Product market fit We can think of this as a stage of a product where the needs is fulfilled by the product and the product is generating some revenue to sustain the company survivability.
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| The Product-Market Fit Pyramid framework was created by Dan Olsen. |
Why is it important for the company?
In startup world due to majority of startup will have one product at their initial phase, product market fit also can be categorized as stage of the entire company, this can be indicator for the investor whether they want to invest or not, investor have a tendency to invest to company who already reach the product market fit.
How to achieve product market fit?
Achieving product-market fit, needs a lot of work and collaboration between multiple teams, In a normal company product-market-fit is the product team's responsibility, especially the Product Manager, but if in a small startup team product-market-fit is usually the CEO's responsibility or other top management like COO or Upper Product Guy (VP of Product, Head of Product, or else).
There several key factors to achieve product-market fit, the goal is to meet the demand and then monetize it here is an example:
- How fast do customers think before purchasing the product? (time to purchase)
- Do the existing customers try to promote your product to their friends or family? (NPS)
- Are they willing to pay some money for your product? (monetization)
To achieve this Product Manager will do multiple research to know what is the customer needs. what is their pain points and think how to solve it, here is several method Product Manager can use:
- User research, The Product Manager can try to reach the customer and ask what is their needs, what is their pain points, etc. If the customer is paid customer Product Manager can ask why they are willing to pay for the product. a. With User Research you can determine your customer, who they are, what is their demographics, occupation, gender, etc.
- Survey, Similar with User Research, the Product Manager can do some survey and send it over to the customer
- Value Preposition, form User Research and Survey, you can try to think your product value preposition, think about the uniqueness, and how to differentiate yourself from the rest of the market
- Minimum Viable Product (MVP), One of the method is MVP, Product Manager, PM can build simple apps or simple feature to check whether the customer try to use this or not, if there is a user who use it doesn’t matter whether they like it or not, they can be a valuable person to be interviewed or do User Research.
Post Product Market-Fit
Generally after product market fit reached, there will be several strategies can be done, usually, people will call this a growth phase, this phase is where the company tries to sell its product as much as possible, this can be done by:
- Increase marketing budget and effort (Ads, endorsement, collaboration, etc)
- Add more sales team to drive the sale
- Start looking for organic growth like Blog, Video Content, Articles, etc.
In product market fit, not only growth need to be done but other like trying to get a new business line by repeating a similar pattern as before, starting with research, MVP, launch, etc. so the company can have multiple sources of income.