Product market fit describes the level to which a product sufficiently fills a strong market need. To be blunt, if a product can’t fill a need or solve a problem, it’s not a good idea. This applies in all facets of business, from consumer products to financial products; the old concept of “the customer is always right” holds true. What’s important to remember is that a startup’s actions, or lack thereof, can significantly impact its ability to maintain its competitive advantage.
One of the easiest ways to determine if a solution is truly solving a problem worth solving is to ask people. People want to solve problems. If a startup develops a solution to a problem that people want to solve, it will likely succeed. There are two ways to look at this approach: Either people are searching for this solution, or the company effectively sells them something and fires an existing alternative in the market. Finding what they are using currently and understanding the progress they want to make will help you develop a deep understanding of the jobs they want to be completed. The theory of jobs-to-be-done helps as it focuses on why your product is hired and why alternatives are fired.
Successful product-market fit hinges on identifying specific customers by addressing these particular needs and jobs. The challenge with identifying customers revolves around many factors, including where the audience hangs out, their characteristics and so on. The startup founders have to think creatively to find innovative solutions for these issues.
A key factor in ensuring the product-market fit is appropriately assessing where its customers are positioned today and where they are likely to end up in the future. The startup founders should identify where they see the startup going in the future. Doing so allows the founders to align resources with the right priorities. For example, if the startup focuses on solving the needs of a particular segment, think about how this segment is changing and how the startup can aid this segment.
Once the startup has the product-market fit, one of the biggest killers of startups is not understanding which channel they can use to grow their business. This is called product/market/channel fit, and a whole other article could be written on this. However, I will discuss the main elements of this here.
The startup should focus on the areas where the industry congregates. For example, if you are looking to use social media channels to grow your business, think about which channels work for you. These could be large platforms, such as LinkedIn or Facebook, or lesser-known platforms that fulfil a need. It would help if you thought, who am I targeting, and how can I reach them to continue growing my product and become a stronger startup?
Many new startups struggle with how to grow to the next level, especially when they’re competing with established players in their field. But this is where the entrepreneur’s growth hypothesis comes in. When faced with obstacles, startups should consider the resources in their pipeline, what customers want, the jobs they want to be completed and how to address those needs. If these questions are answered successfully, the entrepreneurial growth process accelerates. The more growth there is in a startup, the more likely it is that they will find growth opportunities.
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