth exploration of monetization models, you can refer to Katarzyna’s, our Head of Marketing, article on the topic. She provides a comprehensive explanation of each model, thoroughly exploring their characteristics, advantages, and drawbacks.

The hardest part (in my opinion) is to estimate how much money you can actually make and in what timeframe. This requires deep knowledge of the market, analysis of similar products, and predictions of the application user base growth.

Proper business analysis helps you understand the risk you’re about to take with your software project. It’s also a good moment to think about external investors, and that’s why Jakub, our CEO, crafted a guide on how to raise funds for your app, outlining the potential involvement of investors. It’s also an opportune time to revalidate if you want to jump into this investment at all. Assuming you do, let’s see what the next steps are.

Software Architecture & Technical Specifications

Now is the opportune moment to contemplate software architecture and technical requirements. Constructing software architecture involves making decisions and compromises, known as trade-offs, where developers carefully weigh various factors against project goals, constraints, and priorities. Striking the perfect balance means navigating competing objectives like performance versus scalability, flexibility versus simplicity, and development time versus maintainability.

The key lies in finding the optimal solution that aligns with the project’s specific needs and constraints. This ensures that the chosen trade-offs result in an architecture that is not only effective and sustainable but also meets the desired goals of the software system. For example, if your aim is to have thousands of users actively using the app simultaneously, your infrastructure must be prepared to deliver a seamless experience.

Considerations also extend to integrations with other tools or APIs that facilitate collaboration between applications. For example, in a travel app where users can purchase airline tickets, integrating with the airline system requires careful planning. Decisions need to be made regarding whether your app will handle the purchase or rely on a third-party solution and how issues or confirmations will be managed.

Additionally, security and legal aspects come into play. The development team defines necessary input and output data, addresses data privacy, and ensures compliance with security regulations. This stage is also the right time to establish a secure hosting environment, be it on-premises, cloud-based, or a hybrid solution. The choice of server size and capacity is crucial, with cloud solutions and serverless options being prevalent in many cases. Keep in mind that the complexity and specificity of integrations, as well as the niche nature of the system, can impact costs.

Project Scoping

At this stage, you should know who your go-to user is, what is the most important thing you offer them, and how you will make money on the product. Now’s time to start diving deeper into the application details and figure out what exactly users can do there.

This phase is vital for the people you bring on board to comprehend your business, objectives, and end-users. They must fully grasp the essence of what you are planning to build to contribute effectively. However, be prepared for your development team to challenge your ideas during this phase (at least, this is what we do). It’s part of the process, and it’s done to ensure that your project aligns with your expectations, your users’ needs, and legal requirements.

During this stage, you and your development partner must also precisely outline the features and functionalities of your app. It involves defining the specific actions a user should take to accomplish a particular task.

Usually, I recommend creating user flows and user stories for everything that users can do in the application. This will be the foundation to build wireframes and, eventually, a prototype that you can test on small user groups (which I strongly recommend doing in this phase of the project timeline).

Why is this stage important?

We create user stories to define what functionalities the application will have and what exactly users can do. Wireframes are the next step. , iIt’s a low-fidelity design already defining what pages (screens) we need, what elements are on each page, and how a user can navigate through them and make use of all the features we prepared. Creating wireframes is designing the whole user experience of our software project. It’s not colourful and pretty yet, but it’s defining the most important layer of the app – functionality.

Well-prepared user stories and wireframes at the point of discovery stage are also a huge help for estimating the project cost, so after having it ready, you can revisit your business plan and check if the expected cost of investment has not changed.

Prototype Development

The next (optional) step of the project discovery phase after creating the wireframes is a clickable prototype. However, it’s crucial to notice that not every software project requires building a prototype. It’s extremely useful in the case of bigger and more complex projects with a larger budget. In the case of smaller ones with limited funding, this step might be skipped.

It’s noteworthy that, at times, prototyping may be incorporated into the design stage of the process, but I find it valuable to mention it here as well. This is the first moment you can check the idea against external users, but my strong recommendation is to discuss the idea over and over again with your friends, family, and coworkers.

To build a prototype, we connect the views with each other in tools like Figma, and as a result, we can see a well-defined user journey. Creating a prototype brings you two values. Most importantly, you can visually represent all the actions end users will perform in the application, which is a great check of the application’s logic and usability.

The second value is that you have a very nice piece of work that can be easily presented to potential investors to gather external funds or to a testing group to gather feedback.

Marketing Activities Planning

Consider planning your initial deployment, marketing strategies, and announcements at this point. Don’t forget about the importance of marketing, as it plays a crucial role in ensuring the success of your software product in the market and increasing its visibility.

No matter how good your app is, if no one knows about it, it won’t generate any profit.

When is the right time to release the app? As soon as it won’t scare the users. I’m a huge advocate of releasing rather sooner than later because I’m a fan of user-driven software development. You not only gather users and have something to show to potential investors, but, most importantly, you have a source of feedback that allows you to create features that people need and not waste money on irrelevant ideas. The sooner you gather feedback about your ideas, the better product you can create.

Every feedback should be analysed and forged into actions. Don’t be afraid to change the planned functionalities. The end-users are the ones who will use it, so they know best. Building a software product is a process of iterations; you mustn’t be afraid of that.

It’s crucial to recognise that the discovery phase of a project is an investment rather than a mere cost. According to Agile principles, no stage, including the discovery phase, is considered fully completed, and it may be revisited in later stages based on the project’s evolving needs.

Our development team’s objective is to grasp both the business and technical requirements of our clients, understanding how the digital product can effectively meet users’ needs. Addressing these aspects early in the development process can lead to long-term cost savings and provide a clear direction for the project management team.

I don’t want this article to be infinite, so you can check another one about how to get through the whole development process, what terms you need to know before starting, and how to get along with the development team.

We know that you might prefer to gather your own software development team or proceed with the development in any other way. That’s why we provide all of the deliverables from the discovery phase in a form that you can just take to a different development team, and they can start coding right away.

Each software house will offer you a bit different outtakes from the project discovery phase because every discovery team uses slightly different tools and approaches. The elements that you can usually expect to see are workshops, user personas, and wireframes. I can tell you a bit about how TeaCode performs the discovery phase and what results we are offering.

The whole discovery phase process is a combination of project managers and product owners workshops and the work of our specialists. We know that this is your idea, and until you explicitly ask us to handle it differently, all the decisions are yours.

We work closely with our clients on workshop sessions. In between the sessions, our specialists work on the analysis and materials, which we discuss together during the workshops. The cycle continues until we gather all the information and documents to start the UI design or the development process.

Below I describe what value our discovery team delivers in each of the product creation areas.

Market

During the project discovery stage, will help you with the competitor research and analyse the markets you want to target.

As a result, you’ll get a list of the most important competitors with information whether your product stands out and what is your unique value proposition.

The competitor research allows us to provide advice for the project scope, what best things you can take from the competition, and which of their weaknesses you can improve in your future product, too.

Target Group

To define the target audience of the application, we like to use user personas.

Target audience definition allows us also to determine the potential size of the user database and how they will be using your software. This is very important for architecture design, maintenance costs estimate, and ROI estimate.

Scoping

Scoping is my favourite part of the project discovery phase because this is when from a bunch of ideas emerges the first product draft. It’s also the part that requires the most workshops and iterations, so prepare to be patient.

As a result of the scoping stage, we deliver user flows and wireframes. Optionally, we can connect the wireframes into a prototype, which is particularly useful if you want to perform tests on an external user group (which is highly recommended).

Scoping is also a place for validating ideas. We can advise you on how to test the idea against the target audience, and we’ll help you draw conclusions from their feedback.

Technical Requirements

It’s the developers that built TeaCode, so technical expertise is the core of our company. We can help you select the best technologies for your project’s needs and design the architecture setup. During the discovery phase, we can also advise you on what is possible, what is easy to develop, and what will be very expensive. In the end, you can get a selection of the features with the best value-to-price score.

Additionally, if your project requires it, our solution architects can create a full database structure design, plan all the API functions and suggest the best 3rd party tools when needed.

However, I’m not a fan of planning the whole project in advance because, in my experience, the project requirements almost always change during the development process, so there is no point in wasting time and money to plan every single detail.

Business Perspective

Finally, we can estimate the entire project development process and the software maintenance costs. Our business analyst will also be able to help you choose the best monetization model for your platform.