5 Tips to guide you through the Product-Market Fit process
Product-Market fit (PMF) can be loosely defined as a stage where your product has evolved to the point that a market segment finds it attractive, it solves a need that is present in the market and the customers are ready and willing to pay for it.
Without a doubt achieving PMF it’s one of the most important goals for a startup, yet it is also one of the least understood concepts. We asked some of our entrepreneurs to share their advice and insights into the PMF process.
- Sell all the way to PMF. Alon Arvatz, Co-Founder and CPO at Intsights, says: ” Push as hard as you can to sell your product. Yes, even in the early days, even when you feel that your product is not mature nor robust enough. Give everything you have to attain new customers. This approach would keep you highly engaged with your would-be customers, and you will generate meaningful feedback that will help lead your product and R&D in the right direction.”
- Focus on Being Focused. TJ (Tsion) Gonen, Co-Founder & CEO at Protego labs says: “ I understand that it is very tempting to think and to say that your product is a great fit for many different industries and many different use cases — so let’s go out and try to build an MVP that fits every use case, and try and sell it to all of these verticals. That is a recipe for disaster. As a startup your budget is limited. It is always better to have a much more narrow focus to start with and go really deep in that one vertical or use case that’s right for you. There are so many benefits to this approach, starting with a much more targeted sales pitch that uses very specific industry terms, plus a dramatically easier way to prioritize product features (“these guys don’t care about X”). Yes, I know, it is scary to ‘limit’ yourself, but experience shows that you have to let go of this fear and allow yourself and your teams to succeed in finding the product market fit for a vertical/use case and grow from there.”
- Finding Your PMF is Like a Maze. Yaron Ismah-Moshe, Co-founder and CPO at Exceed.ai, says: “Companies crawl toward it. The entire team has to work on it. Every employee should understand they’re hunting for PMF. It is an iterative process, where we explore, implement, evaluate, change and repeat until the company understands they have reached the end of the ‘maze’, where they have a product they know how to sell to an identified buyer, in a structured way for the right price.”
- Long Term Strategy. Moshe Vaknin, CO-founder & CEO at Youappi: “One of the major missions is to match the product to the appropriate vertical that we can predict will be valid for at last three years. The way to identify your appropriate market today is relatively easy to understand and execute, but the main challenge is to predict ahead. This is a difficult task that requires a deep knowledge of the ecosystem you are in, so the more we shorten the ‘trial and error’ phase, the better long-term strategy for your product.”
- Open Your Listening Ears and Search for Tell Signs. Dan Sahar, VP Product, Upstream Security: “When you hear your potential customer saying, ‘What you’re building is really interesting,’ that usually means you’re pretty far off. When they say ‘we NEED this product yesterday’ that is obviously a great sign but not enough. Probably one of the best signs is if you have a customer tell you that they developed a product just like what you’re building — at first you may be discouraged to hear this, but what you should be hearing is that a customer tells you they were willing to spend resources and efforts on solving a problem that was bugging them enough to do so. That’s rare. Usually, very few companies can build such a thing in a way that will outshine the similar product that you’re building, and the likelihood that their specific product will be able to satisfy the entire market is also quite low. At the very least, this tells you that you’re on the right path and you should start searching for other similar companies that probably have the same problem, but can’t develop it on their own. In such a situation your hit rate is probably going to increase.”
Last but not least …
How do we, at Glilot, work with our portfolio companies on their PMF? Our Value Creation team is constantly strengthening the engagement with C-level execs worldwide. This network of industry leaders enables us to expose the solutions created by our portfolio companies at an early stage to the market and receive valuable and genuine feedback. This ongoing feedback is crucial for shaping our companies’ PMF strategies, thus enabling us to help turn them into a winning organization.