Seasoned entrepreneurs can shed light on how they’ve come to find their product-market fit, but there isn’t a one-size-fits-all approach to the process. Every product is different, every industry novel. Despite that reality, product potential and market potential are strong indicators that founders and business leaders could be well on their way. Still, that’s not to say that market potential is the same as the overall market size. Entrepreneurs should be cautious in establishing metrics, having to consider organizational limits and capacity of the enterprise to execute business processes.
Conventionally, product potential is measured through metrics like customer satisfaction surveys, net promoter scores (NPS), usage interval, and churn rate, but industries differ, and customer profiles vary. That being the case, a few of these metrics may work against some startups. For example, some of the world’s leading tech agencies don’t have stellar NPS ratings. Ultimately, the most critical metrics help leaders gauge if customers are likely to recommend a product to their friends, what level of affinity they have with a product, and how soon—if ever—do they stop using the product after a given time.
Why finding product-market fit is a challenging feat.
While finding the product-market fit, the most conclusive task is to figure out which elemental metrics can track and navigate the growth of the expansion levers. There is no substitute to well-studied data, so organizations that aren’t able to integrate a data-centric strategy will have a much harder time in finding their product-market fit than those who understand what their numbers mean.
Still, relying solely on data can be futile.
For instance, anyone who first installed a dating app is highly likely to stop using the service once they find a match they can settle with. Does that mean the startup’s service is terrible?
On the contrary, the app served its purpose. Depending on how life pans out for dating platform users, their attrition may mean different things for the app’s makers.
One of the more apparent reasons for a product not reaching its product-market fit is the absence of significations formed during the different phases of the product life cycle. Often, founders will bank on one aha moment and use this instance to fuel the rest of the project. Some people will go about tech undertakings, feeling like following their gut is enough. But things like these should never be gut-driven alone.
Furthermore, not defining the minimum viable product during the building phase will be misleading. Many product managers excitedly rush through the design and conceptualization stages only to end up creating a product they can’t use.
Despite having the least thinkable minimal viable product scope, terrific products will have the most suitable solution for that given scope. However, this shouldn’t automatically imply that startups and agencies can take their time. The faster users get to respond to a live MVP, the quicker they’re able to study adoption results. Never underestimate the power of the iterative feedback loop.
We found our product-market fit — what now?
Achieving the product-market fit is like shooting a target a few miles away. No matter how accurate your bulls-eye is, it would be best if you recognized that markets evolve. In other words, your product-market fit now, may not be the same tomorrow. The battle is only half won when you find your product-market fit today.
Once you’ve settled in your product-market fit sweet spot, it’s vital that you scale the offering by supplementing its capabilities. Double down on the features, and see what else you can better. A B2B may serve startups and small businesses during its beginning stages but may find the need to start exploring the serving of more prominent companies once it achieves product-market fit.
After reaching the product-market fit in the SaaS context, you ideally want to improve the product’s reach since you’ve now become sure that the product you’ve built carries warranted value. This is also the best time for revenue-driven departments like sales and marketing to enter the picture. The new goal in this phase of the process is to keep driving conversions to improve profit. In parallel, product experts should then be busy with improving user adoption and engagement to accommodate new users better.
Different phases, different questions.
Really, what it comes down to is the list of questions an entrepreneur asks. Once a leader has found their product-market fit, it’s only a matter of time until new questions should dictate the direction of the product. This is why measuring whatever factors are upping engagement is crucial, too—knowing what makes what tick decides the next batch of product iterations.
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