Sometimes experience is the best teacher. Liam Smith didn’t truly understand the product market fit until he created a product that flopped, followed by one that succeeded. The difference? With the first product, he started with an idea. With the second product, he solved a specific problem that a market had. Liam shared the steps he took to go from problem to a product that fit.
When you develop a new product, product market fit is the first significant milestone that matters. It’s fairly easy to know what product market fit feels like, but it’s a bit more difficult to know how to get there. In this video, Ash Maurya describes a systematic way of finding product market fit.
If you want to know more about productmarket fit and are a visual learner, you may find a visual guide to product market fit helpful. Neville Medhora supplements frequently cited quotes about product market fit with clear, simple drawings that illustrate the key concepts.
The Illusion of Product-Market Fit for SaaS Companies
It would seem from the articles above that identifying when you have found product-market fit is relatively straight-forward. However, Brad Feld believes otherwise and references 4 myths regarding product-market fit first written by Ben Horowitz. These include that it’s always a discrete, big-bang event and once it’s achieved it can’t be lost. He goes on to give examples how companies can get tripped up no matter if they have $10k MRR (monthly recurring revenue) or $1m MRR.
Finding Product-Market Fit: When to Stand Firm & When to Pivot
The team at Chargify describe how you can use user feedback and data to identify if you have found product-market fit. Questions to ascertain how disappointed a customer would be if the product disappeared can be asked in surveys for instance. And calculating a Net Promoter Score (NPS) can give you immediate insight into how satisfied your customers are and how this changes over time. On the data side, analyzing customer retention is key.
The term Product-Market fit has been taken straight out of the startup world but is equally significant for established companies. Marc Andreesen was one of the first to talk about it, including in a popular blog post written in 2007. In it, he argues that it’s not team or product that is most important to a startup’s success, but the market. That a market ‘pulls product out of a startup’ — meaning a wanting market will immediately settle for the first viable solution to a need. Product-market fit is defined by Andreesen as “being in a good market with a product that can satisfy that market.”