How to Achieve Product-Market Fit
For long-term business success, product-market fit is a must, and it is a significant milestone for startups. It establishes credibility for the company’s offering and for the company as a whole. It also paves the way for future expansion.
What is Product-Market Fit?
The degree to which a product satisfies a strong market demand is referred to as product-market fit.
Product market fit has been identified as a first step toward establishing a successful venture, in which the company meets early adopters, gathers feedback, and measures interest in its product.
Examples of Product-Market Fit
- Slack
Slack, which is now known as an instant messaging platform used for workplace communication originally started out as a completely different business idea. The founders were developing a role-playing video game and Slack was developed to serve as an internal communication tool for the team.
The team realized that the market was saturated with role-playing games, but lacked a platform for workplace communication, so they changed their plan.
More than 10 million people use Slack as a medium of communication today. Slack’s quick turnaround demonstrates that shifting your focus to a better product-market fit is worthwhile. When you see a better opportunity, don’t be afraid to discard your original idea.
- Netflix
Netflix is an excellent example of product-market fit. People wished they could avoid the late fees they had to pay at DVD rental stores. Netflix demonstrated product-market fit by mailing DVDs to users on a subscription basis and allowing them to keep the DVDs indefinitely.
When the DVD trend faded, Netflix rewired the business model once more by shifting to a subscription-based model for the streaming service, thereby providing a better and less expensive way to entertain.
Netflix changed its business model several times to meet changing customer demand, providing a perfect example of what a product-market fit should look like.
How to Achieve Product-Market Fit
You can achieve product-market fit in various ways as fit is non-binary. Product market fit varies from brand to brand. Customer retention curves differ as well. However, there are some tried-and-true methods for achieving it.
A top product manager and author of The Lean Product Playbook, Dan Olsen offers a six steps framework known as the Lean Product Process which helps one test, revise and measure product-market fit the right way.
- Know your Target Audience
Identifying who requires the product or service you render is essential. The importance cannot be overemphasized as these are the people who are most likely to be your customer. They also decide how well a product meets their needs.
Defining your market audience helps you understand who you are building the product for. It will give you a better understanding of their needs, and pain points.
This can only be achieved by conducting market research and using the research result to create a buyer persona. The overall process will help you understand their needs and it would be easier to create products centred around those needs.
2. Determine the Underserved Customer Needs
After creating the buyer persona, the next process is to identify their unmet needs. It’s difficult to find people who want what your business offers when they have access to thousands of other products that cater to their needs.
A better option is to identify and address the specific customers’ needs that are not adequately met in order to create value for customers.
3. Define your Unique Value Proposition
You need to communicate your unique value proposition effectively. Your product should meet your customer’s needs better than any of the alternatives currently available.
Determine which of your product’s unique features will delight customers and how your product will outperform the alternatives.
When planning your product processes, make sure to include new features, new ideas, and innovative things that will pique the interest of buyers. This will make it easy for your target audience to make a buying decision.
4. Specify your Minimum Viable Product (MVP) feature set.
After defining your value proposition, specify the minimum features and functionalities you want to integrate into your first product testing.
This approach aims to build only what is required to provide enough value for your target customer to validate that your product is on the right track.
5. Create your MVP Prototype
A minimum viable product prototype that allows you to test ideas and solutions before building the actual product should be created. UXPin, Sketch, InVision, etc are some of the prototyping tools that can be employed to prototype your product before beginning testing.
6. Test your MVP with customers
Let your target audience use and test the finished prototype. This allows them to quickly determine whether the product truly offers a solution to their pain points.
Allow them to learn about the product and experiment with it. Inquire about what they like, dislike and want to see in the product.
Ensure you maintain an open and adaptable attitude towards the feedback. Then, integrate their feedback, wants and needs into the product for better performance.
Implementing these steps before launching your product will make you have an understanding of how the market will react to your product. It will also result in more efficient resource utilization and a high level of confidence that when your product is released, customers will find it valuable.
Want to know more about how to effectively conduct a product-market fit? Email info@digiscript.com for more enquiry.
