Finding product-market fit

What is Product-Market Fit?

Product-Market Fit is a term used to describe the alignment of a product with the needs of its target market. It is an important concept for startups and businesses, as it helps them to understand how well their product meets the needs of their customers.

The concept of Product-Market Fit is closely linked to customer acquisition and retention. If a product does not have product-market fit it will struggle to acquire and retain customers.

The 4 Steps Process to finding Product-Market Fit

The process of finding product-market fit can vary between different teams and products, but there are usually at least four steps:

Step 1: Market research

Even if you’ve conducted market research in the past, it doesn’t hurt to look at customer personas, buying journey, and market size again—especially if you’re having trouble finding product-market fit.

The target customer is the person who eventually decides whether to use your product or not. So, it makes sense to do market research and more specifically market segmentation to define your customer. Segmentation is all about dividing the market into segments which are similar in needs and behaviour.

Step 2: Prototype

A prototype is a very simple version of your product. It should take very little effort to build and could be anything from a sketch to a 3D model of your idea. In the technology world, we tend to create prototypes with product design tools such as Figma or InVision.

A more advanced form of prototype would be a minimum viable product (MVP). An MVP is a more or less functional and usable version of your product, albeit in very early stages.

It should go without saying that investors and other internal stakeholders should provide feedback on your prototypes.

Step 3: Validate the prototype with customers

Once you have a prototype the next step is to test it with potential users. This enables you to gather information (and check your assumptions) about your customers and market, which will help you find product-market fit once you launch with the real product.

During validation, you collect and analyze information that maps back to your product’s value hypothesis, and the assumptions you made about your target market. That information can take the form of customer feedback or surveys of potential end-users who share key characteristics of your customer persona.

Step 4: Adjust based on feedback

By now you will have learned a lot of information from your research, prototyping and validation. You will have validated (and invalidated) many of your initial assumptions about your product and target market.

The next step is to make changes based on that new information. You’ll want to make these changes as quickly as possible using the prototype, so that you can quickly loop around and begin the process of validating and adjusting again.

Summary

Finding product-market fit is essential for the success of any product. By following the steps outlined in this article, you will be able to find product-market fit more consistently.

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