- What’s product/market fit?
- Why is it so important for my business?
- How do I go about finding it?
Do you know what the single worst marketing decision you can make is? Starting with a product nobody wants or needs.
For example, imagine there’s a business called Nice-Ice. They make a product that turns fresh, falling snow into delicious, colourful slushies the whole family will enjoy.
Nice-Ice needs an environment where it snows often, so the company targets people living in colder climates. But did Nice-Ice think about whether this audience really wanted snow slushies or not?
- Does Nice-Ice know for sure that people in freezing weather crave a frozen treat?
- Can they rely on the weather to supply enough constant snow?
- Do they know how people will react to things like yellow snow (ick)?
That’s a “no” on all counts. Nice-Ice is in danger of not having a product/market fit.
Product/market fit, or PMF, is being in a good market (big or profitable enough) with a proven and verified product that people in that market want and need.
It’s hugely important. You can have the best team and the best product, but it doesn’t matter if the market isn’t there or your product doesn’t properly meet the market’s needs.
That means PMF is something you must nail early, as in before-you-spend-a-lot-of-money-and-build-your-product early.
But what if you’ve already built your product? Well, it’s pretty easy to tell if PMF is happening or not.
IS THIS A SIGN OF GOOD PMF?
- Your products are selling like crazy. (Yes)
- Word of mouth isn’t happening. (No)
- Your customer base isn’t really growing. (No)
- Your revenue numbers are climbing. (Yes)
- You’re hiring new staff as fast as possible. (Yes)
- You have to pay for every customer you get. (No)
- Potential customers often don’t end up buying your product. (No)
Okay, you probably get the point that PMF is a pretty great thing to have. But finding it doesn’t happen by accident. It takes a lot of research.
To get PMF, you need to come up with a business hypothesis, create a minimum viable product (MVP), and test the two against each other.
To come up with your business hypothesis, ask yourself: Who will use my product? What problems do they have? How can my product help solve their problems?
Next, create an MVP. It’s your product in its simplest form. You can use it to help you test and prove your hypothesis to make sure you’re solving people’s problems (and attracting a good amount of interest).
To test your MVP, ask: Do people care about my product? Do they use it regularly? And see if you can track how they’re using it so you’ll know if what you’re doing is right.
If your MVP doesn’t support your hypothesis, you might have to pivot – AKA course-correct to test a new hypothesis or strategy. It’s actually pretty common, so don’t worry.
You might focus on a more compelling product feature, redesign for a new market, create a different hypothesis and solution, or find an entirely new idea. Regardless, it often means major product revisions or possibly starting over again.
For example, Airbnb wasn’t always a community-driven hospitality company. It used to revolve around air mattresses on a living room floor.
Originally called airbedandbreakfast.com, Airbnb started during a popular design conference in San Francisco. The founders offered attendees their airbeds in their living room as well as breakfast.
They had some early success but wanted a better PMF. So instead of focusing on just conferences, they pivoted to go after travellers who needed a place to stay anywhere in the world.
They began to bill their service as a way for travellers to find local, authentic accommodations and network at the same time. And, of course, get free breakfast every morning.
After listening to feedback, they became Airbnb and started helping anyone list or book any type of accommodation (castles, private islands, etc) in 31+,000 cities around the world. And the rest is PMF history.
Let’s do the first step for finding PMF: Create your business hypothesis.
- What is the name of your product? (Vohu Studio)
- What is its purpose? (create elegant and functional custom designs)
- Who are your target customers? (entrepreneur, startups and brands)
- What problem does your customer have? (lack of experience and knowledge of IT and Art)
- How does your product solve this problem? (designing persuasive and functional websites and apps)
Your first draft of a business hypothesis:
Vohu Studio is designed to help people create elegant and functional custom designs. It solves this issue, lack of experience and knowledge of IT and Art, for entrepreneur, startups and brands by designing persuasive and functional websites and apps.
References: Google Webmasters, Think With Google, Google Primer