No early-stage startup story is the same. However, there are a few common chapters that all early-stage startups share, fighting for the elusive product-market fit being one of them. Much like awkward teenagers gossiping about dating in high-school, product-market fit is something we all talk about, very few understand, and even fewer honestly have experience with.
But seeing as product-market fit has become such a hot topic for founders over the last decade, there are now many free “how-to” guides online that are more designed to get clicks than to actually be helpful. But there is no one-size-fits-all approach to understanding this abstract behemoth.
It is then no surprise that product-market fit workshops are one of the most popular operational support offers from the Growth team as part of Platform+.
Through being a serial-founder myself, and then working with many early-stage startups over the years, I’ve also come to discover another similar trait among founders. Like blinders on a horse, founders can easily get wrapped up in their day-to-day activities and miss what’s happening around them. As a result, many founders believe they have found the mysterious maiden of product-market fit, when in reality they are not even close.
There are some common phrases I’ve come to decipher as meaning, “We don’t have a product-market fit yet”:
If we just add this new feature, people will buy our product!
Let’s try this other audience; they might be more likely to buy!
If either of these sound familiar to you, then it’s worth having a hard conversation with yourself and your team.
The easiest way to approach this is by looking at the data. Map out the whole customer journey and then match each action to an event and measure it. This will enable you to understand areas where your customers may be struggling to either use your product or understand the value that you are trying to deliver to them. (I’ll be releasing a future article on how to get started with tracking and measuring in early 2021. So be on the lookout.)
“Behind every beautiful thing, there’s some kind of pain.” While Bob Dylan most certainly wasn’t referring to a company during their journey on discovering product-market fit, it’s still a fitting quote to show how a customer’s pain should be the key thing driving founders to create something beautiful.
The most successful companies come from addressing a specific pain of a customer, resolving that pain, and then matching it to the demand of that market. And it’s important that when you’ve uncovered a pain point, you must then determine if it is big enough to create market demand. That’s when you know it’s worth the investment to build a solution.
Consider the pains of trying to book a taxi. Put in the effort to find a taxi company. Wait for it to arrive. Hoping you have enough cash to pay for it. Uber saw the market created by those pains and developed a product that serviced them.
Another company that had a similar mission was Segway. But their urban mobility solution wasn’t a drastic improvement over public transportation, bicycles or even walking. So their products fell into the realm of “gimmicks” and never achieved product-market fit.
It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.
— Charles Darwin
As technology, markets and competitors evolve, so will the type and severity of your customers’ pain. Additionally, as your product or service is used by your customers, you may discover that their expectations are simply not being met, or that the user experience is turning your customers towards an unwanted direction.
Back in 2010, a team in San Francisco developed an application named Burbn, a mobile check-in app similar to Foursquare. Upon further analysis, they found that the most popular product feature was photo-sharing. They dialed back the other features, re-positioned their product and renamed it “Instagram”. The rest is history.
Becoming complacent with your offering and the market is signing your own death sentence, something that couldn’t be more apparent than in 2020. What was relevant at the start of the year was no longer relevant by the end.
Many people tend to forget that product-market fit is an iterative process. It’s a constant battle to gain traction and relieve the shifting pains of your customers. Also, as you expand your product to new markets or new services and features are introduced, the search for market fit begins all over again.
Product-market fit can’t be bought. It can’t be faked. And it most certainly can’t be kept forever. You need to work at it.
Regardless of what stage a company is at, the key thing is to constantly be talking to your customers, never become complacent and always be looking at the position of your market to your product.
Authored by Jon Butterfield, Head of Growth on the Speedinvest Platform+ team. The team has first-hand experience guiding companies through every stage of startup expansion. They help founders develop strong go-to-market strategies, build killer strategic narratives, as well as define and measure product-market fit. For companies further along in their journey, they assist with fine-tuning customer engagement and retention through opportunity and product-led growth models and strategies. Through it all, they keep a focus on market segmentation and digital marketing, ensuring the right customers find your products at the right time.
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