We have a fantastic product! If only the customers knew
Welcome to SaaS startups, where the gap between an amazing product and that product’s eager customers feels like you’re falling across the Grand Canyon. product-market fit is as critical as a GPS for a road trip. It’s not enough to have an amazing product. That product must dance like an excellent dancer dances. It must dance to the tune of the market. Here’s what happens when you get that critical concept wrong. In this article, I want to explore product-market fit and why it’s the startup holy grail. Let’s unpack this.
Understanding Product-Market Fit
They say that finding Product-Market Fit is similar to launching a spaceship – you’ve got your astronauts (your product) and then you’ve got the cosmos (the market). PMF is when your spaceship achieves a trajectory that guarantees your astronauts don’t end up floating endlessly and uselessly in space. Or, put another way, you find Product-Market fit when your product ‘locks’ with the space that is your market.
But why does finding PMF feel like a start-up’s life-support system? Because if you don’t find it, your product is like a gourmet meal in a world of burger junkies – loved but not wanted. It’s not sufficient to have a great product. It’s not sufficient to have the right product, at least at the outset. And it’s not sufficient to have your product commercially accepted. Praise and support might come cascading down from the ivory tower, but for your start-up to succeed, you need more. Push it just a bit further with PMF, and you’ll see that finding PMF is akin to a game of hide and seek in the dark. PMF is hard to see. There are lots of misperceptions, and many assume that landing PMF marks some fixed and unchangeable milestone in their product’s evolution. But it isn’t. PMF is actually a never-ending, grinding process of continuous discovery, adaptation, pivot and refinement.
Identifying Your Target Market and Customer Needs
Finding your target market is like being a detective searching a crowded city for the right suspect: here, you have to zoom in on the exclusive club of people who really need your product – the ‘whodunit’ of your market. Market research provides the magnifying glass. This process elicits less-than-obvious customer patterns and preferences.
But how do you do it? It all starts with user personas: fictional characters that are representative of your best customers. Think of your user personas as the main characters in your product’s screenplay; if you know them, you have a Netflix hit on your hands. What are their demographics? What challenges do they face? Are they tech-savvy entrepreneurs? Managers pressed for time? Knowing these subtleties enables you to better customise your product to meet their unique requirements, making it just as essential in today’s environment as a smartphone.
Remember, though, in this crowded market, they have to be the right eyes – as everywhere, you have to be seen to be seen – and you might just stand a chance of being heard.
Developing Your Value Proposition
Armed with knowledge of our target markets and customer needs, we can then create a value proposition – our very own hit song on the radio, stating what makes a product necessary, why it isn’t just another fish in the ocean, but a lifeboat in a storm.
Your value proposition – the ‘why’ of your product – defines the identity of your product. Why would customers choose you over others? This is where you need to use your product features, aligning their value proposition with customer pains. It’s about building a great suit that fits. Your product needs to have a solution for specific problems, as unique as fingerprints.
But don’t stop there. Distinguish yourself. What differentiates your product in a market that’s overly crowded with SaaS solutions? Your unique technology? Your rock-bottom price? Your impeccable service? If you can do that, you’re not selling a product, you’re offering a solution.
Building and Testing a Minimum Viable Product
Armed with a compelling value prop, it’s time to get practical. And that’s where the wily little Minimum Viable Product (or MVP) can take centre-stage. The MVP is your product’s first faltering steps into the real world: this is your product’s first date with your market – you want to impress them, yes, but you want to learn as much as possible about them, too.
The MVP is the lightest possible realisation of your product but contains just enough to satisfy its core need. It’s kind of like the scout of your product army, sent to explore and assess the terrain. The simplicity and lean nature of an MVP is its strength because the external feedback you receive from it is full of indispensable insights. This is the true power of the MVP as it forms the basis for future product iterations, or the sustained development of your product based on real-world use and reactions.
Testing an MVP is like cutting the umbilical cord, letting your product grow up and face the real world. Perhaps you intended for it to be a knight in shining armour for your customers, but instead it turns out it just needs some training to speak human. With every iteration, you infuse the MVP with smarts based on user feedback.
Utilising Beta Testers and Collecting Feedback
Once your MVP has been launched into the wild, the second step is to listen to your beta testers. Beta testers are the restaurant critics who will taste your product and season it to perfection.
Beta testing is essentially a test screening for your movie. You get real users (aka your test audience) to play with your product in a highly realistic manner. The intel that comes out of this phase is precious – you learn how people experience your product, where you have bugs, and what they might prefer you to tweak. But what can you do with all this delicious feedback? Consider this advice.
Find the right testers. Surround them with the product, and create formal opportunities for feedback: structured surveys, informal interviews, observation, all captured on the recording. This needs to be analysed. Dig out the patterns. Find the priority problems. Be open to reinterpretation. There’s always a gap between the real product and an ideal image for customers. As soon as you have that gap, every piece of feedback is a chance to edge a bit closer to a product that meets or even exceeds market expectations.
Measuring Product-Market Fit
You have iterated on your product and have it tuned to a satisfying extent following feedback from beta testers. Now you want to find out whether you’ve reached this glowingly specific point: Product-Market Fit. How do you go about checking your product’s pulse?
Measuring it goes far beyond share of sales as a metric, and delves deeper into other measures that reflect customer satisfaction and engagement such as user retention rates, customer lifetime value and net promoter scores. It’s another way to look into the customer mirror to see if your product really resonates with those you designed it for.
However, remember that the market is nothing if not a populous and ever-changing weather vane in a 100-knot storm. It pays to check and check again. Look at your metrics often, and frequently map them against industry benchmarks. It is this constant iteration that will keep you close to the market and its needs and expectations, enabling your product to match the market not only today, but down the road as well.
Even if Product-Market Fit is the starting block in the SaaS marathon to market, it is also the race you must never stop running. It’s a product that is trying to keep up with the market’s needs and then become aligned with its evolution; PMF is both a destination and a journey.
Let’s keep the conversation going. If you’ve run into any challenges achieving Product-Market Fit, or found any strategies that worked, we’d love to hear those, too. Visit our site and shoot us an email, you never know, we might be your knight in shining armour.