Tag: What is Product market Fit?

According to Marc Andreeson, Product-market fit means entering a good market with a good product that can satisfy that market. A lot of tech ventures assume they have achieved this when in reality they haven’t. Are they clear cut ways to attain sustainability with target customers and how can startups get around to hacking this function? Let’s find out. What Exactly is Product-Market Fit? Apart from satisfying the market, what P-MF translates to is a product’s ability to hold its own in the market as a suitable solution that is easily adoptable by its ideal customers. This means both adoption and customer retention to a good extent would be at a level headed percentage if not at a higher degree. It depicts an in-depth understanding of who your customers are and what they think about what you’re building, this in turn shapes the direction of your product building to better mirror what would serve your target audience. What Makes it so Important? The main problem is that most companies think they have a handle on what product-market fit is when really, they do not. You’d ask why it is such a big deal, because really it is. If you’re in the business of attracting investors then turn that “big deal” into “a very big deal”. No one wants to invest in a venture that doesn’t have a high potential of scalability and sustainability in its market. By now, you should know that P-M Fit is something you have to have on lock and key. The reasons? Market Viability You know how they say from zero to hero? Let’s add “From hero-zero, otherwise leave it at a zero”. Transforming your idea through well thought out, strategic and thorough research into a product that has substantial demand is one of the many factors that make attaining product market fit important. It's taking the necessary measures to cross your Ts and dot your Is and in some situations, scrap the idea totally (yeah, you read right). It’s also one of the many reasons experts say that in the journey towards achieving product market fit, you have to be okay with the fact that what you started with, might not be what you end with. And that has to be good enough for you because the end goal is always unlocking a better opportunity to enable quicker and easier acceptance of your product by your target audience. Not to mention that it cuts down on the potential risk of investing time, energy and resources into what your potential customers do not have any need of. Customer Satisfaction Who’s going to buy your product or use your service? That’s right! Your customers. Will they use it if it doesn’t solve their needs or addresses their pain point? You’re right again. No! Last question, do you want to be the one to build what doesn’t solve a need? That’s more of a personal answer. But you should know this for free, what doesn’t address your customer’s needs is a fail. It’s the reason Product-Market fit is significant. It helps you firstly to identify who exactly your customers are through market research (so you’re not doing a mismatch like you sometimes do on tinder_ or not). This enables you to create customer personas that you hold as your customers and then tailor your product to meet their needs. A product that is tied majorly to meeting the needs of their customers will earn their loyalty, continuous referrals, and much bigger chances of exploring unpaid forms of marketing. Here’s an accompanying secret though: The product has to be good. It has to speak for itself. Functional and with a good user experience and definitely not neglecting the domino effect of impeccable customer service. Revenue/ Profit Generation That a good product will sell itself is somewhat true (you do need a solid marketing tema though, there’s no escaping that). A good product is one that meets your customers needs hence they would come back and buy more, refer you to even more people which would increase your revenue margin and broaden your income. Investment Opportunities Amongst the many things investors want to know about your startup, what it looks like after achieving product-market fit is top shelf. Are people willing to pay for it? How is its performance in the market? Market size and your retention rate. These are important metrics for anyone that would be part of funding your venture. Unique Value Proposition What exact benefit is your product offering users? Better price? Better quality? Speed? Luxury? Better Customer service? Whatever edge your product gives your customers is your offering to them and stands as what sets you apart from your competitors. And if you’re operating in a saturated niche, all the more reason you need to achieve P-M Fit because a part of your extensive research is what your competitors are offering their customers and the gaps that are extinct. This is so you can know what you should offer and how you can offer it. Essentially, just accept the fact that your journey to market should include product market fit. How To Achieve Product-market Fit While it’s not as calculable as people would prefer for it to be, it is certainly achievable following certain steps. These steps include re-iterative procedures towards validating your product in the market and for your target customers. The author of The Lean Product Playbook, Dan Olsen listed 6 steps Determine your target customers Identify underserved needs of that customer Define your value proposition Specify your minimum viable product Create your MVP prototype Test your MVP with customers Let's add this: when trying to achieve “harmony” with the market, understand that it is not one size fits all and that no one is expecting a hundred percent synergy with your target customers (quite frankly that is impossible). However if half or at least more than half of your testers/customers find your product satisfactory up to the point of referral then you should be good to go. In addition to this, while it sounds like product-market fit is customer centric. What it also sounds like, is being able to run at a profitable rate and not losing money. This means you also have to focus on a scalable business model and mode of operation. As a startup and for a lean one, finding quick and effective bootstrapping method of operation and marketing in your journey towards product market fit guarantees you reduced marketing cost for After Product-Market Fit (APMF) How To Measure Product-Market Fit There are tell-tale signs to monitor the impact of your P-M Fit journey. These signals are centered around the adoption, retention, churn rate and referral of your product. How many people are using your product as opposed to your competitors? How many see your product as a worthy alternative to already existing solutions? How many people retain usage of your product after a specified time period? How many people drop off immediately after using your product and why? How many people refer your product as a solution to friends and family? Answers to these questions are crucial in order for you to measure whether or not your product is heading towards the right direction. The part about product market fit that involves reiteration comes from the answers you’ll get from these questions. As often as you get feedback, you should go to the table and implement germane suggestions. Pro-Tip: The questions you ought to ask should be in alignment with whatever metric measures growth/ adoption for your product.

Tag: What is Product market Fit?

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