The life of any startup can be divided into two parts — before product/ market fit and after product/market fit.” — Marc Andreessen
Having a Product-Market Fit has been defined as having a product able to satisfy a good market compellingly. Getting it is the first step towards having a successful venture, plus Ben Horowitz and Fred Wilson, believes that “Once you achieve product market fit, you can’t lose it.”
If you don’t achieve Product Market Fit, you can’t even gain a high-growth rate for your business, as this comes from giving more value to your users than they would expect, and/or by compellingly satisfying them.
You can’t have traction without this, as without understanding what is bringing value to your customers, you would never get people to share your product (Virality), or even potentially use effectively any other traction channel (Content Marketing, SEO, Paid, etc.)
In other words, as Sean Ellis points out in his blog post “The Startup Pyramid”; Startups require a solid foundation coming from a real product/market fit before progressing up the pyramid and scaling the business.
Not knowing if your product or service is providing what is treasured for your customers, is, of course, the first way to lose your time and money.
Then, today I will share with you four successful stories on how these four founders were able to achieve product market fit faster for their startup.
“When you are Before Product Market Fit, focus obsessively on achieve Product Market Fit. Do whatever is required to achieve product market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.” — Marc Andreessen
When Hayes Drumwright launched Trace3, he hasn’t just started and pushed his product with brutal force. He wanted to make sure that he was spending his time and money on something that was bringing real value to their customers.
Your job is to build a venture that will search for real value and “the truth” of what your client really needs. — Hayes Drumwright
He pre-sold his concept to five potential clients pre-selling his idea; this is how you can do the same.
Explain your concept to these potential customers, without trying to sell it too much. Then shut up. If they encourage you pursuing your idea, then ask them to pay for the product. Not to invest, but to pay for it.
Every answer except for spending real money means they don’t truly need your stuff.
Drumwright applied this concept also for his actual company, POP. He wanted to fail fast, but when he asked five clients to tell him why he shouldn’t do it, this resulted in three different companies giving him $35,000each based on the concept alone.
A similar approach was applied by Dmitry Dragilev of JustReachOut, a tool that helps startups build relationships with the press (super-interesting service for all the Growth Hackers out there.)
What Dragilev have done was to sell his brand new product idea before writing a single line of code, with the goal of getting at least ten people sincerely committed to being a customer.
For Dmitry, this meant they were up to buying the services for something more than $50 a month for the product.
One of the most interesting parts of the story is that when he get started doing this, he never sold his product and its features, while instead, he was just asking for feedback about the idea. People love to give feedback!
If you’re about to launch your product soon, you can’t miss Dmitry’s story of how he did get traction for JustReachOut, read it here! It’s full of tips. It will unmistakably make you save your valuable time.
Sean Ellis, founder of GrowthHackers.com and first marketing guy at Dropbox, has taken the abstract term Product-Market Fit and tried to have a precise metric to understand when you have achieved it.
He created a simple survey for a product, asking his current customers: “How would you feel if they could no longer use the product? –> Very disappointed, Somewhat disappointed, or Not disappointed.
In Ellis words, having at least 40% of the surveyed customers saying that they would be “very disappointed,” means that you achieved Product-Market Fit. Meaning, your product is a must-have for them in your market.
Admittedly this threshold is a bit arbitrary, but I defined it after comparing results across nearly 100 startups. Those that struggle for traction are always under 40%, while most that gain strong traction exceed 40%. Of course progressing beyond “early traction” requires that these users represent a large enough target market to build an interesting business.
If you haven’t reached product/market fit yet it is critical to keep your burn low and focus all resources on improving the percentage of users that say they would be very disappointed without your product.
Sometimes it is as simple as highlighting a more compelling attribute of your product — but often it requires significant product revisions or possibly even hitting the restart button on your vision.
Hope these three insightful stories would help you achieve a product market fit for your startup faster.
You have an interesting story about how you reached ProductMarket Fit for Your Startup? Are you struggling to achieve Product Market Fit? Comment below!
I am an entrepreneur with 9+ years of experience in Digital Marketing, coming from having built a group of online magazines in Italy, including one of the most important in the video games niche. I then launched and subsequently sold an e-learning related startup, and advised several startups and SMEs. I am currently enrolled in a MSc in Management at Bocconi University, and Chief Executive Officer at Growthband, a Growth Hacking Marketing agency.