If you want your business to succeed, you need to build products that your target customers really want. At the early stages of starting up, the most important thing you want to achieve is the ‘holy grail’ of business call product-market fit.
Without customers, your business is headed to the startup’s graveyard. When startups fail, half the time, it’s not because they didn’t develop and deliver a great product; it’s because they developed a product that no customers want or need.
You don’t really have a sustainable business until a significant number of your customers can say that they would be “very disappointed” without your product.
Marc Andreessen paints a vivid picture of product market fit. When you’ve hit product-market fit, he says, “the customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers.”
Something as important as your product-market is not to be left to luck or gut feelings. Here is how to test and build your product to product-market fit.
1. Identify and document your assumptions
As long as you’re pre-product-market fit, you should accept that all you’re working with are assumptions. They may be calculated assumptions, instinctive assumptions, experienced assumptions or whatever you want to call them, but assumptions nevertheless.
It’s the market that decides if you’re right or not. So document everything you know about your market – who they are, where they are, how to acquire them etc.
2. Put your assumptions to test
Attempting to invalidate your assumptions is probably the most important aspect of getting to product-market fit. Meet and speak with your customers about your product. Doing this will help you understand your customers better and how your product is meeting with their needs, or not. Obviously, knowing the right questions to ask is crucial to this process.
There’s a super useful survey here that will help you capture all the relevant information about your product. The feedback will help you to adjust the product for market fit.
3. Evaluate the risk factors
Let’s face it, tinkering with your product may change the product altogether. And you are likely to lose a segment of your market. So your major challenge at this point is obtaining sufficient evidence that those changes will elicit the desired response in the largest segment of your customers.
This is the reason why people build MVPs
An MVP – minimum viable product – is your product at its barest minimum. A good MVP will give you real-world data about your customers and how they interact with your product i.e. what they use the most, how they use it and when they use it.
4. Build your product
Once customer need and usage data are streaming in from your MVP, it’s time to start making decisions. What stays and what goes?
Remember, you’re building this for them, not you. So tinker, tear down, streamline and rebuild. Keep doing this and you’ll find out you’ve built a product people are fanatic about.
5. Keep testing
Now that you have got your product-market fit, time to scale, yes?
Not so fast.
Take another survey. Remember that real product-market is when at least 40% of your users say they would be “very disappointed” without your product or service.”
Ask your users this: “How would you feel if you couldn’t access out product?”
If you have more than 40% of your customers saying they’d be very disappointed, it’s safe to say, your product has achieved the market-fit, and ready to scale.
Also published on TheStarta