Key Points to Help You Identify Product Market Fit
Rob Ristagno shares a company post that explains the importance of understanding product market fit and where to find it.
It’s a story we often hear on the CEO Campfire Chat podcast. A founder faces a problem in their life. They search for a solution in the marketplace, and it just doesn’t exist. Instead of sitting idly back, they create a product or service to address their need and bring it to market to share with others.
The passion that drives an entrepreneur to start a venture can take a business pretty far. But at some point, founders need to identify the difference between why they started the business and why they continue to run it. Customers out in the marketplace are not carbon copies of your founder, and the reasons they patronize your business may differ from the reasons the founder started it.
Part of effectively scaling a business is acknowledging this gap between founder and market and taking steps to make sure you’re creating offerings that address the needs of your most profitable audience. What we’re really talking about here is finding your product-market fit.
The Importance of Product-Market Fit
Getting a startup off the ground is no small feat, and failure rates are high. Many things can tank a fledgling organization, but a lack of product-market fit is the most deadly. Poor product-market fit accounts for 34 percent of all startup failures.
How is it that so many startups miss the mark on product-market fit? Often, it’s an over-reliance on anecdotal evidence from the founder and a lack of letting the market speak for itself. You can’t cling to your original ideas when the market tells you it’s time to change your approach.
To find the correct product-market fit, we need to explore another concept: jobs-to-be-done.
Clayton Christensen first introduced the concept of jobs-to-be-done. The idea is that, no matter what product or service you sell, customers are purchasing it to do a job. It’s up to you to understand that job and optimize your product to serve that need.
To illustrate the principle, Christensen shared the story of a fast-food restaurant that wanted to boost sales of its milkshakes.
Key points include
Where segmentation fits in
Going beyond averages and assumptions
Read the full article, Your Founder Is Not Your Market: Finding Product-Market Fit, on SterlingWoods.com.