A How-To Guide to Product-Market Fit
Start with defining the market, not the product
When ideating new product ideas or potential strategic pivots, there are several ways to assess product-market fit. The approach often taken involves first defining the product and then assessing its market potential. The steps that are taken usually look something like this:
- Define the product hypothesis
- Identify the feature set
- Build the product
- Release the product
- Pray
There are several problems with this approach. In fact, it is ass backward. Start with the market, instead of the product, which provides a more logical sequence and accurate framework in defining a winning product strategy.
Here’s why.
What is Product-Market Fit?
The product-market fit concept was created by Andy Rachleff (CEO and co-founder of Wealthfront and co-founder of Benchmark Capital). The core of Rachleff’s idea for PMF was based on his analysis of the investing style of venture capitalist Sequoia founder Don Valentine.
In the words of Andy Rachleff:
“A value hypothesis is an attempt to articulate the key assumption that underlies why a customer is likely to…
