So why should you care about Product Market Fit?
Short answer : Because if your product isn’t completely useless, it has a market. It’s probably not unique either. So there is a good chance you don’t have the answer to “will your product sell?” right out of the box.
You need to check for product market fit.
Obtaining product market fit automatically is unheard of. You may have thought of some really cool ideas, and sure you said to yourself that no one is doing this right now. Part of your mind is already thinking of ways to take advantage of this.
But then you think “Wait a minute, why hasn’t anyone done this before?”. It comes as a bit of a thought twister and you begin to wonder if you’ve missed a step. Those who seem to fixate on the uniqueness of their idea in time realize that some version of it has already been attempted. It might come as a shock, that it may not have worked out so well. (After all, 90% of startups globally do encounter failure in one form or another)
If you are lucky, your idea will pass this test and you will not have to go back to the drawing board (there is a good chance you will, and this is a good thing). But there is flip side to this situation. Now you have an idea which is not validated for all the other factors that you haven’t considered. A lot of uncertainty, in fact, the larger the scale of the idea the larger the uncertainty.
Enter Product/Market fit. This is a near fail-safe strategy that can help ensure you have considered everything and especially the important stuff. This strategy can be broken down into 4 steps, follow them and you should feel a little more certain about your idea :
Define a goal. And not a vague one.
The goal needs to have a degree of periodicity. This characteristic is important because you are focussing on growth. Another important characteristic is that you account for factors that directly or indirectly contribute to growth in some way, otherwise tracking unnecessarily will just pointlessly complicate the process.
For example : Set down a goal in the following way – ‘Get 500 paid installs across 3 buyer personas each and have them use to app at least 2 times every 3 days. Increase the number of installs each week by 20%‘
This is a clear and precise goal that can be tabulated and tracked.
Now that you know what your goals are, it’s time to note the metrics that directly or indirectly affect them. Make your life easier by assigning a third party tool to track these, if possible. As an added advantage, this tools often have benchmarking services that let you know where you are in the race.
Companies such as Kissmetrics and segment.com provide many such tracking tools. Of course, don’t over complicate things; if you are tracking basic metrics from your website, its best to rely on Google Analytics (it’s free).
Now it’s always good to go the extra mile and be really sure. Often, the best way to do that is to ask or observe your users. The Customer Development Survey by Sean Ellis is a phenomenal way to know some of the key details you would want to track.
3. Break Down
No, not the mental one. This is one is far more complex. This phase takes everything you are doing and arranges them in a collectively exhaustive, yet mutually exclusive way. All your processes, your end results, everything. It forces you to assess each step and work on the same (or at least put it on the roster, so when the time is right you work on it nonetheless).
Dave McClure shares a brilliant tactic termed AARRR process.
Namely, Acquisition, Activation, Retention, Referral and Revenue. Most ideas have all of these things to worry about and there is a very high chance your app does as well. By separating everything you do under these processes, it gives you a clear view of how things are going and how you have the capacity to improve the same.
Over several iterations of the above 3 steps, you will have a list of things that work really well for you. It’s now time to bring out the big guns. Growth hacks are usually the best ways you can maximize your returns (no matter which phase your company is, read here why growth hacking is especially important for early stage startups).
Over a course of time, and adhering to the above processes, you will see that your original idea is either nowhere to be seen, or has significantly changed (If you are really lucky, it will stay exactly the same). Do not despair, you still have an idea that has attained Product Market fit and your chances of success have definitely increased.
Let us know if this helped you at all. Write to us at email@example.com. You can follow us on twitter @bevy_me.