Zero to Product/Market Fit
Product-market fit describes a scenario in which a company’s target customers are buying, using, and telling others about the company’s product in numbers large enough to sustain that product’s growth and profitability. A product/Market fit generally means being in a good market, with a product that can easily satisfy the market.
According to the product/market fit pyramid, created by Dan Olsen; the market comes at the bottom with under-served needs and target customers and the product with its feature set value proposition and UI/UX comes at the top. The product/market fit comes somewhere in between them and fills the gap left behind. When there isn’t a good fit between the product and the market, you can always tell. Customers aren’t getting enough value from the product, word of mouth isn’t spreading as quickly as it should, use isn’t increasing as quickly as it should, press reviews are “blah,” the sales cycle is too protracted, and many transactions never complete.
Also, when product/market fit occurs, you can always sense it. Customers are purchasing the product at the same rate as you can produce it – or consumption is increasing at the same rate as you can add new servers. Money from customers is piling into the company, you are hiring more and more people, the media is applauding and branding you as the new hot thing wanting to talk to you about it.
How to measure product/market fit?
One can analyse by oneself by asking these simple question:
- Does any group of potential consumers suggest that they will switch to your product after being surveyed or given the opportunity to test it?
- Are some people prepared to test your product after rejecting comparable ones on the market?
- Do individuals correctly associate your product with the proper rival alternatives during user testing?
- Do users show a grasp of your product’s unique value proposition or differentiators?
- What are your underlying metrics (such as user retention rates) and how do they compare to those of your competitors?
Certain qualitative and quantitative attributes are : NPS Score, Churn Rate, Market share, Growth Rate, Word of Mouth, etc.
What is a market anyway?
Ever wondered how one even defines a market… A market consists of all the consumers who can search for and compare products for a use case they already have in mind. But how to find out what products are the consumers looking for, what do they want. The easiest way to do that is using the Keyword Tool, which tells you how many people are searching for a particular keyword over the internet. If you find out the answer to how many people are searching for a particular keyword or a product and it is in Millions or more, congratulations your market is huge.
