Jory MacKay on June 11, 2025 How to do product discovery the right way (7-step plan)
The world’s best products simultaneously generate customer value while fulfilling their organization’s strategic objectives — but how do you strike the perfect balance?
Product discovery is the process of uncovering your customer needs to identify a new product or feature that will bring them extra value.
It’s an essential skill for all leaders that, if given the time and investment it deserves, ensures you invest in the ideas that are financially viable, create excitement, and contribute to your business strategy.
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If you’re on the hunt for your next big idea that will set you apart from your competitors, then this article is for you.
What is product discovery?
Product discovery is the process of understanding your customer needs to identify a new product or feature that will bring them extra value. Done right, product discovery provides product teams a list of ideas they can use to populate their product backlog.
But good product discovery isn’t all about customers. Any idea that comes out of product discovery also needs to be viable and achievable, as well as align with your organization’s goals and objectives.
Here’s what product discovery looks like in action:
- A bank undertakes some product discovery to identify new features for their mobile banking app.
- They complete user interviews, focus groups, and surveys to gain feedback from their customers.
- Customers share they’d like the bank to integrate their app with another bank, provide an in-app live chat, and allow app color customization.
- Integration with another bank would go against the bank’s business strategy, but they take the live chat and color customization ideas forward into their backlog.
Alongside speaking with customers, product discovery can also be done by completing a competitive analysis — where you identify the products and features users enjoy from your competitors.
The best companies focus their product discovery on coming up with unique ideas, rather than simply following trends.
Many product teams don’t invest enough time into product discovery, but we think that’s a big mistake. Here are some of the benefits you can achieve through proper product discovery:
- Differentiate yourself from the competition. Great businesses build unique and interesting products — not just copycats. Think about an iPhone vs. the hundreds of Androids designed to mimic its look, feel, and functionality.
- Create demand (not just capture it). Rather than competing to “one up” your competitors, product discovery can identify new products that create fresh demand for something that didn’t exist before.
- Give yourself the “first mover” advantage. Building on creating fresh demand, good product discovery can help you become the “first mover”, giving you a unique position in the market with no initial competition.
- Find lower-cost solutions to difficult problems. Sometimes simplicity is key. Getting closer to your customers can help you simplify your product by identifying what actually matters to users.
- Build strong customer loyalty. The process of product discovery shows your customers you care about them and their needs. This inherently builds trust and loyalty, boosting retention and the chance of referrals.
- Enable your company’s strategy. Many businesses set a strategy with no defined path to actually achieve it. Product discovery helps you unearth the ideas that will help you meet your business goals — be those new revenue opportunities, the chance to improve customer satisfaction, or reduce costs.
The 6 main challenges of successful product discovery
Coming up with the next big idea that no one else has thought of isn’t easy. A much cited report by CBInsights found that 35% of startups fail due to no market need for their product.
If you’re trying to come up with something new, or just take the next step on your product journey, here are some common challenges to avoid:
1. Getting stuck in a vacuum
Product teams can lose sight of the bigger picture, get caught up in their day-to-day tasks, or fall into playing “follow the leader” with competitors. These are the two of the main causes of “product discovery tunnel vision”, which limits teams coming up with ideas that are truly exciting.
2. Not engaging with real customers
To speed up discovery, some companies only speak with their customer success or support teams, rather than engaging with real customers. This limits the insights product teams receive and risks introducing bias from members of the organization.
3. Strategy and goals aren’t clear
If a company’s strategy and goals aren’t clear, it makes effective discovery challenging. This is because you have no strong opinion on which ideas should be tackled or ignored — leaving your team at risk of spending time, money, and resources on the wrong tasks.
4. No buy-in from stakeholders
Product discovery needs dedicated time and resources. If stakeholders aren’t on board, it can force teams to rush the process. This leads to poor quality results and insights that don’t actually help the product move forward.
5. Lack of data and critical information
Product discovery is a data-driven exercise, taking inputs from users and converting them into tangible, measurable features ready for delivery. If teams can’t capture and process the data correctly, they risk misunderstanding key insights and building the wrong things.
6. Competing priorities
Many organizations get caught up in the rat race of their next delivery sprint or milestone. If teams aren’t given the space to focus on discovery, they won’t give it the attention it deserves, leading to poor quality results.
Dynamic vs. static product discovery: Why continuous discovery is so important
Another area where teams go wrong is in treating product discovery as a “one and done” task. For example, spending a two-week sprint on product discovery and then neglecting to talk to users again for another year.
A static approach to product discovery leaves teams in the dark — unsure if what they’re building is still important for users.
To get the most out of product discovery, it should be an ongoing, dynamic process. Regular input from stakeholders, researchers, customer-facing employees, and users ensures you’re constantly “steering the ship” in the right direction, instead of accidentally sailing off course.
Here are the key characteristics of dynamic product discovery:
- Continuous. Product teams should look to get continuous feedback from users on what’s working well and what new products or features they’d like to see. There are many easy ways to do this through community forums, user interviews, and customer support feedback.
- Data driven. Dynamic product discovery combines quantitative and qualitative data to ensure teams make evidence-based decisions on which ideas to bin and which ones to progress.
- Collaborative. Product discovery requires inputs from many stakeholders, including employees, researchers, customer-facing employees, industry experts, and users. The best product discovery is highly collaborative, combining everyone’s views to get to the best result.
- Integrated. Product discovery should be integrated with the wider product management process, including sprint planning, development, and release. Those insights can help shape every other step, so should be shared with the entire team to enhance the value.
- Aligned. As we’ve discussed throughout this article, product discovery has to be aligned to the broader business strategy. While you don’t want to set too many boundaries, product discovery should be defined to ensure the ideas that come out are viable and achievable for the company to deliver.
Many product teams don’t invest enough time into product discovery, but we think that’s a big mistake.
How to do product discovery the right way (7 steps)
Product discovery is a constant cycle of exploration and validation. By taking new ideas, testing them out, and then constantly re-validating your information, you stay close to your users and ensure you deliver optimal value.
Let’s break this down into a step-by-step guide on how to complete product discovery.
1. Set your mission, vision, and desired business outcomes
Before you begin engaging with your users, it’s important to ensure you have your house in order. While user feedback will shape your path, setting your vision and mission helps guide the discovery process, while also serving to show what success looks like.
- Set a vision and mission. While user feedback will help you define the specifics of your strategy and roadmap, you should have a clear view of your company vision and mission. Your vision should be something aspirational that sets out how you want to be seen, with your mission underpinning that with a quantifiable performance objective.
- Use SMART goals. When it comes to quantifying your performance, SMART a popular framework to ensure your goals can be met. Standing for Specific, Measurable, Achievable, Realistic, and Time-Based, SMART objectives help you set goals you and your teams can actually get done. Check out our guide to setting goals to learn more.
Real-life example:
Andrea is the Product Manager for FinanceSavvy, a financial education app that helps young adults improve their financial habits. Before jumping into product discovery, Andrea works with FinanceSavvy’s leadership team to define their vision and comes up with: “To become the world’s most trusted financial education app”, and end of year objective “To have 10,000 active members”.
2. Get to know your current and future customers
With your North Star set, it’s time to get to know your ideal customer. This is perhaps the most important stage of product discovery, so you need to fully immerse yourself in their world for as long as it takes to form a clear understanding of their needs and pain points.
- Mix up your discovery techniques. There are so many different ways to learn about your ideal customer and users. But the most common are techniques such as user surveys, persona crafting, focus groups, user journey mapping, shadowing, and stakeholder analysis. Mix up your techniques to gather as much data as possible.
- Run user interviews. User interviews are one of the most common ways to get valuable qualitative insights from users. But like all interviews, there’s a right way and a wrong way to run them, with the risk of getting poor insights if you get them wrong. Check out our guide on running better user interviews to ensure you get them right the first time!
- Stay organized. A project management tool can be your best friend when gathering and organizing data. For example, Planio’s File Storage, Wiki, and Communication features are perfect tools for helping you plan, track, and document user interviews, keeping all of your user feedback in one place for the team to access.
Real-life example:
Andrea and a Business Analyst, Sam, begin product discovery by creating a survey that’s sent to all current users and the subscribers of their mailing list. Alongside this, they reach out to ten of their most active users and conduct one-to-one user interviews, working to understand how they use FinanceSavvy today and their current pain points.
3. Fill in the blanks with data from different teams and sources
Hearing from users is just one piece of the puzzle when it comes to compiling product discovery data. Tap into other sources, such as employees, industry thought leadership, and competitor analysis to give you a rounded picture of where your product can develop.
What is a competitive analysis? A competitive analysis is a market research activity used to understand customers’ needs and map them against competitors’ strengths and weaknesses. It’s a great way to find out what customer’s love and where you can quickly step ahead of your competitors. You can use our free competitive analysis template to help you get started.
Real-life example:
With user feedback gathered, Andrea completes a competitive analysis of their two biggest competitors, Finance4U and MoneyHelp. Both competitors are strong on video content, which customers enjoy, but both have a poor personal mentor offering which is highly sought after by premium-level users.
4. Define and validate your problem
With your exploration phase completed, it’s time to start validating any data that you’ve gathered. In most instances, this will involve analyzing different data sets together to identify key themes, commonality, and begin prioritizing which ideas/problems you want to tackle first.
- Set limitations. As you begin the validation process, make sure you set clear limitations on what you will and won’t take forward. Just because it’s a user pain point doesn’t mean you have to build it. Set boundaries aligned to your vision, mission, and key business objectives.
- Learn to prioritize. You can’t take every idea and turn it into a shiny new solution on day one. As you progress your validation, prioritize features that are important to your users, can be delivered the fastest, or meet your strategic goals.
Real-life example:
Alongside personal mentors connections, users also replied that they’d like to see AI chatbot support, budget planning tools, and crypto integrations within FinanceSavvy. Crypto doesn’t currently align with the brand’s strategy based around trust, so Andrea disregards that idea but takes the others forward.
5. Ideate multiple solutions for each opportunity
Once you’ve taken a product idea forward, the next stage of validation is to begin looking for solutions. Here, you’re considering different ways to bring an idea to life, including the technology, processes, and content required.
- Get creative with your designs. The best designs are considered from multiple different angles, including a focus on cost, time to deliver, user experience, and the level of technical debt. Design frameworks such as behavioral design are great places to start, helping you design solutions through the lens of the user.
- Evaluate each solution fairly. All of your solutions should be fairly validated, considering factors such as usability, feasibility, whether they meet the objectives, costs required, and the time to implementation. Depending on your constraints, you may choose a go-forward solution based on any of these factors.
Real-life example:
Andrea and the team focus on solution ideas for a budget planning tool within FinanceSavvy. They look at multiple options, ranging from a simple downloadable template to a dynamic in-app planner built using Java and React.
6. Create prototypes to test your assumptions (both internally and externally)
Good product discovery should also include a concept that can be used to validate ideas and pain points with end users. While users may think they want something new, it’s often not until they see it in action that they can really say for sure.
- Get comfortable with experimentation. When building prototypes, it’s important to get comfortable with things not being perfect. Adopting a product experimentation mindset is great for this, focusing on testable prototypes rather than creating v1 of your final solution.
- Seek out high-quality feedback. Once a prototype is built, it’s important to gather feedback from users and other stakeholders. The key here is to not be afraid of failure, and welcome negative feedback that can help you make further improvements.
Real-life example:
Andrea’s product team builds a wireframe prototype of the budget planning tool, using high-level designs and basic web flows to demonstrate it to users. They ask five users to test how the tool works, gathering feedback on what users like, what they don’t like, and any areas of confusion or uncertainty.
7. Share results and move winning ideas into your sprint pipeline
Congratulations! You’ve got a winning idea that’s ready to be moved into product delivery. Once you’ve shared the results of your prototype testing with the team, add the new idea to your product backlog and begin planning for development.
- Don’t forget your users. Remember, it’s important to keep checking in with users throughout development to continually validate the solution you’re building. If you don’t, you run the risk of scope creep and building a solution that doesn’t meet user’s needs.
- Master sprint planning with Planio. Sprint planning is much easier when you have a tool to help. Planio’s Agile project management features are perfect for creating, assigning, and tracking your sprint tasks, ensuring the entire team are on the same page. You can learn more by visiting our Agile project management page.
Real-life example:
Based on the positive feedback from users, the FinanceSavvy team adds the budget planning tools into their app backlog, estimating it will take two sprints to complete. As they work through the development, they complete a showcase with their five superusers to get additional feedback before releasing to production.
The bottom line: Great companies consistently ship useful products
With the world of digital products so competitive, product discovery is an essential skill to help you connect with users, invest in the right ideas, and beat out your competition.
Great product discovery generates new ideas that users will love, allowing you to optimize your precious development resources.
Like many things in business, the best product teams use tools to help them organize, streamline, and document their discovery. Planio is tailor-made for product teams, with features for communication, documentation, and sprint planning helping you discover and deliver your next big idea.
Try Planio with your team — free for 30 days (no credit card required!)
