By training project managers, Brainmate has aided in the creation of various products customers absolutely love. In our interview with Nick Coster, Co-Founder and Head of Training at Brainmates, he shares the secret to being able to create successful products: achieving product market fit.
What is Product Market Fit?
Nick defines product market fit as when a sizeable group of people have found enough value in your product to exchange something for it. That essentially means that the product has a committed group of customers. When you achieve product market fit, what follows is the accelerated growth in popularity and sale of your product. However, one of the biggest issues that any start-up faces is the failure to achieve product market fit early on.
Source: http://www.assignmentpoint.com/business/marketing-business/product-life-cycle.html
If you apply this concept to the product life cycle curve, product market fit occurs right at the end of the Introduction stage, and kick-starts the Growth stage. Quite clearly, you’ll see that the failure to achieve product market fit early would not allow for sales to increase. Instead, sales may even decline, as there are no committed consumers of the product.
Having customers that are engaged with a product is called “traction”. Reaching product market fit would be an indication that your product has a high level of traction, as there is a group that is loyal to your product. Investors care about traction over everything else.
How to Achieve Product Market Fit
“Make things that people want.” This very famous quote by Paul Graham accurately captures the idea of how to get customers for your product. Create a product that people want, and what people want is a solution to their problems. If you can provide a solution that people are willing to exchange money or other types of value for, achieving product market fit becomes much easier.
Here is a suggested plan for making what people want:
Find a problem.
Are people being bothered by something? If you can create a solution to this problem, then sell it to them. You’ve just found your potential customers. Just make sure that no one else is trying to solve the same problem.
Make sure it’s a problem worth solving.
Don’t start making your product yet! You have to be sure that the problem you chose is a problem that people would willingly pay to solve. If people aren’t willing to part with their money to solve that problem, it’s not worth it for you to try to solve it.
Research your customers.
Nick says a great product manager should always be in the knowledge loop with his intended customers, able to understand their thoughts and needs.
Instead of just theorising about people’s wants and needs, its best to have the actual input of the users. Listen to their feedback and adapt. Suggested methods to do this would be to hold face to face dialogues with members of the group that’s facing the problem, making prototypes to let volunteers try out, and creating minimum viable products that can be tested and sold in a real market to gauge the receptiveness to the product.
The Next Step
Having a good understanding of the market and of your intended customers is vital in allowing you to create a product that is not only wanted, but needed by people. However, this is only half the process to achieving product market fit. Next would be to understand how customers react to new products.
Source: https://blog.prototypr.io/design-for-crossing-the-chasm-1c4d4c68a3f1
Making reference to the Customer Adoption Curve, Nick explains that there is a trap in the market. Product market fit may seem to have been achieved when some of the Early Adopters demonstrate continued use of a product. However, true product market fit only occurs when the early majority shows persistent usage of the product. If a company mistakenly interprets the first instance of some repeated use as product market fit, they will end up missing out on the growth that true product market fit provides.
What would prevent this from happening is a good understanding of customer behaviour, and knowing how to utilise it.
Innovators
The first users of a product. Typically young and enjoy taking risks. However, they have lower levels of commitment, often losing interest and moving on quickly.
These people are the best to offer your minimum viable products to. This allows you to gain feedback easily, and modify your product before targeting the next wave of customers.
Early Adopters
Careful risk takers, these people are early opinion leaders who can influence other potential customers
Successful minimum viable products would allow for the first product market fit with this group
Early Majority
Carefully consider their actions, but are susceptible to the opinions of the Early Adopters
Use success from the Early Adopters to attract them, and continue to iterate the product based on feedback to gain true product market fit.
With your creative, revolutionary product now used by the majority of people, and having sustained usage, product market fit is achieved.
The value of understanding your target audience should never be underestimated. It is absolutely vital to understand their desires in order to create a product that people want and need, and understanding their behaviour is key when trying to spread the influence of your product.
Watch the full summit by Nick Coster here
