8 min readMar 9, 2019

05/27 Update: I’ll be hosting a free online workshop covering this content. To get the invite, download my e-book here: http://www.lindsayt.com/product-market-fit-ebook

Product Market Fit Has Jumped the Shark

And other “Silicon Valley” proverbs we need to start, stop and continue.

If you’ve been following along with me then you know that I find the “90% startup failure rate” the most annoying statistic ever.

Are people really that bad at solving problems? Have we become that complacent with mediocrity?

After all, every reason startups fail can be traced back to the same crack in the foundation: Not knowing something crucial about your customer. We get so excited by our own ideas that we jump past doing deep customer discovery and validation. We miss important details that leave us guessing and struggling down the road.

If “market” is synonymous for the customer and we, as an industry, keep failing because we ignore our customers, then there’s something fundamentally wrong with how our industry defines Product-Market Fit.

Product-Market Fit cannot be an inflection point. It’s not something we can wait to do later. The popular guidance our industry gives entrepreneurs is to (1) identify a problem, (2) stub out a solution, (3) develop a minimal viable product, and (4) look for product-market fit. [Read: This article which is built off of Blank & Dorf’s The Startup Owner’s Manual]

Stop it with this advice.

We do not want to launch products and then try to find customers. That leaves way too many assumptions unproven. The #1 reason startups say they fail is because they launch to no market need.

Why is there no market?

Because you built a product without much consideration for an exact customer segment you could serve. If we treat PMF as a single inflection point, we open ourselves to launching to no market need.

We need to replace PMF with “fits” that can be achieved at every stage of startup development and, importantly, from the very beginning of an idea’s inception.

New Benchmarks

Below I present to you 7 new benchmarks in the evolution from an entrepreneur’s original spark thru the development of their actual product design, multiple releases, then launching and, finally, scaling.

From my presentation at Chloe Capital Investor Forum

Finding a Problem that Secures Your Footing

Founder/Problem Fit

The #3 reason startups say they fail is that they didn’t have the right team. “Not the Right Team” just means the founders or the people they hired were not willing to do anything to solve the customers’ problems.

From the very beginning, we need to push entrepreneurs to stick with the problem they want to solve. In forcing them to explore the problem from other peoples’ perspectives, looking for something truly significant to solve, they’ll also struggle. That struggle will test whether they have Founder/Problem Fit.

Some of the things we’re looking for:

Why is this the team to solve this problem?
Team background and history in this space
Evidence of grit and commitment
Rolodex in the industry, advisors willing to make important connections

Right team, right time, right skills, passion, commitment, connections. Check them all.

Problem/Value Fit

We cannot allow entrepreneurs to jump to a solution if they cannot convey a clear, compelling problem statement. If they don’t have it they haven’t done the requisite work to ensure there’s a problem or opportunity worth solving.

We also can no longer accept “some version of everybody” as the early segment they target first. Before embarking on a prototype, they must have connected with a very, very specific early segment.

Is this a problem worth solving?
Is it a vitamin or painkiller?
Are there customers willing to commit up front, either money or time, at a chance to solve this problem.

Notice that getting Founder/Problem & Problem/Value fit does not yet include details of the solution. Entrepreneurs need a problem where people get really, really excited just at the thought that you could make it go away.

Not having these two fits is how the typical startup journey fails from the get-go — we experience a problem, jump to a solution and validate our solution idea, selectively listening to only the feedback we want to hear. Then, we think we have a business!

A problem can only be a business if you’re obsessed with it and there are early customers that will pay you to solve it.

Developing a Solution Customers Will Use

The new stages when you’re solution finding reflect multiple iterations of both product and marketing. It’s not so simple to go from building an MVP to finding product-market fit. Entrepreneurs should not have to burn holes in their pockets, investing a lot up front to figure out if their solution is on target.

By going from value to prototype, prototype to pilot, and then, pilot to the product, we’re derisking our time & money investments at each stage. We want to find out what our early customers respond to and build on that.

Value/Prototype

You know that there is value in solving this problem. You have people that are excited at the very idea that you could solve this problem. Now you need to sketch a solution and answer the question:

Will customers pay us to solve this problem this way?

Notice that I didn’t say “build” a solution. This is a prototype. You can sketch it out, mimic it manually and use existing technologies. If you have to pay someone to develop the first version, you’re doing it wrong.

Prototype/Pilot

Okay, you have an approach to solving the problem that is engaging to your very early customers and testers. Now, let’s build on this approach. Identify which parts of your approach you can automate using existing technologies and which parts may require an investment in software development.

Be modest in selecting the features to invest in developing. Gather early customers from prototype testing and recruit some more from your niche audience. Put together a pilot to see:

Is the language I’m using to recruit existing and new customers to pilot my product compelling?
Am I able to locate and engage new customers through basic, low/no cost marketing?
Can customers derive value with less of me involved?
What are these pilot customers willing to pay for?
What other features do they need before they pay more for this product/service?

At this stage, you most likely are still onboarding most new customers with some amount of manual work. You’ll take phone calls to help them set up an account. You’ll invite people individually through Facebook messenger. Each of these interactions is an opportunity for you to practice your messaging and learn what your customers value.

Pilot/Product

Now that you’re well into building out your solution, iterating on customers’ feedback, adding new features as you validate their value, you’re slowly removing yourself from the process of new user onboarding and general user engagement.

You’ll achieve Pilot/Product fit when you can start to measure your key metrics for use. The most important key metric is “Are people using my product?”

Can new customers sign up, create an account and start using the product without direct support?
Is our product encouraging certain behaviors and meeting initial key metrics?
Are customers paying for our product? Can we start to model financial projections around growth without substantial guessing?

As we move through Value/Prototype, Prototype/Pilot and Pilot/Product, we’re doing mini-launches to small groups of customers. The features are bare bones at the beginning. We’re involving customers in the design of our product. We should be charging for the value we’re delivering even though the product isn’t fully grown.

In each stage we’re doing the following:

Increasing the feature set
Increasing the size of the audience
Learning & Iterating on both Product & Marketing
Setting up a basic marketing structure
Removing manual assistance from the team
Increasing the ability of customers to self-service

Involve actual customers in every step of product design and development to keep your business value & customer needs aligned.

Growing & Scaling Your Business

If you met all the previous fits, growing & scaling should be straightforward. But I know that a lot of entrepreneurs will gloss over product development because they truly believe, “If I build it, they will come.”

We want to believe that if we build something so amazing — and of course what we’re building is so amazing — people will naturally love it. All of the major media outlets will write about us and every user will be an evangelist. And, even if not, we have the grit to execute. This will be no big deal.

The whole idea that PMF could be an inflection point sets people up to build first then market later. First-to-market and (the false) belief in Steve Jobs telepathic ability to innovate let us forego putting early versions of our product in front of customers, missing important details.

In actuality, our ego is scared to put the unrefined versions of our product out there. We’re scared for the negative feedback so we build a full product. Yet,

No product is fully built if there are no customers actively using it.

Product/Launch*

Now, in the previous stages you should have been doing releases with mini versions of your product. When I’m talking about Launch* at this phase, I’m talking about launching BIG.

When you went from Pilot to Product, you refined the features and your business offering until you had evidence behind your key metrics; the most important being “Do people use your product?”

If people are deriving value from your product without much of your involvement, then you should start to see more evidence of referrals and organic signups. Other evidence that you have Product/Launch fit:

Narrowed your distribution channels to one or two
Confident your marketing language resonates
Have evidence that your marketing tactics are working
Growth is happening

Launch*/Scale

For the final fit, we’re asking: Is this product ready for significant marketing and sales investment? Here, we are ruthlessly focused on the distribution channel that will take us from 10K users to 100K users. You have a repeatable process for acquiring customers. You may be testing new ads but you have ads that are working.

Some of the benchmarks include:

Decreasing Customer Acquisition Cost (CAC)
Solid relationships with strategic partners and thought leaders
Expanded features for an expanded market

Growth & Scale are difficult and time intensive. If you did everything else correctly, these last two stages should be more straightforward

In other words: If you feel like you’re at growth and scale but are struggling and burning through cash, you need to back up. Go through my previous fits to be sure you’ve uncovered everything to know about your customer.