What is Product-Market Fit ?
Marc Andreessen introduced the concept of product/market fit in his post. Since then it has been a guide to help us understand what you ultimately need to achieve to build a successful product.
Product/market fit means being in a good market with a product that can satisfy that market.
— Marc Andreesen, Software Engineer who coined Product-Market Fit
In simple terms, product-market fit revolves around creating a product that fulfills the customers’ needs, i.e., building the exact features that solve a user’s problem.
Achieving product-market fit is a win-win as customers get what they want, which makes them pay for it, and that, in turn, drives conversions.
This further implies that for a product to achieve product-market fit, it should be prioritizing the must-have feature set before the minimum viable product (MVP) goes out in the market, and these must-haves should be addressing the real problems of the potential customers.
Why do we need Product-Market Fit ?
Netflix case study is an ideal product-market fit example.
People wanted to get rid of the fees they paid at DVD rental stores.
Netflix solved this problem and made a successful business out of it by mailing the DVDs to the users on a subscription basis and allowing them to keep the DVDs without any time constraints. Further, as the DVD trend started to fade Netflix rewired the business model by using the streaming service.
The crux of their strategy is to modify the business model as per the customers’ changing demand, setting a perfect example of
how a product-market fit should be like.
How to Achieve Product-Market Fit?
The Lean Product Playbook by Dan Olsen introduces a product-market fit pyramid that enlists the six underlying stages to achieve it.
The product-market fit framework is illustrated below that enlist the stages to help find product-market fit.
1. Identify The Target Customers
Whom are you selling to?
A clear understanding of your target customers and their specific needs.
The people who will ultimately use your product define your target audience.
2. Identify Underserved Customer Needs
What problems do your customers face?
Identifying the problems of your customers that your product can solve.
3. Define the Value Proposition
What is your Unique Selling Point?
Value proposition will define how you will fare better than your competitor, Value proposition answers the question — what differentiates you from your competition, your Unique Selling Point (USP).
4. Define the MVP Feature Set
What are the core features that your product have?
MVP should support all the product’s must-have features.
You can also refer to the MosCow method for feature prioritization.
This method works to specify requirements based on:
- Must-have Features — essential for the MVP
- Should-have Features — essential for the MVP
- Could-have Features — can be saved for later
- Won’t-have Features — need to be dropped off
5. Creating an MVP Prototype
How will the UI/UX of the product look?
This part focuses on usability, findability, and discoverability — the three elements of a good UI/UX design.
- Usability: The product should be easy to use.
- Findability: It should be easy to locate and use the product features.
- Discoverability: It should be easy to identify and use new product features that the customers are using for the first time.
6. Test MVP
Testing iterations by gathering feedback from customers
Conduct surveys, post your product features on Public Trello Boards, tweet about it, send emails, post it across other social media handles — to see how your audience reacts to the product. Response to the MVPs is the answer to whether you have achieved the product-market fit or not.
The Journey
I tried to explain the concept of product market fit with three major steps:
1. What is Product-Market Fit.
2. Why do we need Product-Market Fit.
3. How to Achieve Product-Market Fit.
I hope that even though the journey has ups and downs it will be rewarding considering that your product will eventually hit that Product Market Fit point on the graph.
Thanks for reading.