5 Tips for Getting to Product-Market Fit
For many start-ups, finally getting to product-market fit seems like the holy grail. Here are five things to keep in mind along the way.
Getty
Every start-up chases that goal known as “product-market fit" -- the semi-scientific point where a company or product reaches scalability. In our case, we had to chase down three different hypotheses before we found the one that led us to product-market fit. (You can read more about our journey here).
While you’re working hard to find the right spot for your own product, or the right product for a market you know well, it’s important to keep in mind the indicators of true product-market fit.
Business Hypotheses
Make sure you’re asking the right questions. For example: How much capital are you willing to dedicate per theory? That will set the tone for how you go about trying to find the right fit. Every great business starts with a business need or a solution to a problem.
Beware of False Positives
It’s important to keep a neutral but open mind. It’s easy to pounce on any evidence of activity as success, but first adopters are not always the best adopters.
For instance, in the beginning, a few customers may be willing to pay $100 a month for your service. But if there aren’t enough of them (say less than 10,000) or if the expense to acquire a user is more than the amount you can charge them for three months of your service, you may not have business model after all. It may actually be smarter to go after fewer larger clients or users.
Minimum Viable Product (MVP) vs. Minimum Sellable Product
If you’re in the enterprise space, you may be able to sell a product that isn’t built yet. But if you’re going after consumers, you usually need to be able to present them with a minimum viable product.
The difficulty arises when you have a minimum product that works, but it isn’t robust enough, or doesn’t have enough features, for you to be able to charge for it. The question you might ask yourself is, “How far away are we from a chargeable or billable product?” If you don’t know, ask potential users what they’d like to see you add, or get the opinions of those that passed.
Check your hypothesis
How many days or weeks are you willing to spend collecting data? How long until you know you are successful? This is a refreshing framework to give yourself and your team. While some sales cycles are slow and can require months of hard work, ask yourself and your team how long you are willing to go before taking lessons learned and evolving the product.
Does your family use it or get it
Would you use your own app? Even if it’s corporate or enterprise-driven? Would your aunt, mom or dad use it? If a family member doesn’t use it, or can’t understand it, you’ve got a problem. Either you’re not properly communicating the value of what you’re doing, or you’re not solving a problem.
