Discovery Phase in Software Product Development: Why Do Startups Need It?

According to McKinsey, 45% of software development projects exceed their estimated budget. For a startup, the road to success is a long and winding one, and a budget overrun or failure to meet delivery deadlines could be a fatal blow. What can you do to mitigate those risks for your startup?

Over 14 years of working with startups at Unicsoft, we’ve analyzed more than 50 cases, and we’re convinced:
skipping the initial phase of planning and detailed estimation is among the leading causes of failure in startups.

Our hands-on experience and client success stories prove that your software development project is far more likely to succeed with the right start. Fortunately, strategies and instruments exist to prevent putting your startup in jeopardy. Of course, there’s no panacea, but we can greatly ease your burden as a business owner and help you complete your project on time and within budget. We call it the discovery phase.

Trust us, it’s not about adding extra services to the bill. We care about our partners and provide consulting for startups to support their sustainable growth. Our recommendations are based on real-life cases of successful project delivery. And here’s what we’ve learned along the way.

What’s a Discovery Phase in Terms of Software Development?

The discovery phase is the first stage of software development. It involves the project team and top managers working together to collect and produce essential data, elicit product architecture, the functional and non-functional requirements, choose a stack, estimate costs and plan project development. At this stage, we ensure every team member is 100% on the same page and that ideas will be developed in the most efficient and cost-effective way and that we’ve discovered and accounted for any unknowns from the outset.

The project team is involved during the whole project development lifecycle, starting with discovery. Depending on the nature of your product, the team may include a business analyst, РМ and Scrum Master, solution architect, UI/UX designer, web developers, mobile developers, machine learning/AI tech leads, blockchain tech leads, etc.

The project discovery phase helps reduce risks and minimize costs, as well as ensure the product is a technologically perfect fit for the market.
Let’s define the goals of the discovery phase in software development.

Fundamental goals:

• Work out the architecture and functionality to be implemented. In terms of software development, this is a critical objective of the discovery phase. At this step, essential functionality points are defined, while all redundant or excess elements are laid aside. That’s where working with seasoned professionals really pays off.
• Produce a detailed project cost estimate. Once the essentials of a software product are clearly laid out, it’s possible to evaluate the project’s budget. Software development is a complex process. It’s very difficult to estimate project costs and development timelines without careful analysis of the general concept, business situation, objectives, technical details, and requirements. When you take time in the beginning and gather all project details in one place to see the maximum possible final cost, hidden expenses and risks become visible. This way, you won’t have to deal with unplanned costs nor over-budgeting.

A clearly defined scope of work is the main deliverable of project discovery, how and in what order it will be done, how long it will take, and what resources and people you need for project delivery. The project team, as well as clients, upper management, and marketing teams, can all use those guidelines to make critical decisions.

Here are some of the deliverables you can expect to produce in the agile discovery phase:

• Solution vision document
• Software Requirements Specification
• Architecture design
• UX wireframe design
• Release plan and detailed cost estimate
• Risk assessment and mitigation plan
• Prototype
• Legacy code review with recommendations for improvement

To better illustrate the importance of the discovery process, let us give you a quick rundown of the activities it entails.

What activities are included in the project discovery phase?

Once in the discovery phase of your project, we work with meticulous care here at Unicsoft. We’ve built a solid process over the years, and it works for our clients and us every time. The steps aren’t carved in stone, but we recommend following them for the best results.

1. Free consultation

This initial phase of our communication is crucial, and we’ll do our best to provide as much value as possible. We’ll analyze your business plan, define the project’s strengths and weaknesses, evaluate the market and competition, map the user journeys, and plot the right course to your goals.

There are a few bases we need to cover:

• What is the mission of your software project? What unique value does it bring to the market?
• Who is your target audience, and how can you best cater to their needs?
• What are the business metrics of your project’s success?
• What is your competition in the market, if any?
• What features and interface do you want?
• What technologies should be used?

There may be other topics on the agenda, but the idea is to fully understand the project and make sure we’re on the same page as to what we want to achieve. By the way, doing user research is only half the work here. It’s equally important to visualize the data, so everyone can make sense of it. Stakeholders love it.

The effort we invest in this phase will result in a preliminary estimate for your project.

2. Artifacts analysis

It’s unlikely that your project is a clean slate at this point, so we’ll want to take a good look at everything you have created so far. This includes documentation on the project’s vision, requirements and processes, as well as any legacy code you might have. We’re not being nosey — as partners, we both need a starting point so we can move forward with confidence.

3. Legacy code review

You might be wondering: why is this worth a special mention? Because writing great code is an art, and we need to build on the work of the artists before us. It isn’t about disparaging other people’s work; we want this project to have a strong foundation, and sometimes that means picking things apart first. Our development team will provide their qualified, unbiased feedback. By eliminating errors and imperfections, we can mitigate future development risks and make sure you get a product that combines stability and great performance.

4. Workshop

It’s time for you to meet the team and work with our experts. We’ll join forces to transform your business goals into actionable project items, as well as create a detailed release plan. First, we’ll need to scrutinize your business goals and map your ideas onto the technology of choice. Then we’ll define use cases and user interactions, so we can move on to specifying system and user requirements. There’s a lot of work to do and, as a result, we’ll produce the following deliverables:

• Vision documentation and workshop notes
• User stories with a high-level description
• Architecture design, UI/UX designer ideas & recommendations
• Description of functional requirements
• User stories with acceptance criteria
• Use cases
• Wireframe design
• Release plan

Let’s strategize and dive into specifics together.

5. UI/UX design

During this step, we’ll create wireframes — schematic representations of your future web or mobile app’s design. You’ll be able to see the structure of your product and get a better idea of the kind of user experience it will deliver. The main screens, navigation and general logic will all become apparent at this stage. Of course, our experts will be open to suggestions and feedback so that the MVP (Minimum Viable Product) or prototype meets your expectations.

6. Prototyping/Proof of Concept

A Proof of Concept (POC) is a version of your future product with very limited functionality — an assurance that it can, indeed, be built using the chosen technology to serve its purpose. Thanks to a POC, your key stakeholders (investors, partners) will see that building the product is technically feasible.

A prototype is focused on the product’s look and feel; it’s more about the intricacies of the design and the usability of the app. It is generally built to show your stakeholders how users will interact with the application.

7. Architecture

At this stage we need to lay the foundation; produce the blueprint our team will use to build your product. This is the time to make choices concerning the technologies we’ll utilize, the structural elements of the product and their internal relations. Choosing the right infrastructure architecture is critical, and any deviations or changes later may incur significant costs.

8. Software requirements specification (SRS)

Why do you need an SRS document? Because no project would survive without one. Here are some of the things a typical SRS covers:

• Defines the purpose and scope of the project
• Describes the product’s features and interface
• Clearly lists all of the functional and non-functional requirements
• Coordinates efforts of various teams

Simply put, an SRS document is a binding agreement between the stakeholders and a guiding light for future project managers to follow.

9. Planning

We now have a very good understanding of what our destination is, what technical means we’ll need to reach it and how we’ll use them. In this closing step of the discovery process, we are going to summarize our findings and create a detailed outline to manage time, budgets, human resources and possible risks. As soon as we have our plan, the project is a go.

Now that you know all the ins and outs of product discovery, you wouldn’t even dream of skipping it, right?

So Why Is It Best to Begin with Discovery?

Even if you have a very detailed business plan for your idea, chances are you haven’t included all of the possible risks, technical details and requirements. And consider this: with today’s exponential growth of data, market research and analysis require more time and effort than ever.

So, instead of trying to be a jack of all trades, why not use some professional help? An experienced project team can offer a more in-depth vision, explore risks better, and suggest more effective solutions for your project due to their diverse expertise and knowledge of the industry.

As they say, the devil is in the details. Creating a software solution is very much a joint effort. Even a tiny detail can influence the success of the entire project.

Only nuanced 360-degree analysis during project pre-launch stages can help you define the scope of work with enough precision. In the discovery phase, any of your assumptions can, and should, come under scrutiny. This will give you more clarity on the expected results and help explore specific challenges in various aspects of the project.

One more reason for doing project discovery is to make sure you go with the right development team. This phase will expose your selected partner’s business understanding, hard skills and values. You’ll also find out how comfortable you are working with the team. It’s an excellent way to test-drive a partnership without a long-term financial commitment.

Another software development company can also use the deliverables of the discovery phase. However, switching partners after the start of product development is complicated. It will take time and a lot of communication and paperwork.

To sum up the above into core takeaways, here are the most important benefits of the discovery phase:

• You get a higher return on investment because project discovery helps you see the big picture. You’ll be able to get a better idea of your project workflow, avoid many risks and optimize expenditure while becoming more confident of the successful outcome in the long run. Discovery keeps you focused on the important things.
• We can optimize and reduce project costs by excluding redundant and irrelevant functional requirements, which would later turn into unnecessary features and development stages, causing budget overruns.
• Creating a prototype during the discovery phase helps you gain investment and test your product by getting feedback from both investors and real end-users. The discovery phase allows planning various aspects of a future solution from the user perspective from the very start. That’s a sure way to achieve user satisfaction, the main goal of any user-oriented product. It means increasing customer retention and loyalty.

However tempting it may seem, skipping project discovery won’t actually save you time or money. On the contrary, it may lead to additional risks and complications. Here are some of the consequences of ignoring discovery:

Get the Most Out of Your Discovery Phase

We’ve defined key points of making your discovery phase project management as optimal and efficient as possible based on our previous work with clients. Here are some success stories.

A company from Singapore, Xypher Pte Ltd., began their work with Unicsoft starting with the discovery phase. In particular, we conducted an initial three-day joint on-site workshop at the Unicsoft Kyiv office. The client wanted to meet the team in person and go through the extremely complex architecture of an AI/blockchain-backed platform together.

Unicsoft’s task was to integrate new logic into the existing sophisticated environment, ensuring data security and data encryption, scalability, speed of transactions, tokenomics, etc. We navigated the client through the cutting-edge technologies and approaches we’d use.

After the workshop, our partner received a set of documents describing the required Scope of Work and investment needed to combine AI for predictive analysis and blockchain for data storage and security. Such a detailed description and feasibility studies allowed Xypher Pte Ltd. to complete the general development plan effortlessly.

Xypher Pte Ltd. had a very positive experience working with Unicsoft and were pleased with the expertise, communication and the level of team motivation and customer service. The management of the Singaporean company decided to engage Unicsoft in another project. The underperformance of the previous vendor made it a challenging task.

The deadline for developing two native mobile and web apps was very tight, so a Unicsoft tech squad, consisting of a senior PM and a mobile architect, had to get to Singapore for a workshop very quickly. The team showed a true extra-mile attitude and prepared a detailed scope of work, architecture and technical decisions on-site. Our experts also performed code handover and worked out a roadmap to ensure that the deadline would be met — all during a brief three-day visit.

Starting out with the project discovery phase helped our partner from Singapore successfully plan a software delivery timeline and create solution architecture by engaging experts (which Xypher didn’t have in-house). By the end of the discovery phase of project, our client knew they’d chosen a highly professional team with a culture of strong communication and a get-the-job-done attitude. It’s an honor for us to continue partnering with Xypher Pte Ltd. on challenging projects.
This is what Benny Low, co-founder of Xypher Pte Ltd., Singapore, had to say on the matter:

Here’s another story of a partnership. A startup within an automotive company from California approached Unicsoft with a ready MVP of Dashboard Dealership. The client’s business was providing US automotive dealers with financial information about automotive stores.

We suggested starting with analysis since not all requirements were clear and the solution needed a lot of improvement. During the project discovery phase, we offered to change the interface of the solution.

Equipped with all the deliverables after project discovery, the client made a strong presentation with a new interface design and a clear vision. It was easier to pitch to their board of directors to acquire investment for tool development. We created an enterprise-level reporting tool capable of analyzing data from a range of sources. Thanks to this tool, the company was bought by a large enterprise, CDK Global.

In our portfolio example ‘Airport Guide’, the client only had a high-level business idea and description. Our recommendation was to start with the discovery phase.

We took some time with the client to analyze the business case and competitors and identify the target audience. As the client was a pilot himself and knew the application’s user requirements for that segment, we suggested developing the application for pilots first. This helped him save development costs and create a solution based on market needs. The application is working and helping pilots around the world plan flights.

4B is a worldwide manufacturer of high-quality, technologically advanced material handling & electronic components. The company is over 125 years old, and the headquarters are based in the United Kingdom.

4B Group has been working with Unicsoft for many years. We’ve worked on a number of projects together, and every project starts with the agile discovery phase. The effectiveness of such a workflow has been proven by many cases, such as Hazardmoon, a secure IoT monitoring solution for manufacturers. In every project for 4B Group, we met the estimated costs and deadline for solution delivery.

As you can see from these examples, Unicsoft likes to foster long-term relationships with our partners. We treat the success of your startup as our own, delivering tailored services of the highest standard. At Unicsoft, we share your values and the idea of true partnership. We build trust, loyalty and a shared vision. We are the partner of choice for full-cycle development, and we’ll be there when it’s time for support and maintenance.

What’s Your Choice: to Discover or Not?

As you take a closer look at the overall importance of the discovery phase for startups, it becomes clear that the benefits it provides are crucial for business. Project discovery helps reduce the overall project budget and also ensures deadlines are met thanks to performing detailed analysis prior to coding and designing the interface.

The way your project takes off will define its trajectory in the future. Will it be a safe flight, or are you in for some turbulence? Invest some time and budget into your project at the seed stage to have a sustainable operational business. Project discovery is an integral part of any successful startup.

Don’t hesitate to unlock all the benefits of discovery we’ve discussed. And if you need professional advice on the discovery phase or technical expertise, make the call right now and get 1 hour of free consultation with our experts!