Art of Marketing to create Product-Market Fit
Product-Market Fit (PMF) is one of the most frequently used terms in the startup world. Marc Andreessen defined it as “being in a good market with a product that can satisfy that market.”
Sean Ellis suggested his 40% PMF Benchmark, which states that if more than 40% of users answer that they would be “very disappointed” without the product, it has a good chance of having PMF.
According to a CB Insights analysis, the most cited reason why startups fail is the lack of market need for their product.
Dropbox that DERIVED customers’ positive response
Ironically, the initial customer response to Dropbox, where Ellis worked as a marketer, was not positive. Drew Houston identified the issue of “seamless file synchronization” from his personal frustration over repeatedly leaving his USB drive behind. He believed confidently that the issue was a problem that most people did not know they had. Once users experienced Dropbox, they would realize they couldn’t imagine life without it.
However, in the focus group interviews conducted before developing the product, people did not understand what Dropbox was. Investors also gave negative feedback, saying that there was little demand, the market was already saturated, and there was no successful company doing what Dropbox was trying to do.
Drew was still confident in the need for “seamless” file synchronization and made a demo video to present the concept. He posted the video on Digg, and the result was a legendary hot response: over 70,000 beta list sign-ups overnight.
VALIDATING market vs. PERSUADING market
In his article “How to Get Startup Ideas,” Paul Graham offers valuable advice: “The way to get startup ideas is not to try to think of startup ideas. It is to look for problems — preferably problems you have yourself.” Graham emphasizes that working on a problem we personally experience ensures its existence.
Steve Job’s famous quote, “It is really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them” further emphasizes the importance of an entrepreneur’s insight and belief in their business idea.
It is more strategic to use customer survey to get different perspectives and market information, rather than directly asking customers if they need a product. Moreover, it is crucial to invest considerable effort in finding effective ways to explain and present the value of our product to achieve our business goals in customer surveys, sales, investment pitches, media meetings, and more.
Marketing Communication to DERIVE product-market fit
Marketers are the people who communicate the product to customers. Successful marketing is not simply about selling as much as possible. It is about achieving the maximum business potential of a product. While engineers have a responsibility to achieve the technological potential of a product, marketers have a responsibility to achieve its business potential.
So, how can we communicate ‘effectively’ to achieve our potential?
We should start by studying and thinking about what kinds of benefits the product’s features can make in the customers’ lifestyle. Once we understand the benefits, we can communicate them to customers in a way that resonates with them.
CASE 1. Reflexo
I will explain with a case of one of our project startups — Reflexo, a calf-stretching machine.
Reflexo is a device made by a bioengineering major student. He made Reflexo to help his grandpa who could not stretch for himself after a long hospitalization. Calf muscles are called ‘our second heart’ because they pump blood back to the heart. It is advised to stretch them daily.
Would it be enough if Reflexo is sold as the stretching machine for sick or weak people as it was originally invented?
Our team investigated whether people are aware of the importance of calf muscle stretching, whether there are many people who regularly stretch them, whether there are devices to support this stretching, in what purposes people are using these devices, etc.
On Amazon, we found that various kinds of calf-stretching machines were selling. Women on high heels, long-hour drivers, all-day-standing people were some examples of buyers.
Based on the above research, we presented Reflexo on our platform as catering to various target customers and requested feedback from our MarketingCrew app users.
As a result, MarketingCrews considered Reflexo to be a device capable of fulfilling all the mentioned needs. In particular, many of them suggested that its most promising target audience would be office workers and women who wear high heels. This validation of Reflexo’s original idea, aimed at assisting individuals with weakness, revealed a much larger market potential and garnered high favorability among consumers. These findings were obtained through research-based strategic communication.
* Source: MarketingCrew Project 26
CASE 2. S.Chain
Another project startup case is S.Chain, which is an IoT security alert and GPS device. The development of S.Chain was initially initiated in response to a request from a premium motorcycle dealer.a IoT security alert & GPS device.
Considering that China, India, Indonesia, and Vietnam have a huge number of motorcycle riders, it will be good enough to target riders in these countries. However, can we say that this is enough to achieve S.Chain’s maximum potential?
Our team conducted extensive research and discovered a wide range of security alert devices available in the market, including innovative offerings from creative startups. By carefully analyzing these products and considering the potential applications of S.Chain, we positioned it as a versatile device suitable for the below various situations. And we translated the feature of ‘security alert’ offered by S.Chain into a value proposition of ‘securing peace of mind.’
Interestingly, each country responded differently to the various uses of S.Chain, and some users even proposed additional potential target consumers and use cases.
For example, the S.Chain team initially didn’t consider Singapore as a promising market due to its reputation as one of the safest countries. However, MarketingCrews from Singapore pointed out that precisely because of this safety, individuals from Singapore feel more anxious and concerned when traveling to other countries for business trips or vacations. On the other hand, in Indonesia, where motorcycles are the primary mode of transportation, there was a strong demand for S.Chain’s GPS function. This is because motorcycle parking lots are often located outside buildings, making it challenging for riders to locate their motorcycles in large parking areas.
Here are some examples of new target users and use cases suggested by our MarketingCrews:
“As Singaporeans are willing to give more to dote on their children, the things they buy could be very expensive like branded bags and wallets, even for children as young as 6 when they start school. Since parents are willing to pay more for their children, it will be wise to target parents.” (Singapore)
“Kindergarten or schools can use this to keep the student from going into unwanted places.” (Malaysia)
“When I was an English teacher, a lot of my Korean & Japanese students complained about pickpockets taking away their phones/bags somewhere while walking on the street or drinking at a local bar. These students come from countries where pickpockets are not common so this is so frustrating for them. I think they can be good target customers.” (Philippines)
*Source: MarketingCrew Project 31
A product becomes a complete business item when the marketing to explain and persuade its value is added on it.
Quite often, you can move the market not by changing the product but by changing your communication.
Consumers’ purchase, investors’ interest, media publicity, word of mouth are triggered by marketing communication that was well prepared from a deep study of product/market/customers’ lifestyle.
Rather than being validated through customers’ feedback, how about using the Art of Marketing to CREATE product-market fit?
This article was originally published on Platum, a media with the highest readership in Korea’s startup space.
