Loss of product-market fit is the main reason for the failure of most startups and new products. Therefore, experts emphasize that the launch of any product should be only after ensuring that the product is compatible with the market because failure will be certain if otherwise.
Why do you need the product-market fit? You need to have a product-market fit because no product will spread to the market and be accepted by customers unless the product is fit to the market.
This article will show you the main concepts regarding product-market fit. Also, it will show you why you need the product-market fit? Moreover, why is this prerequisite for the success of any startup or new product? Let’s get started
Table of Contents
What product-market fit means?
First, let us begin with some basic terms related to the process of product-market fit to make the picture clearer:
the product means all value offered to the customer and not the product alone.
The value proposition
The sum of the advantages offered by the company to the customer, in addition to the product or service.
Value works to solve a problem that the customer has or satisfies his desire.
Value is the main reason why customers choose a specific company over other competitors within the market.
The value expression is used instead of a product or service because the word value covers more than the product alone.
For example, the value can reflect the product and its services, such as warranty period, after-sales service, etc.
The market includes all the elements that affect the sale of the product to the customer, such as the wishes and needs of customers, the purchasing power of customers, means of delivery and display of goods available, means of promotion and advertisement available to customers, competitors, alternative and complementary products, etc.
Product market fit occurs when the company offers a product that suits the wishes and aspirations of customers at a reasonable price.
When your product offers the right solution to the customer’s problems, you will create a fascinating relationship with the customer (Wow), making it easy to respond to your product, especially if the price is appropriate.
The importance of getting the product-market fit
If companies cannot obtain the Product-market fit, it becomes challenging to sell the product.
Customers will not accept a product that does not match their desires and needs. This will result in slow or no product sales and a significant loss to the producing company.
The lack of product-market fit is one of the main reasons for the failure of startups.
If the company has a reasonable degree of product-market fit, the sale will be cost-effective and straightforward.
Therefore, the consultants, especially the startups, insist on not launching any product until after ensuring that the product is compatible with the market because failure will be sure if this is not done.
How to get the product-market fit?
First, the customer’s desires and requirements must be thoroughly understood before building the product.
This is done in several ways; the most important and best known is issuing a Minimum viable product (MVP) presented to some customers to make comments.
What is the Minimum viable product?
MVP is an image or a brief version of the product. It contains only the most essential specifications necessary for the actual product. It is considered a means of discussion between the customer and the company.
MVP is a quick way to get the customer’s reaction to the original product before producing it to reduce costs and ensure the product-market fit.
MVP is the main component of the lean startup methodology. For more information on this methodology, see this article.
The importance of gathering information about the target customers.
Knowledge of the details of customers’ lives is an essential feature that enables companies to provide value to meet their customers’ acceptance. The customer’s feeling that you know the details of his problem or need will undoubtedly make him listen to you very well. Thus, they are best able to offer solutions and products that match it.
The customer buys the product because it solves a problem or satisfies a desire. The following paragraphs will show you the most critical issues and difficulties customers face and how to target them to obtain a high degree of product-market fit.
Determine, what value does your product offer to the customer?
Any product must target a customer’s need or desire to make sense. It should give him value. It is, therefore, imperative to determine what value your product offers to the customer.
The following are some forms of value that the product can provide:
- Satisfy customer’s needs.
- Improve the efficiency of an existing product.
- Improve ease of use.
- Enable the customer to access the product easily.
- Provide a lower price for the product.
- Customizing the product to suit the requirements of a specific customer or segment of customers.
- Help the customer to accomplish a specific task.
- Provide a registered trademark for the customer.
Generally, the value provided is either a solution to a problem or a response to a customer’s desire or need. In other words, the value either reduces pain or increases the happiness of the customer.
The best-selling products are products that solve the problems or difficulties that customers are facing. Because human nature first seeks to solve the issues and challenges before searching for luxuries and desires.
The following section outlines the types of problems customers face and the best problem your product could solve.
What are the problems and difficulties experienced by customers?
Problems and difficulties encountered by customers do come in different images and bodies, and the following are the most important pictures of the issues faced by potential customers: –
Hidden problems: – Sometimes, there is a problem which the customer might not be aware of.
Dormant Problems: – The customer knows that he has a problem, but the degree of the difficulty does not motivate him to search for a solution, or the customer may be unaware of the solution to the problem, so he is not looking for a way of solving it.
Active and apparent problems: – sometimes, customers realize the existence of a problem and look eager to find a solution but fail to take bold steps regarding the solution.
A problem haunting: – In this case, the customer realizes that he has an issue that troubles him. The customer then works hard to find a solution for them. Through his experience of the problem and the pain caused, he develops the idea and vision to solve the problem – even if he has been able to get some solutions, he still needs a better solution, and he is willing to pay for it.
The problems and needs that your product solves or satisfies must be studied carefully and in detail. For example, are these problems necessary or urgent, or are minor issues overlooked for some time? Is it essential for the customer to get your product? Or nice to get it? All these answers can tell you the level of your product-market fit. Also, this will reflect the expected sales and customer acceptance of your product.
It should be noted that the best type of problems that can be answered by the customer quickly and efficiently are the problems haunting the customer who has tried and tried to get them solved. This type of problem and needs – when you can provide the right solution, will create a kind of fascination (Wow) to the customer and respond to your product quickly, especially if the price is appropriate.
How to test product-market fit?
First, the product-market fit can be tested by repeatedly asking these questions:
– Is the problem or need that your product solves necessary and urgent, or a minor problem?
– Is the expected price of your product reasonable? Will the customer be satisfied and happy to pay?
– What is the strength of the competitive advantage of the product in the market?
– What is your chance to beat your competitors in the market?
Answering these specific questions requires a lot of information. You need to identify the rest of the business model more accurately, such as delivery channels, customer relations, cost, etc.
Asking these questions early can relieve some ideas and products early instead of wasting time on them.
Second, the initial sales statistics of the product are the real and specific indicators of the product-market fit.
Finally, The essence of the topic is that; the more the product is more customer-friendly, the greater its chances of success. This is why you need the product-market fit.
We suggest attending the Free Training course How to Build a Startup for more details on this subject and related topics.
- How To Describe Your Business Model?
- What Are The Business Model Metrics? How Do You Evaluate Any Business Model?
- What Is The Business Model Life Cycle?
- Customer Development Vs. Marketing
- 5 Reasons Why Customer Development Must Be Done By Founders?
- How Startup Works and How to Run Startup?
- When To Use the Business Model Canvas (Helpful Tips)