Product market fit is about identifying a specific audience and then ensuring that your product meets their needs. In other words, it’s making sure you’re helping a specific audience make progress against that audience’s common problems. It’s obviously valuable to understand what you’re selling and who you’re targeting. But perhaps it’s even more important to know what you’re not selling and what audiences you should avoid.
What is product market fit?
Product market fit isn’t all about revenue. It’s about making sure you are getting users on your product and then letting them find value for themselves. If your product doesn’t help anyone make progress, it doesn’t matter how many users you have or how much money you make. It’s useless. Product market fit requires providing real value to users. Businesses shouldn’t focus on making money right away. They should instead focus on measuring user value and improving that value. Most companies also fail to use customer feedback to evaluate how their product or service is used and whether it’s meeting user needs or needs changes. Here’s a quick example: Building an app for my insurance business.
The importance of understanding your audience
If you are starting a business, understand this: You are not a software company. You are not a pharmaceutical company. You are not even a video game company. You are a product company. What I mean by this is that you can start selling anything that other companies have already created. This is easier said than done, as most people think there are two categories of businesses: tech companies and non-tech companies. The reality is that it’s more like 10 categories and dozens of subcategories. If you take a look at how people use their smartphones or what happened in the mobile-app space, you can see that there are basically dozens of different use cases. Take Alexa for example. It’s made to help people who want to control devices remotely.
How to find the right audience
Marketers have a handful of options to find the right audience: Figure out the size of the audience: Estimating the size of a specific group of customers is easier than you might think. You can use a mix of qualitative and quantitative research methods to determine the number of users within a given age group, income bracket, geographic region, or other audience “space.” A combination of both approaches will be more precise.
How to avoid bad audiences
You need to avoid any audience that can’t benefit from your product or service. Goodness knows that idea is as old as our business itself, but the truth is that many startups fall into the trap of not being honest about the audiences for their products. Unfortunately, most founders are too concerned about missing out on new money to consider the cost and time spent with various audiences. It doesn’t take very long to figure out who your most likely customers are and who your product doesn’t fit with. The best entrepreneurs I know are honest about their audiences and have worked with relevant teams to test their products. Who you should ignore Ideally, you’d avoid sending potential customers a million emails with no proof of concept and just hope that they’ll make a purchase.
I’ve said many times before that growing a startup is about moving fast and iterating as you go, but knowing who you’re selling to at all times makes the process much less stressful. Product Market Fit provides a solid blueprint for how to do just that. Hopefully, the insights here are of use to you, too.