Our series of articles on a startup journey continue. The challenging step is here. Product-Market-Fit (PMF) is the initial phase of a startup which needs to be successful for an effective launching of a product.
Let’s define it first.
According to Marc Andreesen it means to be in a market with a product which can satisfy the market. Another way to look at it is to observe in a survey circulated in the target audience to measure viability of a product for that certain market in a quantitative manner.
This stage in the product development is crucial because it is necessary for sustainable business development eventually. It also helps in devising a strategy for not only marketing, but production of the product as well in accordance with customer needs. And Minimum viable product (MVP) will make it possible for you to make all the calculations related to steady growth, customer-satisfaction, and minimizing risks.
MVP is a method in a product development which helps in presenting the initial product to be made available in the market for targeted customer. Any more modifications in the product are depended upon the feedback of users. Any new technology does not immediately diffuse in the market. Diffusion of an innovation technology based on these 5 steps:
Not every technology is for everyone. You have targeted customer in the market and your product must met his needs to keep the production of product going and growth scale upward.
Dan Olsen is a well-known expert in this field and has published a book The Lean Product Playbook where he elucidates the step by step process of reaching at a conclusive stage for PMF. We ‘ll discuss it briefly.
Well, there is a pyramid mode of thinking to clarify this stage.
Following questions are needed to be answered from bottom to top.
There are certain indicators which also help you determining the direction you are heading with your product.
The first one is, if your product hit at the right mark in meeting target customers need, they will start marketing of the product on their own. In all the marketing techniques, a word-of-mouth phenomenon is still powerful and very influential. It leads to group think which forms further networks to spread the word real-fast.
Secondly, if demand of your product is overwhelming then you must have achieved an ideal stage of market-fit for your product. There is also an iteration factor which plays decisive role as an indicator. It means if target customer consumes your product, repeatedly, then there are more chances of increment in growth factor. Churn rate which is the number of customers who are not satisfied with your service should be minimum for gradual growth of your company.
Moreover, risk factors linked with technological, financial, and internal team crisis if not managed properly can weaken this process of engagement with customer and can drastically change the dynamics of product –market fit. Because in top 20 reasons of startups failure, “no market need” was at the number one position.
There are some popular myths about product-market-fit which can haunt you if you overlook them.
To set the momentum of customers in successful motion that accelerates the growth path for your company you need to painstakingly work on market need which guarantees customer satisfaction and then developing and updating your product in accordance with it.
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