Value Equation for Product Market Fit

We all want to deliver value to users and customers. But what is the value? Designing service/product without lack of this understanding will end up service/product without “Product Market Fit” — PMF. Service Diorama helps us explore PMF.

The only thing that matters is getting to product/market fit. — Marc Andreessen

Desire minus Friction equal Value” is simple equation to understand perceived value. Below illustrates examples.

Value Equation for Product Market Fit Used in Service Diorama

Let’s imagine we are working on an online market place where people can buy and sell things.

First we need to understand what buyers and sellers want — Desires. We also need to understand what prevent them from doing what they want, if they have not done yet. What are constrains — Frictions. It is also important that we know what we do not know.

Unknown is opportunities to be discovered. The more unknown you discovered, the better chance you have more opportunities. “Unknown” is also a system to make sure we do not judge with fact, not assumption.

Service Diorama employs color coding as visual language to understand system. You can use the same color coding in the value equation such as orange = sellers, green = buyers and blue = service providers.

Example of Using Color Code with Service Diorama Worksheet (Value Map)

Colors as visual language help us understand how much we know about stakeholders. Absence of color indicate absence of our knowledge to the color group. If we do not have many oranges in “Desire” and “Friction” boxes, we need to have many oranges in “Unknown” box.

In the example above, we do not have blue in upper boxes that represent know “Desire” and “Friction”. It means we should have more blue in lower box that represents “Unknown”.

The value map is very useful when running Service Diorama session. Below slide is presentation when I run a workshop in Amsterdam with AmsterdamUX. The value map help us think what we know and what we don’t know. It incentivises and encourages discovery of unknown.

Because Service Diorama and Value Map share the same color code as visual language, it is easy to relate service ecosystem and value.

Workshop slide at AmsterdamUX

You you enjoy playing Service Diorama with Value Map. Service Diorama and Value Map are free to download from Service Diorama website. Service Diorama is also community. Please join us and share best practices in the Slack group. You can join the community from here.