6 lessons learned from product discovery mistakes with Hosty

In 2017, Chris Hatfield and his Facebook team spent over a year developing a tool for video creators for content and community management. However, they overlooked the creators' main need: monetization. Despite clear signs of an error, they continued to invest in the product. They’ve already spent money and have a deadline coming, so why stop there? Long story short – the product failed and was suspended. 

Why are we telling you this? To prove one point: product discovery sets the course for software development. If done wrong, you risk building a solution that misses the mark — wasting time, resources, and alienating your target audience. 

Ever wonder why 90% of startups fail? Here's a shocking truth: many failures happen before a single line of code is written. The culprit? Product discovery mistakes. And this doesn’t happen only to new startups — seasoned companies make mistakes, too. In this article, we will break down the main mistakes we made with our first product, Hosty, and share lessons learned.

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Is product discovery really that important?

Let’s take a moment for some theory. What is product discovery? It’s identifying and validating the needs and problems of your audience to create a product that truly resonates with them. It involves market research, user discovery sessions, and prototyping to understand user behaviors, preferences, and pain points.

Research shows that companies invest $29.5 billion every year in developing features nobody will ever use. Don’t think it’s your case? Users seldom or never utilize 80% of features in an average software product. In a world where product discovery mistakes can lead to billions of dollars wasted, product exploration is the make-or-break phase where companies determine if their idea has the legs to go anywhere.

What happens when the discovery phase of a project is omitted or done wrong? 42% of startups fail because of misreading market demand, and 70% of product development projects fail during the development stage. 

Now that we've seen the devastating consequences of product discovery gone wrong, let's check the common pitfalls startups fall into.

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Typical product discovery mistakes

Your product discovery team can fall into a graveyard of good intentions, too. Whether you're in UX agile discovery for a travel or healthcare product, ecommerce product discovery, or any other form of product development, these insights will help you steer clear of the pitfalls that doom so many promising ideas.

Inadequate user research

This mistake is about conducting limited or biased user research, creating an echo chamber that reinforces existing beliefs. It’s often caused by groupthink — a phenomenon where members of a group strive for consensus and avoid dissenting opinions, leading to poor decision-making, and a psychological discomfort experienced when holding conflicting beliefs or attitudes.

Why it happens: Teams often seek validation rather than challenging their assumptions during the discovery phase. The comfort of agreement can overshadow the need for diverse perspectives in agile discovery.

How to avoid It:

• Implement diverse sampling in your product discovery interviews
• Use anonymous surveys for honest feedback in the product discovery process
• Conduct "devil's advocate" sessions to challenge ideas during agile discovery

Neglecting data in problem discovery

This mistake involves relying on intuition rather than data during product discovery. It's often caused by overconfidence bias, leading to premature convergence on solutions without fully understanding the problem.

Why it happens: Assumptions are quicker and easier than gathering and analyzing data. The pressure to move fast leads to skipping product discovery steps.

How to avoid it:

• Frame assumptions as testable hypotheses in your product discovery framework
• Establish key metrics and KPIs early in the product discovery process
• Conduct rigorous user testing and market validation to prove or disprove assumptions

Overextending the discovery phase

Sometimes, discovery teams get lost in data without taking action, prolonging the product discovery timeline. The exhausting number of decisions after a long session of decision-making results in decision fatigue and the inability to take action.

Why it happens: Fear of making wrong decisions leads to overthinking and procrastination. The desire for perfect information prevents progress in software product discovery.

How to avoid it:

• Set deadlines for decision-making in your product discovery roadmap
• Embrace an agile discovery approach with iterative "build, measure, learn" cycles
• Implement timeboxed discovery sprints to balance research and action

Ignoring user segments in product exploration

Another product discovery mistake involves ignoring each user segment's need. This ends in product-market fit misalignment, where the product fails to satisfy the needs of different user groups.

Why it happens: It's simpler to think of users as a monolithic group. The complexity of addressing multiple segments can be overwhelming.

How to avoid it:

• Develop detailed user personas and jobs-to-be-done
• Conduct segmented research for each user group
• Design products with customizable features to meet varied user needs

Leading questions in product discovery interviews

This mistake involves unconsciously steering research participants toward desired answers to product discovery questions, leading to skewed data and false insights that misdirect product development.

Why it happens: Confirmation bias influence product discovery interview questions. Researchers may unintentionally seek to validate their existing hypotheses.

How to avoid it:

• Use neutral language in product discovery questionnaires
• Ask open-ended questions that encourage detailed responses
• Consider having unbiased third parties conduct discovery sessions
• Implement blind data analysis to reduce bias in interpretation

Don’t ask: “Would this feature enhance your work?”. Rather ask: “What aspects of your work would this feature impact, and how?”. This way, you can gather more accurate and valuable insights.

Treating product discovery as one-time event

Viewing product discovery as a finite phase rather than an ongoing process ends up in missed opportunities, misaligned priorities, and ultimately, a product that fails to meet user needs. 

Why it happens: Traditional waterfall approaches create artificial divisions between discovery and execution. 

How to avoid it:

• Implement continuous discovery alongside development in your product management discovery process
• Schedule regular reassessments of market conditions and user needs
• Establish feedback loops for ongoing user input throughout the product lifecycle
• Use product discovery frameworks that emphasize iteration and continuous learning

A software company conducting extensive research during its initial discovery phase but failing to reassess after launch has a fair chance of missing critical changes in user behavior.

Ignoring market research

Neglecting competitors and market trends is no good: you might miss key market opportunities or duplicate existing solutions.

Why it happens: Teams can over-focus on their ideas and desired users during client discovery. Sometimes, the product discovery team develops tunnel vision, unintentionally ignoring the broader market context.

How to avoid it:

• Conduct competitive analysis as a core part of your product discovery steps
• Regularly update your understanding of industry trends and emerging technologies along the discovery phase of a project
• Include diverse perspectives in your discovery sessions to challenge assumptions about the market
• Use product discovery software that integrates competitive intelligence features

These mistakes are extremely common throughout all industries and product types. To secure the success of your project, our expert discovery phase services will help you uncover hidden opportunities, validate your ideas, and minimize risks.

Our product discovery team won’t ask, "What features should your product have?". Instead, we ask: "How does the solution compare to existing alternatives in the market?". This way, we gather more insights about your product's positioning and unique value proposition.

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Discovery phase mistakes we made with Hosty

At COAX, we know the importance of discovery phase. It's where ideas are born, validated, and shaped into solutions. However, as we learned with our hospitality management software, even the most well-intentioned product discovery process can go in the wrong direction. 

Mistake #1: Misguided competitor analysis

We focused solely on large hotel chains, completely overlooking the booming vacation rental market. This narrow focus skewed our entire product discovery framework, leading us down a path misaligned with real-life market needs.

Key oversights:

• Failing to conduct a comprehensive market analysis during the discovery phase
• Overlooking emerging market trends and potential competitors
• Neglecting to consider the diverse landscape of hospitality providers

Mistake #2: Targeting the wrong audience

Our second blunder came in the form of flawed user research. Our sample size was limited to cover client discovery. We based our entire product exploration on a handful of interviews with hotel managers, ignoring the vast and diverse landscape of hospitality providers.

Key oversights:

• Neglecting to diversify our research sample in the client discovery process
• Failing to identify and validate our target audience
• Overlooking the needs of small property owners and vacation rental managers

Mistake #3: Asking the wrong questions

Even when we did conduct interviews, our product discovery questions were too broad. We asked vague questions like "What features would you like in a management system?" instead of digging into specific pain points and workflows.

Key oversights:

• Failing to develop specific and targeted product discovery interview questions
• Not focusing on understanding user pain points and workflows
• Overlooking the importance of qualitative data in the discovery process

Mistake #4: Ignoring market trends 

We failed to recognize the growing trend of mobile-first solutions and the increasing popularity of vacation rentals over traditional hotels. This oversight led us to develop a desktop-centric application that didn't align with user preferences.

Key oversights:

• Failing to stay updated on industry trends and technological advancements
• Overlooking the importance of mobile solutions in the hospitality sector
• Not considering the changing behaviors and preferences of travelers

The outcome

The culmination of these mistakes was predictable in hindsight. We poured months of effort and resources into developing a desktop application tailored for large hotel chains. It wasn't until we were knee-deep in development that we realized we had completely missed the mark.

Starting the problem discovery all over again

Faced with the reality of our situation, we made the tough but necessary decision to start digital product discovery over. This time, we approached our product management discovery process with humility and determination to learn from our mistakes.

We completely overhauled our discovery sessions, targeting a different audience: owners of vacation rentals, small B&Bs, and boutique hotels. This shift in focus opened up a whole new world of insights and opportunities.

Key action: Conduct extensive interviews and surveys with a diverse range of small hospitality providers.

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What we learned from our product discovery mistakes

While painful, our initial failure with Hosty led to significant improvements in our product discovery techniques. We've developed a more robust product discovery approach by analyzing our mistakes and integrating the lessons learned from each. 

Here are the key lessons we learned.

Lesson #1: Conduct a comprehensive market analysis

Mistake: We focused solely on large hotel chains, overlooking the vacation rental market.

Lesson: Conduct a thorough market analysis that includes emerging trends and diverse market segments. For example, had we analyzed the growing vacation rental market, we would have identified a crucial target audience earlier.

‍Key takeaway: Diversity in research. Use tools like SWOT analysis and competitor benchmarking to gain a comprehensive market view.

Lesson #2: Validate target audience assumptions

Mistake: We based our product on interviews with a handful of hotel managers.

Lesson: We learned the importance of extensive user research with a diverse sample of potential customers. Creating detailed customer personas now guides our product development, and we continuously validate assumptions about our target audience throughout the discovery phase.

Key takeaway: Specificity matters. Precise questions lead to actionable insights, while vague inquiries result in unusable data. Create detailed user personas and continuously validate assumptions throughout the discovery phase.

Lesson #3: Ask targeted questions and dig deep

Mistake: We asked vague questions like "What features would you like in a management system?"

Lesson: Develop specific product discovery questions focused on user pain points and workflows. For example, "How do you currently manage bookings across multiple platforms?" or "What's the most time-consuming part of your daily property management routine?"

‍Key takeaway: Use a mix of qualitative and quantitative research methods in your product discovery process to gain deeper insights. The "5 Whys" framework will help you uncover the root causes of user problems. Incorporate scenario-based questions to understand how users might interact with your product in various contexts.

Lesson #4: Adapt to market trends

Mistake: We developed a desktop-centric application, ignoring the trend towards mobile solutions.

Lesson: Prioritize solutions that align with user preferences and behaviors. In Hosty's case, this meant pivoting to a mobile-first approach after discovering that small property owners preferred managing on the go.

Key takeaway: Regularly reassess user needs and adapt your product development accordingly. Be prepared to make significant changes if problem discovery reveals misalignment with user preferences.

Lesson #5: Prioritize user needs

Mistake: We overlooked critical communication needs while focusing on complex management features.

Lesson: Prioritize features based on actual user needs, not assumptions. For instance, we later discovered that simple, efficient guest communication tools were more valuable to our users than advanced inventory management features.

Key takeaway: Use product discovery solutions and techniques to prioritize features. If users prefer simpler solutions (like spreadsheets for certain tasks), focus on enhancing other areas where your product can add unique value.

Lesson #6: Adopt an agile discovery process

Mistake: We spent months developing a product before realizing it didn't meet market needs.

Lesson: Adopt an agile discovery process that allows for rapid iteration and course correction. For Hosty, this meant developing a minimum viable product (MVP) focused on core features and iterating based on user feedback.

Key takeaway: Use agile discovery techniques like sprint reviews and retrospectives to continuously refine your product based on user insights.

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Final message from our product discovery team

The Hosty case revealed the real value of details in product discovery. As we've seen, the discovery phase is not just a preliminary step, but a continuous process that can make or break your product's success. Mastering the product discovery process is more than just avoiding mistakes — it's about curiosity, user-centricity, and continuous learning. 

By embracing these principles and implementing the lessons we've shared, you can increase your chances of developing products that truly resonate with your audience. Along your product exploration journey, remain open to new insights, and let the discovery process guide you to success. Remember, the goal is not to confirm your existing beliefs but to challenge them and ultimately create solutions that solve real problems for real people.

Still having doubts? You can arm yourself with the hands-on experience of our product discovery team. COAX provides product strategy consulting to companies that want to make sure they create products that deliver value. We combine product design, user experience design, and development expertise in your niche to create solutions that truly resonate with your users — turning ideas into impactful products.

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FAQ

How can we make sure a product is meeting the needs of a user?

Conduct in-depth interviews, surveys, and observations to understand users' motivations, pain points, and goals. Identify the specific tasks users want to accomplish and the problems they need to solve. Release early versions of your product to a select group of users for feedback and testing. Also, involve users in decision-making processes and make their voices heard.

What is product discovery?

Product discovery is the process of identifying and validating the needs and problems of your target audience to ensure you build a product that truly resonates with them. It involves market research, user interviews, and prototyping to understand user behaviors, preferences, and pain points before significant resources are invested in development.

How do you do product discovery?

Use a mix of techniques such as competitor analysis, user interviews, surveys, prototyping, and usability testing throughout the process.

What are the product discovery questions examples?

Product discovery questions are targeted inquiries designed to uncover user needs, pain points, and behaviors. Here are some examples: 

• "How do you currently manage [specific task]?"
• "What's the most time-consuming part of your daily routine?"
• "Can you walk me through your process for [specific activity]?"

Should the scrum team participate in the product discovery process?

Yes, the scrum team should participate in the product discovery process. This ensures that technical feasibility is considered early, the development team understands user needs firsthand, and cross-functional insights are incorporated into the discovery process.

How long is the product discovery phase?

The length of the product discovery phase can vary depending on the complexity of the product and the market. However, it's crucial to understand that product discovery is not a one-time event but an ongoing process.