How Love and Product-Market Fit are two peas in a pod, by Luke Angell
Like most people in life, you probably have been looking or are looking for love, to help you live a happier and more fulfilled life. As an entrepreneur, you are also probably looking for another important element in life: Product-Market Fit. Well, love you probably know about already, but let’s define Product-Market Fit just to be clear; although as an entrepreneur I hope you are well versed in this concept too.
As defined by Marc Andreessen, “Product/market fit means being in a good market with a product that can satisfy that market.” Why is this important? Because it is the first step to being able to create a reusable, scalable business model which will allow you to turn your idea from a “start-up” into a “company” and build a sustainable business. Without it, you are doomed to fail.
Lack of Product-Market Fit is the reason that all startups fail. If not enough of the market wants your product, how can you build a business? If you run out of time, money, patience and/or energy before finding your Product-Market Fit, your startup will fail. So, as a startup founder you need to be looking to unveil your Product-Market Fit at all costs. This is your only mission and number 1 priority. But how can you do it?
Let’s go back to our comparison. Love and Product-Market Fit, although the concepts may appear very distinct at first glance, they are much more similar than you might think.
- It is a concept that everyone talks about
- It is a little hard to define
- You know it when you are in it
- Once you find it, it can make you happy for the rest of your life
So, which concept am I describing? Eerily similar, right? Even the process for finding them is almost the same.
So, as a startup founder, you need to be thinking about your product, just like you would go on a date looking for love. Your date might seem like a good choice at first, but you need to validate your assumption to be sure. You need to test it and go slow until you are sure that you have found the one.
Sure, there is love at first sight, but it is pretty rare. So don’t be fooled by a crush (false traction from some super early adopters). Stay with it for a while to be sure it is the real thing. Set up some metrics to measure and prove it. Remember, if you measure it, then you can improve it.
If it is not working out, break up with your idea and move on. Don’t be afraid to pivot and try different options. Change your product, change your team, or change your market. About 66% of all successful startups change their plans!
You wouldn’t get married after just looking at a picture of your potential spouse, right? Of course not! So don’t be tied down to the first idea/solution/product that you have. The market will tell you when you have found your Mr./Mrs. Right.
- When a great team meets a lousy market, market wins.
- When a lousy team meets a great market, market wins.
- When a great team meets a great market, something special happens
– Rachleff’s Law of Startup Success
Your parents probably told you something like, “Don’t get married until you are sure that you have found love.” Well, the same is true in business. Don’t try to grow until you are sure that you have found your Product-Market Fit.
First, start with a small number of customers and study intently, just how they use your product and speak to them to get real feedback. Tracking metrics is essential, of course, but they only tell the “what?” Contact your customers directly to find out the “why?”
Focus on getting users to actively engage with your product and not just download it or sign up. Learn as much as possible about what keeps them using the product because this is what is creating value for them and needs to be part of your value proposition for all future customers. Try to charge for your product as soon as possible because you will not be able to understand the true value of what you are offering until you get someone to pay for it.
Only after a number of users have moved through the full customer journey and are satisfied with your product, should you look to move into growth mode. Now you can start creating your marketing funnels and worrying about increasing user acquisition and growth metrics. Then you can start looking to see whether you can find your Product-Market Fit outside of your early adopters.
Oh, and how do you know when you have found it? Trust me, it’s like being in love – you will know it when it happens.
Mentor at Startupbootcamp IoT & Data Tech.