Digital Product Discovery: A Guide For Leaders

Digital Product Discovery is the process of learning what to build. It is about discovering what to build. Make sure that what gets into the product backlog is validated in advance, and do it as part of your normal product team operation.

ADAPT Methodology® is a unique Digital Product Development framework to change traditional project-centric companies toward product-led companies!

Society changed and leaders need support in the way how they lead and design their digital product organizations, that is the reason why the ADAPT Methodology® was created, but now let’s get a deep dive into the Product Discovery topic.

Digital Product Discovery is not something that happens once in a while; it is a continuous process that high-performance product teams do as part of their normal activity.

Why do We Need This?

The reasons for adopting a continuous product discovery mindset in your organization might be various, but among them, the most important could be:

• The failure rate of new features is pretty high
• Uncertainty about customers’ needs and pain points
• Uncertainty about what to build next, how to build it and for whom

If any of the previous situations is normal in your team you should look into Digital Product Discovery.

Digital Product Discovery enables real product teams for modern product organizations, where teams can move away from receiving requirements, features, and predefined business cases and can discover and own their solutions to achieve a business outcome or a strategic goal.

However, it is not just a process it is also a mindset. Your organization must be prepared to benefit from Digital Product Discovery.

Many companies operate under the assumptions that they know what customers want, they know how to build it, and that nothing is going to change along the way. And that’s a recipe for failure.

After 15 years of Agile and DevOps failure rate of new products and features is demoralizing. The era of continuous delivery is over, now we are in the era of continuous discovery.

What is Digital Product Discovery?

Digital Product Discovery is the process of iteratively and incrementally reducing uncertainty about an idea or problem to make sure that we build the right thing for the right people.

The process is composed of two interconnected learning loops: an exploration loop and a validation loop.

Digital Product Discovery enables product teams to discover what to build by getting rid of the waterfall big-design-upfront process full of assumptions and wishful thinking that end up in a business case and a list of requirements.

The problem with the traditional approach to deciding what to build is double:

1. First of all, the elapsed time is usually huge due to delays, different departments being involved, turf wars, number gaming, and all sorts of waste.
2. On the other hand, the actual amount of valuable time dedicated to market research and validation is pretty low.

So, we end up building something nobody wants.

We must turn this around, and dedicate quality time to Digital Product Discovery upfront but in small cycles and then also combine Product Discovery with Product Delivery as we move forward.

This article from Intercom explains their approach well. To create great products we need to shift the balance from discovery delivery. We must spend more time in the “problem space” and we must do that as part of our normal operation as a product team not just once in a while in a Design Sprint or Lean Inception.

Modern product teams must integrate product discovery with product delivery.

Everything that ends up in a product backlog for delivery should have gone through a discovery process. This discovery process will be different depending on the risk and the uncertainty associated with the idea or product. For instance, it is not the same to deliver a new campaign for Black Friday, as to target a new market segment, add a new product category to our eCommerce, or develop a brand new business idea.

The Origins

Thanks to Agile and DevOps companies have been able to develop the capability of continuously delivering quality software to production. However, the success rates of products and innovations are still depressing.

We learned how to do things right, but we still didn’t learn how to do the right things.

The reason lies in how many companies still operate in a siloed and waterfall way regardless of how agile they say they are.

Modern product organizations must learn to integrate Digital Product Discovery and product delivery to build the right thing and to build it right.

Real business agility comes from enabling continuous discovery all the way down from strategy to operations: strategy, business model, goal setting, product roadmaps, digital product discovery, and product delivery.

Digital Product Discovery is the learning process that connects a company’s strategy with product delivery.

Digital Product Discovery vs Digital Product Delivery

• Digital Product Discovery = figuring out what to build
• Digital Product Delivery = Building it

However, traditionally, companies have put all the focus on building stuff.

Digital Product Discovery is the process of figuring out what to build. In order words, progressively reduce uncertainty around a business idea or product that ends up with validated backlog items in your product backlog.

Depending on your stage of the product life cycle there is going to be a different balance between digital product discovery and product delivery.

It is not the same starting from scratch with a new business idea as to target a new customer segment or launch a Black Friday campaign that you have done several times before.

Every effort will require different amounts of digital product discovery.

Modern product companies enable continuous digital product discovery and emergent strategy in their product teams.

Digital Product Discovery vs Business Discovery

Now, I’d like to differentiate between two different concepts that are deeply interrelated but are not the same.

A product (or service) is the thing you buy as a customer. But, surrounding the product there is a business model. The difference between the success or failure of a great product is oftentimes the business model.

If you are starting a new company or creating a new product you must also perform business discovery. Which is the process of coming up with a sustainable and scalable business model. That’s what Lean Startup movement taught us.

Imagine you are starting a shoe business. As a shoemaker, your product is the shoes but as a business model, you must also discover what is the price tag, how big is the market opportunity, which are the best channels to acquire and deliver the shoes to customers, partnerships required to implement the whole value stream and some other important topics which might mean the success or failure of your business.

When we think about Digital Product Discovery we are thinking mainly of product-related risks. We are making sure that we build the right product for the right audience.

So, we are finding out answers to the following questions:

• Is this product desirable (does it solve a problem?) – DESIRABILITY
• Is it usable (does it nicely solve the problem?) – USABILITY
• Is it feasible (can we build it?) – TECHNICAL FEASIBILITY

However, when we think about Business Discovery we are thinking about the surrounding business model and strategy. So, we are finding out answers to the following questions:

• Is there a market opportunity? (market risk) – MARKET OPPORTUNITY
• Is this business feasible (partnerships, required activities, and resources) – BUSINESS FEASIBILITY
• Are we going to make money out of it? how fast? what are the revenue models? what channels are best for our model and pricing? – BUSINESS VIABILITY

As a Product Manager, you must care about both. Obviously, at the beginning you should work on the whole business model but as you advance into Product-Market Fit and later phases your teams should engage in continuous Digital product discovery to enable growth and to fix product performance issues whenever they occur.

To summarize, business discovery is about building a business and Digital product discovery is about building a product.

What Digital Product Discovery is Not?

For many companies, the traditional way of doing Digital product discovery looks pretty much like the following:

1. A long list of ideas, initiatives, or projects is collected from executives, stakeholders, and throughout the organization
2. A group of people (sometimes executives, sometimes a budget oversight committee, sometimes a product manager) prioritizes and funds those ideas, initiatives, or projects
3. Resources get assigned to ideas and a product manager starts gathering requirements
4. The product manager interviews key stakeholders to understand what they want
5. The requirements go to engineering for delivery

There is a recent evolution of this, which you will know as Lean Inception or Agile Inception. It is a compressed collaborative two-day process to decide what to build and align everyone. It is better than a pure waterfall, but still a waterfall. And, mainly focused on solutions, not on exploring the problem space and discovering what to build.

Sometimes when we present our Digital product discovery training or coaching programs to our prospects or clients some people say “We are already doing Digital Product Discovery, we do Design Sprints or Design Thinking” or “We always start new projects with a Lean Inception workshop”.

First of all, let me say that incorporating Design Sprint or Lean Inceptions into your product development process is good, it is a good starting point, but it is far away from Digital Product Discovery.

Lean Inception vs Design Sprint vs Digital Product Discovery

Digital Product Discovery is a mindset that translates into organizing in product teams that are responsible end to end from ideation to delivery. Teams do both Digital product discovery and product delivery, they involve customers in their exploration, validation, and delivery cycles.

Lean Inception

Lean Inception is a concept developed and coined by Paulo Caroli, a Principal Consultant at ThoughtWorks, which is typically used to kick off agile projects.

As its name denotes, it is an inception, it is a creation that happens in one or two days followed by delivery. It is mainly an alignment effort to make sure everybody is on the same page about the goals, constraints, risks, scope, and high-level roadmap.

A few techniques in Lean Inception are the same as the techniques in Digital Product Discovery, but Digital Product Discovery is a continuous process and it is also a mentality.

Lean Inception is mainly an alignment tool to collaboratively define a solution and an implementation roadmap.

Design Sprint

Design Sprint covers a bit more space.

It begins with an ideation phase to then create prototypes and validate with customers. That’s much better, but it is naive to assume that a new business idea, product or big development will be fine with just 5 days of Design Sprint.

Some companies, however, implement Design Sprints for several weeks to come up with a clear roadmap for building. And that’s pretty much similar to the process of Digital Product Discovery which could easily take 6 to 8 weeks for a new product.

Digital Product Discovery is Messy

Digital Product Discovery is a non-linear, unstructured and unpredictable process. It is quite difficult to know in advance when you are going to learn something or how long is it going to take.

Depending on the level of uncertainty and risk associated with the business idea you are willing to develop there will be lots of backs en forth between exploration and validation.

Some of the tasks will require a few days to develop and test, but some others will require weeks to develop and some more weeks to validate.

On top of that, you must recruit customers for interviewing or testing frequently.

Many teams struggle to put an effective discovery process in place and they are inventing the wheel every week or trying random stuff to see if it works. This creates a lot of frustration in the team and distrust in stakeholders. Which might facilitate going back to old ways of managing product development.

To prevent this from happening and make sure that teams get off to a good start we recommend you put in place our practical Product Discovery Framework, which over time you can adapt and modify based on your context and learning.

Product Discovery Framework

Digital Product Discovery is not a linear one-way process, as you can imagine. It is often messy and unpredictable.

You will need a framework and a set of practices and techniques to bring some structure to this messy process.

Digital Product Discovery is not something that should happen once in a while but a continuous process that high-performance product teams do as part of their normal activity.

However, when it comes to organizing Digital product discovery and integrating it with delivery most teams get stuck. They have a hard time knowing exactly what they should do. They understand the high-level concepts, but they don’t know how to apply them.

Some other teams just go to the opposite extreme and suffer from paralysis per analysis. They spend so much time in discovery that they forget about delivery.

You must learn to keep an effective dynamic balance between Digital product discovery and product delivery, and to achieve that it is key to have a product discovery framework.

You can build your own, but if you don’t know where to start from, we recommend starting with our product discovery framework.

With this framework, you can align team efforts, provide visibility to stakeholders, and make sure that you are on track toward achieving your business goals.

Begin With the End in Mind

The starting point is always a goal (or a challenge). The endpoint is always the decision to build a product or feature. In between, lies the digital product discovery double-loop of Exploration and Validation.

Very importantly, in the middle of this double loop that connects exploration and validation, there is a decision point:

• Can we move straight ahead to building from the goal?
• Do we need to explore the problem space?
• Can we just build after exploring the problem space?
• Do we need further exploration?
• Do we need to validate with customers after exploration?
• Can we build already after validation or do we need further exploration because we learned something?
• Do we need further validation?
• Should we cancel or pivot?

Goal

Everything starts with a goal. This goal can be a business objective, a problem with your product growth, or perhaps a theme in the roadmap.

This step is the initial kick-off and it is fundamental for the success of the Digital Product Discovery process.

Once the goal and success criteria are clear we must do the following:

1. Design the Team
2. Create a Supportive Environment
3. Build Alignment

Exploration

The outcome of the Exploration loop is ideas worth pursuing.

They are solutions to customers' problems, and expected outcomes while performing jobs or growth ideas for the product.

In the exploration loop, you shape and reshape ideas for achieving a business goal and/or creating an impact on your customers.

The first iterations might be based on your intuition but as soon as possible you should do some research to discover what your customers really need.

As many ideas cross towards the Validation loop some will come back as new insights to be explored or new ideas to be validated.

Validation

The purpose of the Validation loop is to design experiments to validate ideas before going into delivery.

To achieve this we build different prototypes with different levels of fidelity based on the strength of the evidence we need to gather and also based on the type of thing we want to validate: Desirability, Usability, or Feasibility.

Build

You have come a long way. Now, it is time to decide what to ship to the customer.

Here it is when you can use some effective techniques to translate your product insights into successful features like Lean Inception or Story Mapping

Summary of Digital Product Discovery

Modern product organizations are characterized by a continuous learning process at all levels of decision-making: from strategy down to delivery.

Product Teams must combine both discovery and delivery in their normal routine. Continuously researching the market, involving customers, and experimenting in fast and short cycles to make sure that what they build is likely to have an impact.

Digital Product Discovery is the continuous process of reducing uncertainty around an idea. Companies must move away from the one-off big design upfront approach to enabling and empowering their product teams to continuously evolve their product in pursuit of a business goal.

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