PRODUCT/MARKET FIT
How to Find Product Market Fit by Harpal Singh
In a talk at ProductTank Dubai, Harpal Singh, a Product Consultant and Interim CPO, discusses the complex process of finding product/market fit (P/MF). He lays out a framework to understand and achieve P/MF.
P/MF Misconceptions
Many believe P/MF is a single state, but Harpal explains it’s actually a spectrum. Contrary to popular belief, the market should come before the product. You can lose P/MF after achieving it, and it might take years to find it initially. Product managers in startups also share responsibility in finding P/MF; it’s not just up to the founders.
The Startup Lifecycle
P/MF is often thought to apply only to startups because it’s confused with problem/solution fit. At the problem/solution stage, B2C companies typically have thousands of users, and B2B companies some high-paying customers, but their Customer Acquisition Cost (CAC) is high, Lifetime Value (LTV) is unknown, and product usage is inconsistent.
Once you move to the P/MF spectrum, B2C companies should have tens of thousands of users, and B2B companies tens of high-paying customers. At this stage, CAC is low, while LTV and product usage are high. Companies will then work within the spectrum to strengthen P/MF and move towards scaling.
The P/MF Flywheel
Harpal presents a framework for moving from problem/solution fit to P/MF:
1. Define Segmentation: Focus on a specific group rather than all users. For example, narrow down from general users of video conferencing software to tech teams using it for collaboration.
2. Shortlist Lead Customer Segment: This narrow group of users will likely want the same thing and can be reached through the same channel.
3. Hair-on-Fire Problem and Value Proposition: Identify a critical problem for your end-user through interviews. The significance of this problem will increase in challenging environments, like how video conferencing became crucial during the pandemic.
4. Validate Market Size: Ensure there is a market for your product, as it might not be what you initially thought or could be a different market altogether.
5. Discover Acquisition Channel: Design products for channels, not the other way around. Coordinate channels and distribution with sales and marketing for better chances of finding P/MF.
How to Measure P/MF
To measure P/MF, Harpal suggests questions like whether you are solving a crucial problem and retaining more than half of your existing users. The main takeaway is that P/MF is a spectrum, not a fixed point, and you should continuously aim to strengthen your position by addressing critical problems.
Enjoy More from ProductTank
ProductTanks are casual meetups organized by Mind the Product to bring together local product professionals and share insights. With over 200 cities hosting these events, there’s likely one near you. Explore local meetups, more content, news, and ways to get involved!