Product/Market Fit = 1 Function Done Well
Ever wondered whether your product has market fit? Same here.
I’ve searched everywhere for an answer to this question. At first I thought a Quora thread on the topic might help. Nope — it culminated in a “you’ll know it when you have it” moment. Next I turned to the gurus. Still no luck:
- “If you have to ask whether you have product market fit, the answer is simple: you don’t.” — Eric Ries
- “Make things people want.” — Paul Graham
- “The only thing that matters is getting to product/market fit.” — Marc Andreessen
- “One metric for Product/Market Fit is if at least 40% percent of surveyed customers (Users) indicate that they would be “very disappointed” if they no longer have access to a particular product or service.” — Sean Ellis
You see my point. None of these statements provided a tangible framework to help guide us towards finding our product market fit. I knew we needed something more, and last Friday we found it.
Product market fit equates to one function done really well.
That one function should align directly with your core value proposition. In fact, every other product function is secondary to this goal and should only exist to make you better at delivering on your core value proposition.
Now ask yourself: how fast does your product deliver on its core value proposition? The best products do it immediately.
See for Yourself
Google
Core value proposition: a search engine that “understands exactly what you mean and gives you back exactly what you want.”
Core function: a search bar and instant results.
Uber
Core value proposition: transportation in minutes.
Core function: one button that lets you ‘Set Pickup Location’.
Facebook
Core value proposition: connect with friends and the world around you.
Core function: find/add friends.
Snapchat
Core value proposition: Snap a photo or a video, add a caption, and send it to a friend.
Core function: take a photo/video.
All of the products above take the user to the core function of their service — the core problem they promise to solve — immediately.
Product market fit is when you have a core feature that delivers on your value proposition so well, that you can increase value simply by improving that core feature.
Think about the billions of dollars Google has spent on its search product, yet the function that users interact with (the search bar) has barely changed.
It is, however, easy to lose product market fit. For example, the transition from Elance to Upwork has made it much harder to hire a freelancer.
Upwork
Core value proposition: find freelancers to tackle any job, any size, any time.
Core function: … where would you click?
Marketing Considerations
Marketers have the potential to optimise you both towards and away from product market fit. This is because marketers modify your value proposition, through things like A/B testing ad copy, in pursuit of higher conversions.
Underpinning this pursuit towards increased conversions may be a change in the underlying motivation behind why someone signed up. Ultimately, the people who sign up receive a different product experience (functionality) to what they were originally sold.
It is therefore imperative that what marketing is actually selling to the customer, is consistent with what the product actually does. This means you need to be tight around your acquisition messaging, ad-copy and imagery.
The marketers definition of product market fit is “the landing page that converts the highest”.
Still unclear? Imagine this scenario…
Marketing runs an advert that promotes your products in such as way that feature y is now being sold as feature x. Customers sign up to get feature x and your product ultimately provides feature y. Subsequently, activation is low and you interpret this as not having product market fit. The truth is, your product might be really good at delivering feature y, but marketing has brought you customers that want feature x.
What do you do? Well, marketing needs to find you customers who want feature y, or your product needs to get better at delivering on feature x. You might even want to consider pivoting towards focussing on feature x if demand for this feature seems stronger.
Key takeaway: product market fit must be evaluated against the initial reason a user chose to sign up. AKA did your product do what the landing page said it would? If so, do users use that feature the moment they sign up (demonstrating activation).
Marketing will inevitably optimise for a high converting promise (embedded in your landing page). Your product must deliver on that promise.
We’re currently applying this theory to our work here at Ausmed. We’ve built a framework to track and drive product market fit. I plan to follow up on this post with a second article showing you how we go.
Final thoughts…
When you’re seeking product market fit, identify the core function that represents your value proposition. Focus on making that as straightforward and as easy to use as possible. Do this incessantly until the majority of people who sign up to use your service to do X, are able to do X—and can do it well within 1–5 seconds.
NB: I toyed with the word interaction over function, but it seemed vaguer. One function, is easy to identify in your code. One interaction seemed like a step backwards towards the mystical side of this question.
This article was originally published on my personal blog.
