Why is Product/Market Fit So Freaking Hard?
Every startup founder has heard the famous mantras: Make Something People Want. A successful startup must achieve Product/Market Fit. These concepts sound so plainly logical and simple. Founders are generally not stupid people; who in their right mind would make something people didn’t want? Creating a product that doesn’t fit a market is obviously futile. Yet most startups fail, and according to our friends at CB Insights, most startups fail because they don’t achieve Product/Market Fit.
So why is Product/Market Fit so elusive?
I recently heard a great quote by famous VC Andy Rachleff that I think answers this question in one simple sentence. Andy says he asks every founder:
What do you uniquely offer, that people desperately want?
I highlighted the words “uniquely” and “desperately” because I think they hold the keys to our misunderstanding of Product/Market Fit’ complexity. Uniqueness is fairly measurable — an astute founder can do some deep market analysis, preferably based on direct personal experience, and craft a new solution that is very distinguishable from all other solutions on the market. The problem is: it’s virtually impossible to predict or handicap how desperately the target market will want to consume that future solution. Nobody can know for sure, in advance, how badly the “Want” in “Make Something People Want” will be — and it has to be a big Want. It turns out that generally, if only a small part of the market ultimately wants the product, or if the market’s Want is kinda ho-hum, the startup will fall into the Black Hole of “Meh.”
This is where most startups miss the Product/Market Fit mark on the low end. Their solution is “unique” — check — but the market’s Want is not a desperate Want, and isn’t enough to garner the requisite traction and growth.
(Desperation is hard to predict in either direction. While most startups underperform on market desperation, some amazing startups are upside surprises — reaching levels of market desperation that even the founders didn’t anticipate. See that famous interview with young Zuck, where he says he anticipates a day when thefacebook will be a robust college network, and not just for Harvard and a few other schools, or the initial Airbnb pitch deck, showing their rosy five-year revenue projections, which they vastly exceeded in their fifth year… even they didn’t realize how big it could get.)
Nobody’s a prophet, and predicting how desperate a market will be for a future product is really, really hard. For all the time and effort founders sink into making sure their paradigm-shifting product is unique, they need to spend equal effort somehow gauging how badly the market will want that product once it’s introduced. Unfortunately “Make Something People Want” isn’t enough — it’s “Make Something People Desperately Want” and that’s a much higher and more unpredictable bar.