Why you need product market fit
For a product to be successful, it needs to have product-market fit. But what exactly is it? Put simply, it's when a product meets the needs of a specific market better than their current way of doing it. In other words, there's a demand for the product and they are willing to pay for it.
Why is it so important? New products face long odds. Most fail within the first few years. A big reason for this is that their value proposition hasn't solved the user's unmet need. They might have a great product, but there's no market for it. Or they might have a product that meets a certain need, but there are already established companies that do a better job of meeting that need.
Obtaining it can be the difference between success and failure for any product. It's important to remember, however, that once you have product-market fit, you're not done. You still need to work hard to maintain it and grow your business. But if you can achieve and keep it, you'll be well on your way to building a successful product.
How can you tell if you've achieved it
There's no one answer to this question since it can vary depending on the product and the market. However, there are a few key indicators that can give you a good idea of whether or not you've achieved product-market fit:
- Take a look at your user acquisition channels. Are you seeing consistent growth in the number of users coming through each channel? If not, it could be a sign that you haven't yet found the right market for your product
- Look at your retention rates. Are users sticking around and using your product regularly? If not, it could be a sign that they're not finding enough value in your product
- And ask yourself whether or not you're seeing organic word-of-mouth marketing. If people are talking about your product without you having to promote it, it's a good sign that you've found a winning combination of product and market
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Common symptoms
When you're starting a business, it's important to make sure you have a product that people want to buy. If you don't have product-market fit, your business will likely suffer from some or all of the following symptoms:
1. You're not growing as fast as you should be. If you don't have it, your growth will likely stall at some point. This is because you won't have enough customers to sustain your growth
2. Your churn rate is high. If you have a high churn rate, it means that people are leaving your product or service at a higher rate than they're signing up for it. This is usually a sign that people aren't using your product or service the way they intended to, which means they're not getting the value they expected from it
3. You're not making enough money. If you're not making enough money, it's probably because you don't have enough customers to support your business. This can be a problem if you're not able to expand your customer base
4. Your employees are unhappy. If your employees are unhappy, it's likely because they're not seeing the results they were hoping for from the company. This can lead to low morale and high turnover rates
5. You're losing interest in the business yourself. If you're losing interest in the business, it's probably because it's not going the way you wanted it to. This can be a sign that you need to pivot or make some changes to your business model
Achieving it fit in the first place
In a nutshell, product-market fit means having a product that meets the needs of a defined market that is better than its current state. This requires doing extensive market research to identify a potential market for your product and then developing a product that meets the needs of that market. Once you have a product that meets the needs of a defined market, you need to get it in front of potential customers and get their feedback. This feedback will help you fine-tune your product and make sure it is meeting the needs of your target market.
The best way to go about achieving this is through Sean Ellis' question "How Would You Feel if You Couldn't Use The Product Anymore?" If 40% or more of your users answer they would be "Very Disappointed", then you have achieved it. This number varies depending on what industry you are in, but usually around the 40% mark is a good indicator that you have found a group of people who love your product and can't live without it. From there, it's all about scaling and growing your user base.
Staying on track once you've achieved it
Achieving it is a huge accomplishment, but it’s only the beginning of the journey. Once you’ve found a product that people want or need, you have to continuously work to stay ahead of the competition and keep your customers happy.
Just because you’ve found a successful product doesn’t mean you can stop innovating. continuous discovery is essential for keeping up with the ever-changing needs of your customers. Talk to them regularly and solicit feedback so you can continue to improve your offering.
Always be prepared to pivot. The market is constantly evolving, and what works today might not work tomorrow. Be flexible and willing to make changes to your product if necessary.
Don’t forget about marketing. Even if you have the best product in the world, you won’t be successful if no one knows about it. Invest in marketing and make sure people are aware of your offering.
Final thoughts
In sum, product-market fit is vitally important for any company and there are a few key ways to go about achieving it. Once you've achieved it, it's important to stay on track by constantly reevaluating your position in the market and making sure you're still meeting customer needs. Thanks for reading!
