Product Market Fit - Notes #1
- Product/market fit means being in a good market with a product that can satisfy that market.
- You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.
- Product/market fit is when people sell for you
- Product market fit is a funny term, but here’s a concrete way to think about it. When people understand and use your product enough to recognize it’s value that’s a huge win. But when they begin to share their positive experience with others, when you can replicate the experience with every new user who your existing users tell, then you have product market fit on your hands. And when this occurs something magical happens. All of a sudden your customers become your salespeople.
- Identifying a compelling value hypothesis is what I call finding product/market fit. A value hypothesis addresses both the features and business model required to entice a customer to buy your product.
- Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.
- Changing teams, markets, products, names, and visions are all reasonable in pursuit of product-market fit. That’s the story of many companies: Instagram, Soylent, Anyperk, Twitter — all radically changed course from their original plan to find Product-market fit.
- What makes a ‘good market’:
- A large number of potential users
- High growth in # of potential users
- Ease of user acquisition
- Measure Product Market Fit
- Net Promoter Score (NPS)
- Do customers care if your company died tomorrow?
- Churn and user retention
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