The Product Market-Fit Pyramid

One of the most beautifully striking diagrams I’ve seen in the past months was the Product Market-Fit Pyramid by Dan Olsen:

This diagram presents in a very elegant way the necessary layers to achieve Product-Market Fit (PMF).

Achieving PMF means we have built a product that creates significant customer value. This means that our product meets real customer needs and does so in a way that is better than the alternatives. (Or at least, that’s one definition.)

Achieving PMF should be our main goal when building a new product. After all, optimisation and scaling is irrelevant if there’s no people wanting what we build.

As highlighted by the labels on the image, the top 3 layers represent the product we are building, while the bottom 2 layers represent the market.

From this we can lay some interesting points:

We can be excellent executers, but that has no value if we don’t match the market needs

More often than not, we see companies building products without first understanding their user’s problems, their needs, and what solutions could benefit them.

These companies can be excellent executers but they are blindly building something in the hopes that their big bet — the product — is 100% right from the start.

Being excellent at delivering the product doesn’t have any value if we’re not delivering the right solution to the right problem.

To understand the market needs, we first need to find our target customer

This is less obvious than it seems: many times a product starts being built because we know there’s a problem in the market, and which is true. The issue is that we actually don’t know who exactly will be using it.

For example, we know that some car drivers need a tool to guide them to their destination, but we don’t know which car driver segment impatiently wants this solution.

Without knowing this, it’s much harder to adequately match (and market) the target’s needs.

First and above all we need to find our target customer. And I love how this is presented explicitly on the PMF pyramid with its first layer.

Teams that start building without finding their target customer (or at least hypothesise it) will have a harder job ahead.

The PMF Pyramid makes layer priorities explicit

Overall, the PMF pyramid makes it clear that, before building the product, we need to determine the target customer and identify underserved customer needs. Building a product without that defined is a waste of resources.

Similarly, on the product side, before defining the UX we need to first define its value proposition (according to our market needs).

More often than not, teams build the product first to only then search for their target customer and, in some cases, actually understand their underserved needs.
Building a product this way makes it much more difficult to reach PMF, and leads to higher inefficiencies and costs.

Before we start building the product, it’s important to look at the PMF Pyramid and ensure we have those layers figured out.

I’m Daniel, Product Manager at Whitesmith. Paper Planes is a place where I reflect about my experiences and learnings on the craft of Product Management, and where I share them with my team and community under the form of short blog posts.

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