Product-market fit: The most crucial thing you must have nailed out of the gate!
If you’re about to launch a new product you’ve probably heard the argument for releasing a product quickly and then optimizing it later. Of course, changes can be made based on how your customers interact with and utilize the product and feedback and issue reports. But what aspects of your product must have been perfected by the time it is released?
Some things must be done right away, while others can be dealt with later. Of course, determining which feature set is most important is a process.
Let us begin by shortly discussing what you should and should not do before launching your product.
Make it simple for people to comprehend the product and give them a compelling incentive to use it.
Ensure that you never violate user confidence or privacy, lose user data, make the user feel silly, or make the user feel as though he is wasting his time due to your poor performance, poorly designed forms, or low uptime.
I also believe that you should be honest about the price. Even if you do not implement payment, it should be evident to users whether you intend to charge them in the future.
Not only does failing to do so risk a backlash later… but offering something away is not the same as demonstrating that people are willing to pay for it.
However, if there is only one thing you must do before launching a product, it is to ensure the product-market fit.
You can make your product appear fantastic, but you’ve wasted your time if you create something that no one wants.
Companies’ most serious issue is that they do not have product-market fit even though they believe they have.
So, why is product-market fit so critical?
The answer is simple: your team cannot afford to focus on other critical strategic objectives such as growth before developing a product that you validate enough people are prepared to pay for. Those attempts may be unproductive if you haven’t first determined that your product has a large enough market to maintain itself and create a profit.
Product-market fit refers to a situation in which a company’s target customers buy, use, and tell others about the company’s product in sufficient numbers to sustain the product’s growth and profitability.
Is it measurable?
No single data set can notify a company when it has achieved product-market fit. However, several indicators indicate that your company’s offering is on the right track.
Whatever methodology your team employs to measure success, you should incorporate a mix of qualitative and quantitative measurements. As an example:
- Rate of churn
- NPS score
- Rate of growth
- Share of the market
- Word-of-mouth (If your consumers tell others about your product, they effectively become sales agents for your products.)
- Calls from the media or industry analysts become increasingly often, and coverage of your product and company expands.
Sean Ellis was the first to create a qualitative metric applied to various business operations. He was involved in the early growth and scaling of household names like Dropbox, LogMeIn, and Eventbrite. In his attempt to understand PMF, he used his customer development survey to assess hundreds of firms, asking users:
How would you feel if you couldn’t utilize the product anymore?
- Very disappointed;
- Somewhat disappointed or
- Not disappointed at all (it really isn’t that useful).
He then calculated what percentage of all users said they were “very unhappy,” as these are the people who recognize the product’s value and the firm. They are, in other words, the clients with whom you have achieved product-market fit.
When 40% of your target audience says they would be very sad if they couldn’t use your product anymore, you’ve hit PMF.
The survey is now an approved method of measuring PMF. Slack, for example, tested it on 731 members and discovered that they had hit the honey pot. Moreover, 51 percent of their users said they would be highly disappointed if they couldn’t utilize the platform anymore.
Startups should prioritize product-market fit above all other goals because those who find it has a much better chance of success.
Do whatever it takes to achieve product-market fit. Make any required changes to establish a product-market fit, even if it involves rewriting your product or entering a new market.
Experiment regularly based on input from your audience. If your data reveals that your concept must be tweaked, do so, and be prepared to shift if required.
Originally published at https://solveo.co.