Cut costs and increase revenue with Product Discovery Workshops
Product development is expensive, and with software engineer costs still rising, we can’t expect expenses to go down anytime soon. However, this doesn’t mean investors or stakeholders can’t find ways to spend more efficiently. When creating or improving a product, there are several helpful tools that can reduce investment risks, cut costs, and increase revenue through smart decision-making. One such tool is the Product Discovery Workshop. Today, I will focus on potential problems and the discovery tools that can help lower costs and ensure high revenue.
Table of contents
What is a Product Discovery Workshop and Product Discovery Process?
The Product Discovery Workshop is a collection of tools we use to gather information about the product we aim to build, in collaboration with our clients. It’s our most crucial toolset, and we conduct these workshops at the beginning of every collaboration, even before writing the first line of code. Each workshop is unique because every client has different challenges, and we tailor the workshop to address these while also learning more about the product and business needs. The most popular workshop tools include Business Model Canvas, Product Vision Board, User Personas, Value Proposition Canvas, User Story Mapping. These workshops typically last 3-5 days, during which our team and the client’s team work together, ideally face to face. Online workshops are fine, but nothing beats the chemistry of live meetings!
The Product Discovery Process is a continuous extension of the workshop. We use dedicated tools according to the needs that arise during the product development process.The tools and exercises from the Product Discovery Workshops can be used separately or combined together.
The biggest advantage of the Product Discovery Workshop, in my opinion, is that it accelerates the start of the development and onboarding processes from 2-3 weeks to just 3-5 days. It’s the ultimate kick-off event.
In this article, I will focus on the most common cost-generating challenges and revenue opportunities we face during the development process, and the specific Product Development tools we use to address them.
Stakeholder (mis)alignment
Stakeholder misalignment can be a significant challenge. Often, when we begin collaborating with a new company, we find that their internal hierarchy and structure are complex, with stakeholders coming from different departments or national branches. Each stakeholder has their own goals and priorities, leading to conflicting directions for the project and causing delays and inefficiencies. Misalignment among stakeholders often results in unclear requirements, scope changes, and prolonged decision-making processes, all of which can increase costs and impact the project timeline.
Solution: Among the tools we use in the Product Discovery Workshops and Process, the Business Model Canvas is the most effective for helping stakeholders agree on priorities and business goals. It provides a clear, visual representation of the business model, allowing stakeholders to see how different components interact and contribute to the overall strategy. By mapping out key elements such as value propositions, customer segments, and revenue streams, the Business Model Canvas fosters a shared understanding and helps identify areas of alignment and potential conflict. This collaborative approach ensures that all stakeholders have a voice in shaping the project, leading to more cohesive decision-making and a unified direction for the development process.
What are the savings? Conducting the Business Model Canvas exercise at the beginning of the collaboration helps the development team understand the product’s priorities and the reasons behind stakeholders’ priorities. Additionally, this tool facilitates prioritization and communication among stakeholders, helping to avoid future delays or unexpected pivots.
Dealing with similar challenges?
Lack of a single source of truth
When will feature X be implemented? Why does it take so long? Why does it cost so much? Are we there yet? These types of questions will arise if the team does not have a proper product roadmap in place. The scope of a future digital product is one of the most important factors affecting the cost of creating the entire application. When translated into a product roadmap, the scope allows us to:
- Propose the most important product goals
- Suggest the composition of the team that will work on the product
- Estimate the duration of development
- Propose key milestones, such as the release date and appropriate product metrics.
- Estimate the ROI
The more precise your information is, the better decisions can be made.
Solution: By clearly defining the product scope and requirements during the Product Discovery Workshop, teams can create more accurate cost estimates, reducing the chances of unexpected expenses later in the project. To do this, we often use the User Story Mapping tool. This tool helps visualize the product’s features and functionality from the user’s perspective, prioritize development tasks, and ensure all stakeholders understand the project’s scope and progression. Estimations are later done by a team that usually includes a Tech Lead, Lead Designer, and Product Manager.
Where are the savings? With a defined scope and accurate estimations in place, the client’s stakeholders can determine which features are crucial, which are not, and which are missing. This stage serves as a reality check to ensure alignment between the client’s desires, necessary features, and budget constraints. It’s also an excellent opportunity to simplify the product and reduce costs by eliminating features that will not positively impact ROI. When in doubt about the budget, use the User Story Mapping tool!
Red flags ahead
Building software is risky as hell. There are thousands of factors to consider, dozens of methodologies to choose from, and a plethora of technological partners to select. Moreover, we always create products within some context, whether political or financial. Long story short: we can’t avoid risks, but at least we can map and mitigate them.
Solution: Risk analysis tools are some of the simplest yet most powerful tools I know. They help map potential challenges and sort them by their impact and likelihood. Risks that are very likely and might be impactful should capture our attention because if they occur (and they will, according to their likelihood), they can shake the project entirely. This exercise is designed to address challenges before they happen.
What are the savings? Simply put, if the team recognizes that legacy code will likely generate problems, it signals the need to tackle this issue somehow. If the team worries about security issues, it’s better to resolve these before a data breach harms the product’s users and the company’s reputation. There can be direct savings through good risk planning and mitigation, allowing us to better plan the budget.
Going slow or in the wrong direction
Various inefficiencies can happen within a product development team, often leading to delays and poor-quality code. Unclear requirements can leave the team unsure about what needs to be built, wasting time and effort as they make assumptions or go down the wrong path. Poor communication makes this worse by stopping team members and stakeholders from effectively sharing information, updates, and feedback.
Without clear and regular communication, misunderstandings are frequent, and important details can be missed. Frequent scope changes add more complexity, as the team has to keep adjusting their plans and priorities, disrupting workflow and leading to incomplete or poorly executed features. Development won’t be cost-effective if we don’t address these or similar challenges.
Solution: We can solve some of these challenges by using various Product Discovery Workshop tools. User Personas help the team understand the target audience, allowing them to prioritize features that add the most value and avoid wasting effort on unnecessary features. Similarly, the Value Proposition Canvas ensures the product meets the needs of the target audience by clearly defining what makes the product valuable to users. This reduces the risk of developing features that do not add value and ensures the team’s efforts are aligned with user needs.
What are the savings? The more efficient and timely the delivery, the more budget remains available. This also positively affects the product’s quality, ensuring that problems don’t impact the product after launch or release.
How can you detect if a team is inefficient? From our perspective, it’s quite straightforward: our teams use the Scrum methodology, which involves using burndown charts to compare planned progress with actual progress. Additionally, they conduct team retrospectives to spot and discuss flaws in the process. Of course, these are not the only tools, but they are the ones we use most frequently.
Investment uncertainty
Deciding whether to invest in certain features can be challenging, especially when working with limited budgets. The level of uncertainty is often high, but fortunately, there are tools available that help avoid making investments based solely on the gut feelings of stakeholders or the Product Owner.
Solution: The Value Proposition Canvas can effectively answer the question, “Should we invest in the X feature?” It helps identify user needs and pain points, allowing teams to determine if the feature directly addresses these aspects. By assessing the benefits the feature would bring, the canvas helps gauge its value. It ensures the feature aligns with the overall value proposition of the product, supporting strategic investments. Additionally, it reduces the risk of investing in features that do not add significant value by integrating user feedback, ensuring that resources are allocated to the most impactful and valuable additions to the product.
Prioritization techniques are also highly valuable when managing the product backlog. By involving various stakeholders and utilizing relevant data, these techniques can effectively maximize both user and business value, ensuring the team’s work is truly impactful.
What are the savings? The Value Proposition Canvas can save money by preventing investment in features that do not bring value or support any kind of ROI (financial or non-financial). It works the other way around as well—it helps discover features that can be used for monetization.
Additional ways to test whether to invest in a feature include prototyping or, for more complex solutions and hypotheses, developing MVPs. User research and simple surveys can also save time and money, though these methods are typically more effective for products that already exist.
Product Discovery for the (financial) win
As you can see, there are many reasons to use the Product Discovery approach not only during the early stages but throughout the entire product development process, whether you’re creating something from scratch or working with existing or mature products. This way, we can optimize the value provided by the team all the way. The potential cost savings can be significant—sometimes amounting to tens of thousands of dollars—by avoiding features that don’t support product goals or by implementing features that open up entirely new revenue streams. So, see you at the workshops?
Product Discovery Workshops template
If you want to see the tools we use to build a Product Discovery Workshop agenda, you can use our template. It consist of 10 tools we usually combine to create bespoke workshops for our clients. It consist of templates for such tools like Business Model Canvas, User Story Mapping, Value Proposition Canvas and more. You can get it here.
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