Navigating the path to Product Market Fit
Product-Market Fit (PMF) is a concrete milestone that every startup strives to achieve, remarks Oyin Solebo, Managing Director at Techstars Global Lagos, in her insightful fireside chat at Hub71. Understanding the essence of product market fit, effective ways to measure it as well as ways to pivot towards it can prove invaluable for the success of a startup.
The Essence of Product-Market Fit (PMF)
PMF is not a vague concept but rather a clearly defined state. It is characterized by a situation where a startup attracts customers without extensive marketing efforts, focusing on fulfilling customer demands. Through a systemic and structured approach that starts from the initial idea you can achieve PMF through an ongoing cycle of customer discovery, building, testing, learning, and repeating. Remember to ask yourself whether the product builds upon existing consumer behavior or if it requires a significant change in behavior
Team Size and Product-Market Fit
A common mistake frequently observed among start-ups is the premature expansion of their team or the hiring of individuals who are not adequately prepared for that stage of growth. Maintaining a lean team during the PMF cycle will help you overcome obstacles, gain valuable insights and pivot when needed.
Pivoting the Product-Market Fit
To develop a successful marketplace, you need to identify the key features of your product that users are utilizing. While conducting customer discovery interviews can be challenging and will require you to overcome biases, write down assumptions, and take nothing for granted, going through this exercise will help you ask the right questions and learn from feedback to improve your product.
Measuring Product-Market Fit
Product market fit is an important consideration for investors, therefore being able to measure and quantify it is important for any startup looking to grow and scale. Consider value and retention as metrics rather than market expansion. These can translate into monthly return revenue or average revenue paid, as well as the number of days customers return, subscribe, or cancel. Other measures can include the “tipping point”, Net Promoter Scores (NPS), or the Lifetime Value (LTV).
Achieving product-market fit is the holy grail for any startup or business. By following these key points and principles, you can increase your chances of not only surviving but thriving in the competitive landscape by delivering what customers truly want.
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