The Repeatable Recipe for Finding Product/Market Fit
There are plenty of great blog posts that describe what it's like to find Product/Market Fit.
Marc Andreessen wrote in 2007 that "Product/market fit means being in a good market with a product that can satisfy that market. The customers are buying the product just as fast as you can make it -- or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You're hiring sales and customer support staff as fast as you can."
Y Combinator CEO Michael Seibel similarly wrote in 2018 that "you have reached product/market fit when you are overwhelmed with usage—usually to the point where you can’t even make major changes to your product because you are swamped just keeping it up and running."
These quotes paint vivid descriptions of the symptoms of already having Product/Market Fit — or at least the point where it takes hold of your startup — but a gaping void exists in the literature describing the steps that lead to Product/Market Fit.
When it comes to finding Product/Market Fit, Marc Andreessen says "Do whatever is required to get to product/market fit." You'll struggle to find anything more prescriptive because it doesn't exist. When people write about Product/Market Fit, they describe the things that happen after you've already found it.
This post is different.
By studying successful startups, best practice frameworks and founders' experiences, we are piecing together a step-by-step recipe to enable product builders to find Product/Market Fit over and over again.
Why over and over again? Not only do the targets for Product/Market Fit shift constantly as you grow; each new feature, use case or customer segment you expand to require the right combination of ingredients to catalyze compounding organic adoption.
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Before exploring that combination of ingredients, we must first clarify what Product/Market Fit is and, more importantly, what it's not.
Growth does not mean Product/Market Fit. Compounding or exponential growth does not even mean Product/Market Fit. As we will later discuss, growth is generally validation that you've reached the "pull point" — your product mix meets an underserved market need, creating organic traction. Reaching this pull point is the essential first step in finding Product/Market Fit, rather than the end destination.
A startup reaches Product/Market Fit once they have created a playbook for repeatable, scalable and profitable growth (to borrow from David Skok's "9 Steps" model). 'Profitable' is commonly the missing piece — the money a startup spends acquiring each new customer must result in triple that amount in lifetime customer value before they can turn the exponential growth engine on (according to Hubspot CEO Brian Halligan).
I suspect most of you reading this post have not reached your pull point yet and therefore shouldn't even be worried about building a playbook for exponential growth. Instead of diving deeper, let’s look at the ingredients needed to create organic traction and reach the essential first step in finding Product/Market Fit; aka The Pull Point.
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If I were to generically describe a startup that recently found organic traction, it would like sound something like, "Their product offers the best solution to a big problem felt by that group of people."
This unassuming sentence provides us with the four ingredients needed to reach the pull point. Here it is again with those ingredients listed, "Their product offers the best solution (proposition) to a big problem felt by that group of people (persona)."
Individual words in this sentence tell us a lot about the relationship between these ingredients. For instance, the word big tells us that this problem is only important because of the way this group of people experiences it. The persona defines the importance of the problem.
This logic allows us to place the ingredients in a set order: persona → problem → proposition → product. No ingredient in this recipe can be decided upon before its predecessor. That is why it is a recipe and not just a 'mix' — the order of decisions in a 'mix' is arbitrary, but in a recipe it's essential. You can't put a cake in the oven if you haven't cracked the eggs yet :)
This order of decisions also means that each time we choose an ingredient, the range of options available for our next decision gets smaller. For example, we could decide to tackle the problem of lawn maintenance with our startup, but if we decide to focus on apartment owners as our persona, then lawn maintenance is no longer within our set of problems to choose from.
With these two ideas in mind — that there is a set order to the decisions that go into building a product and that each decision limits the set of future decisions we can make — we can visualize the challenge of building a startup like this:
Many important ingredients are missing from this diagram. That's because you don't need any of them to find your pull point. You don't need a thorough plan for pricing, distribution or expansion. Making the right decisions on these ingredients will help you leverage initial traction more effectively when you do reach your pull point, but they are qualifiers required upfront.
Your aim as a product builder is to find the minimum set of ingredients that will validate your ability to meet a market need. Reaching the pull point is your initial validation. The other ingredients make up the aforementioned playbook — together they enable you to build a repeatable, scalable, profitable engine for exponential growth (pour money in, get >3x money out). They are Model (revenue model), Medium (product distribution and customer acquisition strategy), and Market (total addressable market and expansion strategy).
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In the last 18 months, we've made almost every conceivable mistake an early-stage startup can make in search of our pull point. Over the coming weeks, we'll explore every one of those pitfalls along with step-by-step guides to help you avoid making the same mistakes we did.
As those articles are released, we'll update our list below. Until then, subscribe to the OpinionX newsletter to receive each new post as soon as it goes live:
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The Startup Bowtie: The Counterintuitive Guide To Finding Product/Market Fit (Again And Again)
Contents
Listed in order. Unlinked posts have not been published yet → subscribe for updates
Product/Market Fit
What is Product/Market Fit and how to find it → this post
The three stages of Product/Market Fit (with examples)
Signals that you have reached each stage of Product/Market Fit
Persona
Why every startup needs a homogenous, niche segment to focus on initially
The target customer segment you choose determines your entire product roadmap
How to find a homogenous target customer segment
How we operationally tested market segments using The Mom Test method (case study)
Decision-Maker vs End-User: Who Matters More?
How to find target customers to talk to
Understanding the difference between users and customers
Using Customer Problem Stack Ranking to identify your target customer
Problem
The biggest companies started by solving one burning problem really well
How to identify problems worth solving as a startup
Why motivational quotes like "ideas are worthless" are all bullshit
How to ask good questions for idea validation that don't lead to biased answers
Using Customer Problem Stack Ranking to identify your customers' biggest problems
Proposition
What is a startup value proposition and how to write one
How to differentiate your product in a competitive market
How to deal with competition
Why you need to mirror your customer's language to nail your proposition
How to test multiple product value proposition ideas
Why product categories are important to customers and why you shouldn't invent a new one
The difference between a value proposition and an impact proposition
Why sales, marketing and go-to-market aren't to blame for your lack of traction
10 proposition pitfalls that kill early-stage products
The most common startup landing page mistakes to avoid
Using Customer Problem Stack Ranking to write a proposition that converts
Product template galleries and the impact of 'optionality tax'
Using Customer Problem Stack Ranking to find your product's killer use case
Product
Defining the scope of your product before you've found traction
What are 'hygiene features' and how do I identify them?
Do I need to manage a product roadmap as an early-stage startup?
How do I decide which features to prioritize and build next?
Top prioritization methods and frameworks for product management
What to do when your team disagrees on what to build next
Why you shouldn't listen to feature suggestions from your users
Why you need to talk to your end-users every single week
What to do when users are all asking for different things?
Using Customer Problem Stack Ranking to continuously prioritize your product roadmap
The importance of usability testing and why you they shouldn’t be used to sell stuff
Stop trying to reinvent onboarding. No really, stop it.
How to build a customer education plan
Why you need to split up customer churn to understand why you're losing customers
Pull
Signs you've reached the 'Pull Point' in your Product/Market Fit journey
Interview with [TBC] founder on finding their 'Pull Point'
What happens after you find organic pull? (rounding the recipe and building the playbook)
// Beyond this point is stuff we're figuring out right now at OpinionX. As we make the mistakes ourselves and learn how this stuff works, we'll add more articles and case studies to these topics.
Model
Why your product price determines your entire go-to-market strategy
Getting users to your "aha!" moment as fast as possible
What is product-led growth and why is it changing the world of startups?
Medium
When to turn your ad-hoc acquisition into a distribution strategy
Why the founding team have to build the customer acquisition strategy instead of salespeople
What is an 'entry signal' and how to find yours
Market
Finding Product/Market Fit Again and Again — why every new product, use case and target segment uses the same Startup Bowtie recipe.
Turning your niche starting point into a giant market opportunity that's attractive to investors
Why the most successful startup expansion stories are initially powered by one product engine
Using Customer Problem Stack Ranking to find your next target customer segment (horizontal expansion)
Using Customer Problem Stack Ranking to find your next product use case (vertical expansion)
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