Product/Market Fit is a relatively new and abstract term in the startup world, and it’s principles are quickly catching up to the business world. Because it’s a new term, it’s definition can often be misunderstood and overlapped, making it difficult to know when you have actually achieved it.
Marc Andreessen originally coined the term, and he defined it as follows: “Product/Market Fit means being in a good market with a product that can satisfy that market.” Sound straightforward, right? Not at all.
The definition of the term has changed a lot for me over the years. I used to think that only when users are enthusiastic and delighted by the use of the app or service, and most importantly, it solves a problem, is when I found the pot of gold at the end of the rainbow called Product/Market Fit.
To understand the term, let’s circle back to Andreessen’s vague definition and break it down to the three core components it outlines: Product, market, and fit.
It may seem intuitive to understand what those components mean, but by digging into the definition of each, it helped me view my business model in an entirely different way; changing my brand positioning and in result, increased client acquisition.
PMF is a useful mental model for the interplay between your brand, product, and your customers. And by understanding what it means, it will help you see the world differently, and inspire new ways to create value for your market.
What is a product? The product isn’t what you build; whether it’s an electronic device, an app, or the service you provide. A product is a result you deliver and sell to your user.
“People don’t buy quarter-inch drill bits, they buy quarter-inch holes.”
So what is the product? If I buy a bouquet from a local florist, the product isn’t the bouquet. The product is making someone’s day. It’s the result and outcome.
I co-founded Bserk, a sports supplements company that creates a natural and high-quality products to help people perform and live a healthy lifestyle while simplifying the somewhat confusing industry. The product we sell isn’t a fat burner, or a protein powder, or any other related supplements. It’s the toning of your physique. It’s losing those 5 lbs you’ve dreaded for months. Or simply help you recover so you can perform better. It’s an entirely different perspective on how we cater our messages. And it took us a while to get that.
Instead of positing ourselves as a “high-quality and natural supplements brand,” we can say that we’re in the business of making people feel more confident in their bodies, help athletes crush new PR’s, and so on. It focuses more on the user than the product. And it makes all the difference.
Market and customer development is the core skill to achieving product-market fit.
A market isn’t just the users. A market, according to Geoffrey Moore, is a set of actual or potential customers who have a common set of needs and wants, and who reference each other when making a buying decision. Therefore, a user doesn’t always have to be the buyer.
The user in the florist example isn’t the person who bought the bouquet; it’s their girlfriend, husband, mother, etc.
Giants like Facebook have nailed this concept. Facebook’s market isn’t the 1.3+ Billion DAU’s; it’s the advertisers! By understanding your market, it helps inform a clear understanding of your product and your unique selling proposition.
When I first started writing, I followed what the top agencies and designers were doing, that is, providing content and resources for an audience of fellow designers. I thought that the more I write about design and my process, the more clients I’ll generate. But to increase my client acquisition and keep the lights on at the studio, I had to take a hard look at my product and market. I provide design, branding, and strategy solutions to my clients. Therefore, to increase my brand awareness, I had to pivot a new approach.
I mostly sell my services to VP’s, and to the C-suite; people who are looking to lead and engage with their customers through design, branding, and commerce. I sell to organizations, not individuals. And surely not other fellow designers — the audience I was catering for all along.
You have a product/market fit when you have clearly identified the product and market of your organization, as explained above.
The product/market fit for Ali Adams was achieved when I clearly understood to whom I needed to write, it wasn’t for designers, it was for brands that are struggling with their branding, strategies, and marketing. When I started writing more relevant content to that market is when I started seeing an increase in client acquisition and higher word-of-mouth referrals — if it wasn’t for my services, it was for the content that I was writing, which became a part of my sales funnel.
Similarly, When we achieved PMF at Bserk, we weren’t just selling our supplements. In fact, our product was a small slice of a larger pie. Our product/market fit happened when we changed the brand positioning, harnessed our brand culture, and started catering for the right market. In the end, we had to sell the whole package — the entire company and its culture to each customer in order to achieve our PMF (and we’re still testing, and iterating new strategies as needed)
By understanding how your market buys, you can align your product delivery with the market’s purchasing mechanism. And if you start seeing results, then you can deploy different metrics to measure your PMF to be able to sustain it. (more on measuring PMF in later articles)
Product/market fit can have a lot of different interpretation, and it’s a useful model to help you understand your brand’s purpose and the reason for being. It helps validate your idea and provide a viable solution to your customers.
And to achieve PMF, you need to understand its components clearly. It may seem like a serendipity at times, but it’s a matter of following a consistent plan that focuses on testing and proving your strategy and market position times and times over.
I hope this article helped you find new ways to structure your brand’s positioning and mission as it did to mine. This article isn’t about achieving PMF necessary, but it’s about using it to define your brand’s reason for existence. I welcome your thoughts and feedback, so please like/comment if you found this article helpful! :)