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Finding Product Market Fit

Product Market Fit happens when the product is validated by the market. This means that customers are using it according to the company's expectations and there is a organic growth happening.

Even with great ideas and highly motivated teams, unfortunately, most companies cannot find their market fit. What should be done in this case?

I had some experiences with finding market fit and I recommend these 3 steps below to help move companies forward:

  1. Deliver the product missing key-features (based on data)

  2. Review the product go-to-market strategy

  3. Review the product value proposition

These steps can be applied for a full product, but also on a smaller scale, for example for key features inside the product itself. Ideally, they should be driven by Product professionals, such as CPOs, Product Managers, and Product Marketers.

Let’s dive a bit into each step:

1. Deliver missing key-features (based on data)

Be careful with the feature factory syndrome where companies focus on number of features delivered (output) instead of measurable value generated (outcome). For more details, check this article about Feature teams by Marty Cagan.

Maybe the team, sales, or top management still believes that the product is missing some key feature(s) or additional UX tweaks for it to find its market fit.

Ideally, there is data backing these assumptions, because we all know that investing more into a product that is not reaching its market fit, can be demotivating and actually very expensive.

As an example you might discover that for your e-commerce to get traction in a specific country, data shows that everything is great until the checkout page. Doing some painted-door tests, market research, and customer interviews, you see that you might be missing a PayPal payment method and Pickup stations for delivery service options.

Delivering new features or tweaks is always a valid option, just remember to define Success Metrics for it, so you can follow its results. If those Success Metrics are not being achieved, it might be time to say that enough is enough and think about another strategy. Reviewing your go-to-market strategy would be my second step.


2. Review the go-to-market strategy

According to the book LOVED by Martina Lauchengco, which I highly recommend, one of the biggest mistakes of companies is that when they are pressured to grow, they usually start focusing on sales, neglecting or even not considering their go-to-market strategy.

Growth is important and we all know that this is usually the main way that companies survive. But before focusing solely on sales and marketing, the Product Marketing team should be able to answer most of these questions:

  • Who are the customers that our product is aiming for?

  • Are the marketing channels correct and creating traction for potential customers?

  • Is the communication language correct for each of these channels?

  • Is the sales and marketing team having the proper training to communicate with customers?

  • Are the pricing and packaging strategies correct?

  • How is the product compared to the competition?

  • How is the product’s conversion rate? Which step should we improve?

  • What is the product's Net Promoter Score (NPS)?

As you may see, these questions can be quite huge topics and ideally should be reviewed on a quarterly basis. This is mainly the work of Product Marketers with strong support from Product Managers, Marketing, Sales, and UX. An awesome article that I recommend about this topic is the article Can you Grow Without Product-Market Fit? by Daphne Tideman.

If even after reviewing and acting on all these topics, you are not being able to find your market fit, it is time to review your product Value Proposition.


3. Review the Value Proposition

Value Proposition is a short statement that clearly communicates why customers would be interested to use / buy your product and services. A Value Proposition is usually the very first thing that you see in the company website.

Before rushing to define a new Value Proposition. You should deep dive into these questions below.

  • Who are our customers?

  • Which segments of the business your product will focus on?

  • Which jobs do our customers need to get done?

  • What are their pains and gains and how do we act on them?

  • What is our differentiator?

While doing this exercise, you might figure out that:

  • Your product is trying to be just too much

  • You barely know who are your customers

  • There is no agreement on the product differentiator

  • There is no agreement on jobs that customers want to get done.

After answering these questions, you will be able to redefine your Value Proposition. This is a great exercise to see if the product is still moving in the direction of the company vision. A book that I really recommend for the topic is Value Proposition Design.

As you may have guessed, this exercise will surely make you go back to the first two steps of this article. I would say that this cycle is very healthy for the organization to have.

I am super interested in knowing what is your take on finding product market fit!


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