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What is product discovery and why does it matter?

When you start working on a new product—or a new initiative on an existing product—do you already know exactly which problem your product needs to solve for your customer?

Probably not.

At the start, you work with assumptions and hypotheses about what you need to do and whether it makes sense for your customer.

Last updated

16 Jun 2023

Reading time

9 min


Product discovery

Maybe in an ideal world, your team would clearly understand your customer’s needs before starting a new product or initiative, but customer needs change, and your product initiatives must change with them. 

Enter continuous product discovery, which helps you understand:

  • How your product solves a specific problem for your customers

  • How your product helps your customers accomplish their jobs to be done (JTBD)

  • How your product can evolve and continue to serve your customers

Ready to make informed product decisions?

Hotjar helps you understand how people use your products, so you can build the products that your customers need and love.

What is product discovery?

Product discovery is the continuous process of learning how your product can better serve your customers. It helps you understand what product your team could build, whether you should build it, and what you need to know about your customers to build it right

To better understand product discovery, start by answering the question, what does a product manager do? The answer, in short, is that product managers drive user understanding, decide which product initiatives to prioritize, build stellar product teams, and push for a better product-market fit.

And to do this, product managers work with product teams in both product discovery and product delivery activities, which includes performing:

Your approach to product discovery depends on whether you’re starting work on a new product or you’re improving an existing one:

  • When you start work on a new product, focus your product discovery on understanding your potential customers and their problems, and identify what solution your product could offer.

  • When you’re improving an existing product, focus your product discovery efforts on identifying the changes you can make to your product to increase customer delight. Product experience (PX) insights are invaluable to help you build this understanding.

5 ways product discovery helps product teams

Product discovery uncovers the information that product teams need to ensure you’re working on products that matter—and which will provide the most value to your customers. 

Here’s a look at five ways product discovery will help your team:

1. Find product-market fit

If you’re introducing a new product, one of your first goals is to reach product-market fit, which happens when you know your ideal customer and serve them with the right product.

And the right product solves a problem for your ideal customer in a way that benefits your business.

To achieve product-market fit, you need to know:

  • What problem is your ideal customer trying to solve?

  • Is it worth it to a customer to have that problem solved?

  • What solution will solve that problem?

Product discovery helps your team uncover information to establish answers to those questions. And with that information, you can build an initial version of your product, or an MVP, and collect customer feedback to confirm whether you've uncovered a meaningful problem and built a solution that will work.

2. Validate assumptions

Assumptions play a factor in all of your product decisions. 

Whether you’re trying to achieve product-market fit for a new product or you’re determining what changes to make to an existing product, you're going to assume something.

For a new product, you might assume:

  • Your potential customers experience the problem you’re solving

  • People will spend money to solve that problem

  • They'll use your product to solve that problem

  • Customers will use your product as you intended

For an existing product, your assumptions might include:

  • People use your product in the way you intended

  • People use your product to solve the problems you thought they were solving

  • People will use your product more if you make certain changes to it

Product discovery helps you address assumptions in a couple of ways: 

  • It helps you validate or disprove your assumptions.

  • It helps you avoid acting on assumptions by providing a clear picture of your customers and their needs. 

For example, Conan Heiselt, a UX Designer at Techsmith, collects information about how people use Techsmith products as part of his product discovery efforts:

"The further you go without concrete data, the more leaps you’re making. That’s why we come back to the data very regularly—to validate it and make sure we’re on track. That means we're making fewer assumptions, which also means we’re making fewer mistakes in the end."

3. Identify the features that customers need and love

Product discovery helps you build empathy with your customers so you have a deep understanding of their needs—and how they would most like to satisfy those needs.

Your team can then apply that knowledge to identify the features that customers need from your product, and design those features in a way that customers will love.

For example, when the team at Reed.co.uk starts work on a new initiative, they gather their team together and look at Hotjar Session Recordings to submerge everyone on the team in the customer journey. This helps the team build empathy with their customers and determine if a feature idea they’re considering will be a hit.

4. Identify the features that need improvement

Sometimes you don’t need to add features; you just need to fix the ones you already have. Product discovery gives you insights into how people use your product so you can identify small changes that'll have a big impact. 

For example, Rachel Stephens, an SEO & Customer Behavior Analyst at Totally Promotional, explains how she used Hotjar Session Recordings for product discovery to see why the team wasn't meeting sales goals. One specific use case from 2017 stands out: 

“A few months after we launched our line of custom pens, we noticed that sales were less than desirable,” Rachel explains. “We reviewed Hotjar Recordings to see where users were struggling or if something was causing them to leave our site.

"User Recordings made it clear that users did not understand the order process we had in place. So, we changed the format of the order form and added additional information to clear up any possible confusion. The insights Hotjar revealed helped us better meet user expectations.”

5. Avoid building features your customers don’t need

Product discovery helps you understand what your customers truly need, and as a result, it helps you avoid building things your customers don't need

This may be one of the greatest advantages that product discovery gives you. 

If you can gather information during product discovery to indicate or confirm that you don't need to build a new feature or product, you can turn your attention to building products that you know will delight your customers.

For example, when you use Hotjar’s Incoming Feedback widget—which acts as a real-time suggestion box—for product discovery, you can identify features that don’t meet customers’ needs and make customer-led decisions on whether to keep, remove, or change them.

3 keys to successful product discovery

So if product discovery is so great, everyone should want to do it, and it should be easy, right?

Well, no. 

Some conditions need to be in place for your product discovery to be truly effective. Without these conditions, you end up with 'discovery theater'—doing the activities that look like discovery, without learning anything as a result.

Here’s a look at three key conditions.

1. Make product discovery a continuous activity

One of the big failings of waterfall techniques is the lack of continuous feedback mechanisms: product teams do a lot of analysis, research, and design at the beginning of an initiative, which is always helpful, but they don't circle back and consider what they learned through the act of actually building some of the product.

Keep in mind that 'discovery' isn't just a new name for the analysis, research, and design phases. In any product development endeavor, you can't fully understand your solution until you’ve built part of it, have put it in the hands of your users, and have received feedback.

That's discovery.

And it doesn't happen only at the beginning. Instead, incorporate discovery throughout your entire product development process.

That’s continuous discovery.

Adopt an approach such as dual-track agile, where a product trio (a product manager, product designer, and tech lead) does some discovery work on a small subset of the overall solution. 

With dual-track agile, the product trio captures the results of their discovery work into backlog items. The team then discusses those items during backlog refinement to ensure everyone has a shared understanding. Then, if it's decided that the backlog items will drive progress toward an outcome, they're included in sprint planning. 

Then you build, deliver, and get user feedback.

The product trio then uses that feedback to guide their next product discovery efforts.

In this way, you create a virtuous cycle where product discovery feeds product delivery, and product delivery feeds product discovery, and on and on it goes: what you learn by delivering iterations of your product feeds back into product discovery, which influences the next thing you build.

2. Build customer needs into a sellable narrative

Product discovery helps you describe your product in words your customers use, which means you can provide more meaningful messages to them about your product.

When you interview your customers, take note of the words they use to describe their problem in context. Their words may not help you identify new features or initiatives to prioritize, but they will give you the language you can use to bring attention to your new feature and increase the effectiveness of your marketing efforts.

The product narratives you create using your customers' language will help everyone in your company understand why your product is so important to your customers.

💡 Pro tip: continuous product discovery helps you make product decisions and helps you become more familiar with your customers' language. 

When you've identified the right product for your target customer, customer interviews and observations will reveal the language that will resonate most with your customers and increase their likelihood of buying your product.

Matt Lerner, co-founder and CEO at Startup Core Strengths, suggests the following four steps to finding language-market fit so you can build a product that your customers will love—and will talk about in a way that resonates:

1. Interview recent signups to uncover their struggles, hidden assumptions, and goals

Ask a new customer to walk through their purchase process from the very beginning. Find out when they first realized they needed a solution—ask them what they were trying to accomplish and what alternatives they tried. In effect, you’re trying to find out what job they were trying to get done.

2. Draft some test messages based on the interview transcripts

Consider the goals and struggles you identified through those new customer interviews. Their goals may begin with phrases like, “I want to…” or “I wish it were easier to….” And their struggles will begin with phrases like, “I hate it when…", "I’m tired of…", or "Why can’t I just….”

3. Qualitatively validate messaging comprehension and relevance

Test your product messaging by sharing it with customers and asking them to describe what it means to them.

4. Quantitatively test new product messaging

Test different phrases and messaging on paid ads to see which one resonates best with your ideal customer profile.

3. Get buy-in to spend time on product discovery

Without buy-in and internal support from cross-functional teams, your product team might feel pressured to stop discovery—or skip it entirely—and jump straight into building your product. 

But if you skip discovery, you increase:

  • Value risk: the customer won’t get value from the product

  • Viability risk: the product won’t be profitable for the company

  • Feasibility risk: the team can’t build the product

  • Usability risk: the product isn't intuitive or easy to use

To address those risks, proper product discovery requires cross-functional collaboration between product managers, product designers, and engineers:

  • Product managers approach discovery efforts to address the value and viability risks. They ensure that customers will find the product useful and that selling the product benefits the company.

  • Product designers approach discovery efforts to address usability risks. They ensure that users find the product easy to use and, as a result, can get value from it.

  • Engineers approach discovery efforts to address feasibility risks. They ensure that the product team can build their chosen solution.

Of these three roles, engineers are often the least likely to want to be involved in discovery. In many cases, engineers spend most of their time with their heads down, coding and building the actual product—but when they're involved in product discovery, they’ll build empathy with their users and learn more about the context around the problem they’re trying to solve. This empathy and context will help engineers build effective solutions and avoid solutions that don’t address the customer’s core problems.

Get started with product discovery

Now that you understand what product discovery is, why you should do it, and how to get the most from it, it’s time to make it happen.

Get your product team together to decide how you’d like to incorporate product discovery into your product development process. The sooner you start your discovery efforts, the more you’ll learn about your customers and the more likely you are to build the product they need.

Ready to make informed product decisions?

Hotjar helps you collect information about how people use your products so you can build products that your customers need and love.

FAQs about product discovery