Discovery Phase for a Startup: From an Idea to the Project

The startup journey is often connected with risk and uncertainty. For instance, 18% of startups fail within one year. Small businesses frequently face difficulties caused by improper product planning, underrated risks, or overbudgeting. Even the most promising ideas can fail when startups consider them more like a nice-to-have rather than an investor-ready foundation. The discovery phase helps to prepare for smart product release and an effective transfer from an unclear vision to a structured plan.

This article will cover the importance of the discovery phase for a startup. We will discuss phase benefits and possible outcomes. With our guidance, you will learn more about the risks of skipping discovery, the usual processes, and common scenarios when the phase is essential.

What Is the Discovery Phase?

A discovery phase is the start of product creation. If the development stage begins the journey from idea to fulfillment, the discovery is preparation for this journey. It is the step when a business vision turns into a structured set of features and a specific plan. The initial phase defines and guides all subsequent development actions.

Discovery aligns stakeholders in a startup’s product planning to choose the next course, future functions, and non-functional requirements. At this point, the development team and the company’s representatives gather to define the stack, estimate the required budget and its limits, and create a technical startup product roadmap.

Experts conduct thorough market research to define current interests and estimate the target audience’s expectations and competitors’ approaches to develop a working marketing strategy. Discovery is the time to identify potential risks and prepare mitigation strategies. 

This step has to confirm that everyone involved is on the same page and shares the vision about the desired outcome. Such an approach allows smart resource planning and helps to develop the most cost-effective and practical idea fulfillment and establish a clear and real project timeline.

Why startups need the discovery phase

Founders often believe they fully grasp a future project’s concepts and can anticipate everything without the discovery phase. The reality is that when the time comes to develop a minimum viable product, a company faces MVP planning challenges and has issues with prioritizing features and adhering to budget constraints. Let’s see three common problems that cause struggles for startups without discovery.

MVP planning issues

New leads may not know how to prepare for an MVP effectively, and rushing into development, they build an MVP based on assumptions rather than research of real user needs. As a result, the product can have too many unnecessary features and not match the core users’ requirements. Businesses need to know their market and understand current product demand, or they will have to join 34% of startups that failed because of a lack of it.

Without proper MVP planning, the project can expand beyond its original goals. The discovery phase helps avoid scope creep in startups by setting a specific target and creating the roadmap that guides its fulfillment. 

With correct MVP planning, you can transform an initial idea into a full-scale project, like during our collaboration with Molo Finance, which has successfully raised $270M in funding.  Smart preparation allowed them to go from basic design and development of a promising startup to market leadership with an advanced online platform.

Budget under/overestimation

Budget planning for startups is essential; it ensures that only the right amount is spent on product releases. Underestimation can cause struggles when developers try to fit the available costs or the leads have to deal with unexpected expenses. The startup can also run out of money in the middle of development and will not be able to finish the project. Overestimation, meanwhile, can make companies spend more than required. Financial instability and loss of investor trust can lead to an early closure.

Unclear priorities

Without the discovery phase, you may feel that everything is equally important. Trying to cover all development aspects, including features, marketing, and user segments, without specific prioritization slows the development process and makes it inefficient. A chaotic development journey and an absence of a clear roadmap may cause missed opportunities and a lack of understanding of which target should be hit first.

Benefits of Discovery for Startups

The discovery phase helps to see the complete picture of the situation and create an effective project plan, but it is only one of the apparent benefits. We have prepared a list of the main advantages our customers experience thanks to proper preparation before development.

Significant cost savings

During the discovery phase, the expert team and company lead work together to define what should be done, how, and at what cost. Clear budget estimation helps control spending and avoid unnecessary features, reduces the necessity of a design redo, and minimizes the chance of failed MVPs.

Scope creep prevention

Scope creep is a common problem for those who skip the discovery phase because a project can expand beyond its original objectives without a proper plan and control. If a creep happens, the startup may experience increased costs and missed or expanded timelines. 

Informed decision-making

During the discovery phase, experts collect user feedback, conduct market research, and provide competitive analysis. With all the required information, they can make more data-driven decisions and choose the most efficient and suitable strategy based on customers’ demands, specifically for their industry.

Efficient resource allocation

When resources are extremely limited, it is important to ensure that they are invested in the right aspects – in features and purposes that could create maximum outcomes. During product discovery startups can first see where the investments should go and apply more efficient resource allocation.

Proactive risk mitigation

Accurate research will help identify potential risks like low product demand or possible technical issues and fix the problem early. With informed risk mitigation, the team can avoid bottlenecks and raise the chance of successful product release.

Discovery Phase Deliverables

Both fresh startups and experienced companies can feel the advantages of the discovery phase and enjoy the outcomes it can offer. Our collaboration with Illumidesk on the edtech platform was a good example of a case when the discovery phase enabled the transformation of existing developments into a feature-rich, scalable platform now trusted by Intel Corporation and the University of Michigan. Considering their impressive result, would you like to see how the discovery phase creates a launch pad for rapid growth?

Core outcomes

• UX Prototype

An interactive prototype helps visualize how the product will look after release and what users will get. You will see the structure, main screen design, and navigation. The main goal is to make sure that preliminary implementation matches expectations.

• Risk Assessment Report

During the discovery phase, the expert team conducts market research to analyze product demand. Professionals also analyze operational and technical risks to control and mitigate them before they cause any harm to the product.

• Software Requirements Specifications

You can get a detailed description of all the functional and non-functional product requirements with a clear project scope. The teams will use it to guide further development to meet set goals.

• Use Cases and User Stories

User feedback analysis will show how the target audience may accept the product and its functionality after the release. Looking at the features from the end user’s side will allow you to create a customer-centric approach and add useful features.

High-level project estimation

Our discovery stage services always include comprehensive project estimation to cover such segments as cost, process duration, team requirements, and employee capacity.

• Cost analysis enables accurate overall budget planning and ensures that the company will not have to spend more than required.
• Timeline evaluation will provide the most accurate forecasts about the time necessary for product release.
• Analyzing team requirements, you can define what kind of experts and how many employees you need and divide roles and responsibilities between them.

Important assets that you get

Product discovery for startups is a source of a comprehensive set of byproducts, including the following:

• Feature backlog – a list of features
• Roadmap – a timeline for product release and feature launches
• Architectural diagrams – visual presentation of product architecture and technologies
• Wireframes – early design blueprints with structure, layout, and functionality
• User flow diagrams are visual maps of actions users must take for specific tasks
• API integration backlog – service connection with the system

Investor-ready startup materials

As a result of the discovery phase, you will have the whole set of materials you may need to demonstrate to the existing investors and pitch to the new ones. Structured planning will show all project components, expressing clarity and logic for each step. Risk visibility and mitigation strategies are the best sign of your startup’s reliability and readiness for proactive management. And with budget confidence, you will know what expenses you can expect from each stage.

When Is the Discovery Phase Essential?

With our experience in startup software planning, the discovery phase is always valuable because it makes your company as prepared for product release as possible. But, in some cases, the discovery gives more than extra readiness; it provides the project survival strategy. 

Check up on the signs, demonstrating you can gain a lot from the discovery phase:

• The project has stringent budget constraints
• You have an unclear vision of your future project and must crystallize an idea
• Technical complexity requires professional involvement
• You are getting lost in scattered documentation

Risks of Skipping the Discovery Phase

Our experts believe skipping the discovery phase raises the chances of startup failure due to improper planning or inaccurate resource estimation. 

What can happen if you skip the discovery?

• Overlooked technical constraints lead to errors and raise project complexity.
• Incorrect resource and budget estimation may cause a lack of money. 
• Without a reasonable timeline, the project may not be able to be finished in time.
• Increased scope creep can add more customization than was planned.
• Underrated risk will cause system vulnerability that can lead to potential harm.
• Stakeholders will experience a lack of understanding of critical aspects.
  

The Discovery Phase Process Steps

The Django Stars team has comprehensive experience in custom software development for startups. The best way to show the effectiveness of the discovery phase is to share our usual routine. The traditional initial phase contains six steps, and now we will review each one with a detailed explanation of what we do and why.

Step 1. Analysis

Data collection is an essential step, and it helps to understand our client and their requirements before goal setting. 

• Existing documentation review allows us to see where we should start. We get familiar with the business plan and study product specifications and wireframes.

• We get a complete picture of current product demand and user expectations by conducting comprehensive market research and analyzing competitor solutions.

• Carefully assessing the current system and processes, we can better understand the core, what is missing, and where we need more clarification.

Step 2. Preparation

Productive collaboration requires clear structure and organization. So, at this step, we prepare the list of questions to cover all blind spots. Large tasks are divided into smaller ones to get more control over the process. Then, we estimate the timeline and provide a forecast for resource requirements. Through risk estimation, we form a list of potential threats to the project that we need to keep under control. 

The main goal of the preparation step is to develop a clear and manageable plan and ensure that the team is ready to participate with stakeholders. So, once the estimations are done, we schedule initial engagements.

Step 3. Consultation

It is time for the team to meet with stakeholders and introduce everyone. We want to establish a collaborative, insight-driven discovery phase process to align our views. To achieve this, we present the project’s vision, discuss goals, and define the scope. Reviewing our initial findings and hearing clients’ ideas, we can establish ongoing communication to ensure that the result matches stakeholders’ expectations. 

Step 4. Collaborative sessions

Communication is a key to understanding, so we always conduct focused sessions to discuss specific project aspects. Focusing on UX/UI, architecture, features, and user journey helps explicitly to understand what kind of experience the future solution should offer. We aim to integrate session outcomes into the overall project plan. We create artifacts and adjust the plan according to stakeholders’ feedback. 

Step 5. Strategic planning

Equipped with collected insights and documentation, the team can turn an unclear vision into a concrete action strategy that will serve as early-stage startup guidance. Considering all required phases and timelines, we must develop a detailed project roadmap for this step.

It’s the moment to confirm technical requirements, architecture, action, and capacity plans. We provide our cost and time estimations and share the vision of team members’ roles. No guess is allowed; we stick to facts and informed decisions.

Step 6. Formal proposal

Here is the outcome of the discovery phase efforts – the comprehensive document summarizing the project plan for stakeholders’ approval. We create a clear blueprint that will guide the future development process. It includes everything we discussed during collaboration sessions and our preparations, from estimations to roadmaps with prototypes.

Startup Discovery Phase Checklist

A checklist is one of the best discovery phase tips for a startup, as it is the simplest way to control the process and ensure all the steps are done correctly.

Main discovery phase stages with descriptions

By following these steps, you can ensure that the discovery phase will be productive and efficient, and your project’s chances for success will rise significantly.

Conclusion

A discovery phase is key to successful product release, especially for startups with strict resource limitations who need to be sure about their project plan. It reduces the chances of failure and raises investor confidence in the materials, demonstrating the idea’s perspectives. With the complete picture, you can plan development and marketing strategies more efficiently, controlling all risks and timelines. 

If you want to start the discovery, define the stakeholder involvement and find a bespoke software development team for an efficient and high-quality initial phase. Expert assistance will incomparably speed up the discovery and improve estimation accuracy.

Django Stars offers custom and tailored development services and will gladly introduce you to the world of productive discovery processes. Let’s set up an initial consultation and discuss the possibilities of collaboration.