6 Ways to Measure Product-Market Fit For SaaS Startups

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Thinking to launch a new product or service?

Trying to explore the market?

Making sure that you do have a solid customer base?

Okay, so…

The first thing that might have come to your mind is that ‘Does the market you are targeting really needs that product/ service?

Right?

I bet this must be the case. Why?

You want to be sure about where you are heading to. You want to make sure that the demand is really there!

You know what this concern is really called?

The marketing term used for this concern or confusion is called the ‘Product/Market Fit’.

This has become a very common practice by all the tech entrepreneurs before entering into any SaaS business.

Product/Market fit seems to give you a perfect know-how of how your product will do in a certain market. To some extent, yes, this is true.

But Remember:

Product/Market fit is a continuous process and you will keep figuring out new facts about this fit even 5 years after your launch.

Don’t think that you will get the whole map at the first analysis and then you can run by the same facts for next 50 years…

It might fluctuate every month, my fellow!

So keep your Product/ Market Fit and yourself updated. AT ALL TIMES!

Now:

Let’s move on to the actual question of what is a Product/Market Fit and how it is measured.

What exactly the Product/ Market Fit is?

Product Market Fit is to have a product which perfectly serves the market you are dealing in. To be more elaborative, it is when your product and the market equally compliment each other and make a perfect combination of demand and supply.

Furthermore, to check if you have a good product/market fit or not, you have a variety of measures to go on with it and perform a deep down research before launching any product or service among your target audience.

But before moving on to the measures, let me discuss some of the fallacies you may have heard about the product/ market fit in your industry.

As I mentioned above, some people think that it is a full and final test to see if your product will do well or not. But it is nothing like that.

Here you go with 3 Myths about the Product/Market Fit:

Fallacy # 1: Product/market fit is an individual measure

So the first fallacy declares that this test of product/market is a discrete body which will tell you the whole future of your product and that you should fully rely on this test.

While it is certainly not the case, there are hundreds of more measures which you have to take before launching into the market.

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Fallacy # 2: If you achieved product/ market fit, you can never go wrong

Now, we have some people around us who think that once we are done with this measure and it shows that the, market we are targeting really needs are product than nothing can go wrong, and our product will do good in any case.

No, my friend this is not the case. Your business is as uncertain as your life and anything can happen at any time.

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So even if you have come up with a perfect fit you should still anticipate any kind of changes in it for later.

Check out this guide: Don’t Be A Fool In Love: Guide To Find Your Winning Tech Idea

Fallacy # 3: If you have achieved product/ market fit, no competition can affect you

Competition will always remain there no matter what. In fact there are chance that you will have an increased competition with the passing time.

Even a market belonging to one niche can have its branches in many different directions.

So if you think that you will only face the competition what you have thought about, then you are mistaken because competition can come from a corner which you haven’t ever thought of.

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Now, don’t get disappointed..

The product/market fit is still very useful. It’s not some waste of time or anything but it is not something that usually people think of.

SaaS companies or many other startup owners think that this measure will give them all the guarantees they want.

So this is what I am clearing up, in fact no measure does ever guarantee you for any future profitability. When you have entered into a business, you have got to play with uncertainty.

Now, let’s move on to the ways in which you can measure the Product/Market Fit.

Here are 6 Ways to Measure Product-Market Fit For SaaS Startups

1. Build a Target Market List:

First of all, you need to build a list of your target audience. This is a list of people from whom you really want to take the feedback from. You want to know if they are really in need of your product or not.

A proper list would be built based on a categorization that is done over demographics. You have to decide the demographics of your audience. The options might include:

• Age
• Gender
• Income
• Location
• Lifestyle

Basically you will have to define your target market first to build the list. Checkout this amazing post on How to define your Target Market.

This procedure will give you a proper target audience to focus at and carry your further activities out according to that particular market.

2. Understand the Need of Your Target Market:

Now the next tricky part is understanding the real need of your target market.

First, after you have defined a clear-cut audience. For instance their age and their lifestyle, then you will analyse their basic pain point.

This is what would you basically provide them, you will need to see what is bothering them and what they exactly need from you.

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Check out this post by Jayson DeMers: Understanding the need of your target audience.

3. Build a Valuable and Useful Survey:

For knowing your market in a better way, you will be creating a survey in which you will ask your target market about their needs and how they would want your product to be.

Now:

Furthermore, you would want some very specific to be answered. In order to create a valuable survey you will have some direct and to-the-point questions so that you will get some good results.

Now, there must be hundreds of queries running into your mind about what to ask, how to ask and whom exactly to ask. Let me solve all of them step by step.

i). Which questions should you ask?

You will find hundreds of questions to ask from your users. Now you have to have the art of asking the relevant questions.

You will find hundreds of questions to ask from your users. Now you have to have the art of asking the relevant questions.

You have to dig out the importance of your product in the eyes of the customers, through your questions.

Check out this question below, this is one example on how you can examine the need of a particular product in the life of your customers.

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Furthermore, here are some very useful questions for validating your product and these will help you dig out the demand of your customers.

ii). How many questions should you ask?

It is always better to take an optimal number of questions from people so that you can come up with some solid conclusion.

But at the time, your survey shouldn’t be too long that it becomes again for the person who is filling it.

Normal questions with a quality which will provide you with relevant and valuable insights about the launch you are thinking to do.

Some quick tips for designing a survey:

• Keep it short
• Ask relevant questions
• Use easy to understand phrases
• Add a few open ended questions to dig out some detail

For a more detailed overview, here you go with some: Tips and tricks on how to design your survey.

Also, check out this amazing app, Survey. io to create extremely useful and easy to use surveys.

4. Analyzing Your Responses:

Now is the time to analyze the results. Carry out the analysis well and come up with some solid and valuable conclusions.

We can analyse these surveys with many different online tools.

This times have changed and now you can find Survey Builders online which will also help you to analyze and interpret your surveys in a much easier way than before.

One of the most common and most used online survey builder is Google Forms. It also makes the analysis much more automated which is easy and quick.

But:

Even if you do not want to completely automate your survey, you can keep a check on a few things to get an analysis which closer to reality. Here are few tips:

• Segments your survey
• Do not choose any types of questions
• Keep your form simple to interpret
• Keep the answers definite even if there are open-ended questions

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BONUS: For more details, check out this guide on how to design and analyze surveys on Zapier By Christopher Peters.

5. Create a Sample Product:

Now:

After you have understood your target market and their needs. Now you know what are you offering and to whom you are offering.

The next best strategy is to create a prototype for your product so that it can be tested and observed before it hits the real market.

This will brush up your research and give you a much more clear idea of what you are planning to do.

This will enable you to do all the tweaking and editing in your product/ service.

Also, after getting done with creating a prototype, you will get it tested by the professionals or the experts of that field.

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Check this post for more details about how to design your prototype.

6. Improve on Your Product Value:

Once you are done with making the prototype and testing it in the relevant market, now you know what your product lacks.

Now it is the time of adding value to your product. You must be thinking on how you can do that.. Right?

There are millions of ways through which you can add value to your product or service. In fact SaaS based products are very flexible and can be tweaked much easily than the traditional products.

Read more: SaaS needs Continuous Updates in its Product/market fit!

A few ways of adding value might include:

• Finding out further pain points
• Touching a new segment
• Altering the product design a bit
• Adding a new feature

Check below, how an article over e-commerce industry explains on how you can add value to your product in different ways.

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Conclusion:

After this detailed analysis on what your market needs and how you should design your product, you will have ample data to measure your product market fit.

All these strategies give you a chance to see if you are entering into the right market or not.

Remember even after all of this hassle you feel that you are not coming up with a perfect product/ market fit, you have the complete liberty to back off.

Trust me, it’s the perfect time to do that rather than investing and then wasting your money, time and effort.

Other than defining your target market and taking out a survey activity, if you see that you are going into the right direction, then you should start working from that very place. And what would you work one?

Credibility… Yes, building your credibility!

Because you have seen that you are offering a right thing and the audience will really buy it also, then start putting in more effort and make the users believe that your are offering them a right thing for sure.

However,

Never think that once you are done with this exercise you will not have to look back and see if you are still fitting into your market or not

No, this is not the case, my mate. It definitely is a continuous process and you will have to keep finding if the product is still providing value or not.

It is possible that after the five years of operation, you conduct a product/market fit and find out that your product has become obsolete for the market you are targeting on.

In fact SaaS companies are more prone to changes and innovations aso there is a high chance that the product demand changes quickly in this industry.

So, keep measuring your position and keep updating!

Want to read more? Check this comprehensive post: 8 Practical Steps to Measure Product/Market Fit for Your SaaS Startup

Please check out my blog: HammadAkbar.com