Mapping out how to achieve product-market fit is essential in successfully building a product that satisfies the needs of a market and its potential customers.
So, you have a unique and amazing product in hand which you are ready to launch in market. Well, that’s great as you have taken one of your first big steps of your business journey! But, how will you ensure that your product is purchased and valued by people, and ultimately you are able to make money out of it. Here is when the concept of product-market fit comes into act!
Before going ahead on this, let’s start with the basics by understanding the product-market fit definition. Marc Andreessen, co-founder of influential Silicon Valley venture firm, was the first person to define it as, “Product-market fit means being in a good market with a product that can satisfy that market.” In simplified term, it basically means the ability to create a solution to address the problems and needs for your customer at the right value, available at their convenience, and you grow your business because of it.
Many businesses fail because they waste their valuable resources in coming out with a product that fails to garner interest of the customers, thereby, ending up with nobody willing to buy it. Also, there has been companies who initially were able to find out their product-market fit but eventually lost it as they did not consider to review their product market fit properly, thereby losing their foothold in the market.
Let’s take the famous example of Skype that was briefly in a state of product-market fit. The company indeed came up with an innovative idea of offering a low-priced way to talk to their connections by means of their desktops. However, what they failed in was vigilant monitoring of the market, and so when internet data via mobile became low-priced, convenient and trending, they ended up losing their unique value, eventually paving its way out of product-market fit.
So, how to find your product-market fit?
“…most start-ups fail not because they don’t manage to develop and deliver a product to the market; they fail because they develop and deliver a product that no customers want or need.”-Steve Blank
Now this indeed is not an easy task and something for which you should not try to take shortcuts. According to CB Insights, “42% of start-ups fail because their product has no market for it”. To avoid this nightmarish scenario, make sure you understand the needs and pain points your product will fix coupled with the challenges your customers are seeking to resolve. This will ensure you are rightly investing in something that has applicable in present and has a future too. As Dan Olsen, author of The Lean Product Playbook, has rightly put, “your product should meet real customer needs and does so in a way that is better than the alternatives.”
To help you get started, here are five parameters to follow when finding your ideal product-market fit.
(1) It all starts with your target customers
Firstly, you need you need to know all about the target customers, as they are the ones who will finally decide how well your product meets their needs and fix their problems. Differentiate your customers by starting with the basic question as to, ‘who will most benefit from my product?’ Besides, you should define these customers in detail by answering the following questions:-
- Who are they?
- What are they doing?
- What are the challenges they face?
- Why will they use your product?
- What is most important to them?
- What improvements do they want to see?
Group this audience into various segments on the basis of identical problems, behavior patterns, and demographics, and then create buying persona to get a clear understanding as to who your customer actually is. Now, explore their buying personae, habits, and lifestyles to establish the needs, pain points, and desires, hidden or obvious. This will help you to identify what problems your product should be solving.
Also, since it not possible to keep every customer satisfied with your product or persuading them into buying it again. So, the focus should be on identifying and listening to your high-expectation customer out of these targeted customers as these are the ones finding the highest value from your product, and also likely to circulating about your product to others.
(2) Next comes defining your product’s unique value
Your products’ value proposition basically means as to how your product will meet customer needs better than the other alternatives present in the market. To simply say, ‘what can you offer that your competitors cannot?’ You need to find out how your product can be differentiated from the competitive products. For this, you need to take into consideration of all unique features of your product will have that will enable in attracting and buying of your product by your targeted customers.
(3) Then comes specifying your Minimum Viable Product (MVP) feature set
Identify and define a Minimum Viable product (MVP) feature set for your product. These are the basic or minimum features your product should necessarily have in order to achieve maximum growth in the market. This MVP feature set is ideally divided into four sections i.e. functionality, reliability, usability, and delightfulness. Your product should comply with these four feature set if it wants to get intended Return-on-investment (ROI) in the market. However, while developing it is advised to keep it simple and achievable, as the only requirement is that it just has to work successfully.
(4) Finally create MVP Prototype of your product
Based on the minimum features you have outlined, create a prototype of the product which is to be followed by demonstrating this prototype to your targeted customers. For this, you can opt for a product-market fit survey and ask for feedback to understand whether it fits their needs, provide them the required solution or needs further improvisation. Moreover, this will also provide a platform to compare it with what other competitors are offering. Now, you need to keep reprising this process until you know your product fits the needs of your targeted consumer.
Finding your product market fit is the start; and not the end goal!
After following these essential parameters you would have a fair idea of how the market will respond to your product after launch. But, your work does not end with finding your product-market fit, as one should not forget that it is a constant work in progress, even if you have an established product; remember “product-market fit changes as your market changes”. So, in order to sustain constant product-market fit, you have to take into consideration of the anticipated changes in future and, moreover be flexible enough to adapt to the new changes and trends. However, many companies have failed because they misunderstood product-market fit. Take the case of Blackberry. Though they achieved their product-market fit with focusing on one key feature – ability to check and send email on the go. However, later on they were unable to foresee and respond to considerable changes in the cellular phone market with rise of changing needs of the customers, resultantly lost their share to competitors such as I Phone.
Indeed developing a product that fits the market is not at all an easy process be it for new product or bringing in innovative changes to the existing ones to cater your targeted customers. It indeed will require a lot a lot of patience, time and effort from your end to find your perfect product-market fit. However, rest assured once you find out then you will end up with a successful product which will be ready to capture the market and your consumers!
I hope this article helped you understand what product-market fit is and how to find yours. Have any story or experience to share regarding product market fit? Please post them in the comments!
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