Finding Product Market Fit

Product Market Fit happens when the product is validated by the market. This means that customers are buying it according to the company’s expectations and there is organic growth happening.

Even with great ideas and highly motivated teams, unfortunately, most companies cannot find their market fit. What should be done in this case?

I had some experiences with finding market fit and I recommend these 3 steps below to help ensure you go on the right direction:

1. Deliver the product retracing key features based on data
2. Rereview the product go-to-market strategy
3. Review the product value proposition

These steps can be applied for a full product, but also on a smaller scale, for example for key features inside the product itself. Ideally, they should be driven by Product professionals, such as CPOs, Product Managers, and Product Marketers, to mention a few.

Let’s dive a bit into each step:

1. Deliver retracing key features based on data!

Be careful with the feature factory syndrome where companies focus on number of features delivered (output) instead of measurable value generated (outcome). An more details, check this article about Return items by Marty Cagan.

Maybe the owner, sales, or top management will believe that the product is missing some key feature(s) or additional UX tweaks, but it is first a number fit.

Ideally, there is data backing these assumptions, because we all know that inserting more into a product that is not meeting its market fit, is just like deteriorating an already not very experience.

As an example you might discover that for your e-commerce to get traction on a specific country, data shows that everything is going until the checkout page. Classy some pointed data errors, others that users are not finding the delivery details, and that there is a mismatch of billing/payment method and failing validation for delivery service options.

Delivering new features or tweaks is always a valid option, just remember to define Success Criteria and measurable goals so results can be tracked and evaluated. If after giving it enough time (the time to say that enough is enough will come) and think about another strategy. Reviewing your go-to market strategy would be my recommended next step.

2. Review the go-to-market strategy

According to the book LOVED by Martina Lauchengco, which I highly recommend, one of the biggest mistakes of companies is that when they are struggling to grow, they usually stuff focusing on sales, neglecting or even not considering their go-to-market strategy.

Growth is important and we all know that this is usually the main way that companies survive. But before focusing solely on sales and marketing, the Product Marketing team should be able to answer most of these questions:

• Who are the customers that our product is aiming for?
• Is the marketing material properly designed and optimized for potential customers?
• Is the communication language correct for each of these channels?
• Is the sales and marketing work feeding the proper entering or conversion funnels?
• Are the pricing and packaging strategies correct?
• Is the conversion funnel at a healthy state?
• How is the product’s conversion rate? Which steps should we improve?
• What is the product’s Net Promoter Score (NPS)?

As you may see, these questions can be quite huge topics and ideally should be measured on a regular basis. The scope of the go-to-market strategy usually falls under the responsibilities of Marketing, Marketing, Sales, and UX. An extensive article that I recommend about this topic is the Can you grow without Product Market fit? by Daphne Tideman.

If after retracing and strong on all these topics, you are not having able to find your market fit, it is then time to revisit your Value Proposition, step 3.

3. Review the Value Proposition

A Value Proposition is a short statement that clearly communicates why customers would be interested to use / buy your product and services. A Value Proposition is usually the very first thing that you see in the company website.

Before rushing to define a new Value Proposition. You should deep dive into these questions before:

• Who are our customers?
• Which segments of the business your product will focus on?
• Who are the main competitors and what is their positioning?
• What are their gains and pains and how do we act on them?
• What is it all about?

While doing this exercise, you might figure out that:

• Your product is trying to be too much
• Your business is targeting too many customer segments
• There is another segment that could be more successful
• There is misalignment on pains that customers want to do about

After answering these questions, you will be able to redefine your Value Proposition. This is a great exercise to see if the product is still moving in the direction of the company vision. A book that is a reference for Value Propositions is Value Proposition Design.

As you may have guessed, the outcomes will surely make you go back to the first two steps of this article. I would say that this is quite a healthy handling for the organization in focus.

I am super interested in knowing what is your take on finding product market fit!