What is Product-market fit?

Key points

Simply, it means you have a GOOD PRODUCT for a GOOD MARKET!

In other words, you’ve identified the RIGHT problem that is BIG ENOUGH to SOLVE for, i.e. it’s WORTH IT and you know HOW TO solve it BETTER than others who are in the market already.

  • It describes a product that fulfills the needs of the target market i.e. your BUYER in a way that can bring you sustainable growth and profitability.

  • Doing a thorough product-market fit analysis is key before investing your time, finances and resources in building, sales, marketing, etc. It’s basically one of the very steps before you go all in.

  • It is an ON-GOING analysis that must be imbedded in your product development and product management processes, like forever! BUT it does get easier and more clear for you as you go! It’s one of the main reasons companies vanish after many years of success, or the reason behind a pivot and growth, big or small!

How you do it?

To do a proper product-market fit analysis you need to:

  1. Understand your target market, i.e. BUYER and the need you ASSUME they have through research, survey, etc.

  2. Define your value proposition. This is why your target market will PAY for your product.

  3. Develop your minimum viable product (MVP). It is the smallest sample of your value proposition. Your target audience can use it, taste and and feel it. It’s also feasible for you to build it. Much like a sample of a perfume before you build a whole factory!

  4. Test your MVP with your target users and ITERATE based on their feedback, continuously.

Contact Sarah :

Email: sarah.h@yeyzer.com

Mobile: +1 (415) 854.2080

How you measure it?

There is no single metric, but there are some signals to look out for:

  • Some of your potential target audience says they will switch to your product, or they just do.

  • Others are rejecting competitor products and trying yours.

  • Strong retention rates even if your user base is still small, also better growth metrics compared to your competitors.

  • Qualitative factors like word-of-mouth and organic growth exist.

Keep in mind, successful companies never stop measuring and monitoring and building. This is what is called “continuous improvement” in a sense.

So yes, you NEED it at start to build the right product for the right user, AND you need it as you go, even at growth phase. WHY? To stay on track with the core PMF principals and reduce business risk, increase customer satisfaction, enhance profitability, and enable scalability!