PSL Bootcamp Blog: Lesson 4 — The Lean Approach to Finding Product-Market Fit
Most people associate entrepreneurs with risk. Risking their money, career, or livelihood to pursue their passion and start a business. Lucinda Duncalfe, President and CEO of Monetate, has a different opinion on the subject. She believes that entrepreneurs are not risk takers, but risk managers. She stated real entrepreneurs can look risk in the eye unemotionally and mitigate it instead of fearing it.
Another method for avoiding risk according to Duncalfe is the Lean Startup methodology. The Lean Startup has risen in popularity and for good reason. The theory behind it emphasizes experimenting with as little resources as possible to find the right product-market fit instead of elaborate planning that may waste time and money in the long run.
Here are some principles for the Lean Approach to Finding Product-Market Fit:
1. Be Deliberate
Be extremely thoughtful and clear about what you’re doing and why you’re doing it. Identify your assumptions, key risks, and hypotheses and figure out what happens if those things actually occur. Measuring everything will also help. Continue homing in on the aspects of the product that are being responded to positively. Don’t spend money on Google AdWords because it seems like the thing to do; do it because it’s helping gain interest in your business and closing customers.
2. Do As Little As Possible
Don’t waste your time projecting revenue in 5 years and projecting a user base because it is impossible to predict. Avoid overbuilding a product and instead create a Minimum Viable Product and then go out and sell it. Wait to see what people react to at the bare minimum and build out the product from there.
3. Trust the Market
What happens if there is a core component of your product that the market doesn’t care about? Trash it. You have to trust the market and what aspects are being responsive to. Trust what aspects of the product customers are willing to pay for and pivot the product to fit those needs.
This method can be repeated over and over again to find product-market fit. The faster you test the product outside your office’s four walls, the faster you will find product-market fit. You won’t know what the market wants until it’s out there being tested on consumers. The end goal is to sell and then strategize. Build your company one customer at a time.
By: Rachel Zydyk