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Product Market Fit (A Visual Guide)


Neville

Product market fit puzzle pieces

“The term product/market fit describes ‘the moment when a startup finally finds a widespread set of customers that resonate with its product’.”

--Eric Ries

 

What does it feel like when you've hit Product Market Fit?

"You can always feel product/market fit when it’s happening. 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. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.”

-- Marc Andreessen

Product market fit people buying

"gimme gimme gimme!!"

 

What it feels like when you have not hit Product Market Fit :(

“You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close.

-- Marc Andreessen

Fitting a square peg in a round hole

"It's like trying to fit a square peg in a round hole."

 

 

Generally the market pulls product out of the startup

“In a great market — a market with lots of real potential customers — the market pulls product out of the startup.”

-- Marc Andreessen

Pull product out of a startupPulling the product out of a startup.

For example, the gigantic messaging company Slack got it's start when the company was a video game called Glitch. The game wasn't all that popular, but it's messaging functionality between users was actually getting popular. They clearly saw this random "messaging" feature taking off, and then focused on that.

Ideally in the earliest stages of product development, the pull is happening organically (without any advertising spending).

 

 

You have to find the right wave to surf:

"When I operated an investment fund from 1995-1998, the technology leaders were Microsoft, IBM, AOL, and soon to be Yahoo. Google was just being formed (1998), Apple was still a PC company with single-digit market share, and Mark Zuckerberg was 13 years old. The point of this look back is that with historical context, one can see there is forever another wave. AOL was replaced by Yahoo, which was replaced by Google, who now splits time with Facebook, who is under pressure from SnapChat."

-- Chris Heivly

A pro surfer in a place with small waves will NEVER be able to surf big:

surfing a big market wave but no wave

The best surfer ever....but no big waves.

 

...but a doofus holding onto a piece of styrofoam can catch HUGE surf by catching the right wave!

Incompetent surfer but big wave

Horrible surfer....but he caught a big wave!

 

There's a bit of Serendipity, Luck, and "Just Keep Trying" involved

Serendipity: "The occurrence and development of events by chance in a happy or beneficial way."

“You often stumble into your product/market fit. Serendipity plays a role in finding product/market fit but the process to get to serendipity is incredibly consistent. What we do is teach that incredibly consistent process.”

-- Andy Rachleff

Success path serendipity

 

 

Hire slow before Product Market Fit.

Hire fast after Product Market Fit.

“In general, hiring before you get product/market fit slows you down, and hiring after you get product market fit speeds you up. Until you get product/market fit, you want to a) live as long as possible and b) iterate as quickly as possible.”

-- Sam Altman

If you get too enthusiastic about your product before you reach Product Market Fit, you risk having a ton of people to manage....and if you on a whim want to try something new, it's difficult:

boss instructing many people

Getting a large group of people to change what they're doing is hard.

 

However if you stay super lean before reaching Product Market Fit, you can change directions quickly since you only have a few people to manage:

boss instructing few people

Getting a small group of people to change direction is easy.

 

 

Your product must be supported by a Three Legged Stool:

"Build a stool with three legs: People, Markets, and Innovative products."

-- Tren Griffin

Product Market Fit Stool"It's so stable!"

 

Product Market Fit is totally obvious.....in retrospect

"The grand slam financial success of a new business like Google will seem obvious to some people as they recall the path of the business to success. The unfortunate reality is that financial return from investing is generated from understanding the hidden value before it is discovered, not afterward. No points are awarded in investing or business for storytelling after the fact."

-- Tren

This guy in 1998 for instance dismissed Google because there were already a ton of other search engines, and none of them made money. In fact until Google AdWords was released in 2000, no one thought Google could make any money:

"Ummmm there's already 35 search engines out there you dorks. How are you even gonna make money!?"

Google in 1998

 

But nowadays it's TOTALLY OBVIOUS to see how Google could make loads of money from a search engine. But it's easy to see all this in retrospect:

"I mean it was TOTALLY OBVIOUS how Google could make money."

Google Present Day

 

References for this article:

 

P.S. Tell me your story or sequence of events that led to your first product market fit.

(I'll start off the comments with my own story)......

 

P.P.S. I will be sending two of my favorite commenters free t-shirts to anywhere in the world for their stories!

shirts-prizes.png

P.P.P.S. The t-shirt winners from last weeks post were Niel Reichl and Jonathan Drake! Congrats you two for your comments, shirts are on the way!


User Feedback

Recommended Comments



Guest Neville Medhora

Posted

The first ever "Product Market Fit" I had was my senior year in high school with a site called HouseOfRave.

It was 2001 and the big "wave" at the time was eCommerce, which allowed people to buy stuff through a computer (this sounds dumb now, but it was pretty revolutionary back then)!

I settled on selling rave gear online, and opened up my virtual shop. Within a few weeks of it being up, someone placed an order for roughly $45! I didn't even know where this person came from, or how they found the site. A few days later, another order came in, then another, and another.....

I later realized most orders were coming from small towns where they couldn't purchase the light up and glow stuff HouseOfRave was selling. I had accidentally picked the right wave to surf at the time (eCommerce) as it was allowing people in smaller towns access to products not carried by the few stores nearby.

So without any real marketing knowledge, or any clue of what I was doing, I was bringing in a profit almost immediately....and that was my first Product Market Fit!

You can read more about HouseOfRave here if you want.

Anyone else got a story about a Product Market Fit??

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Guest Jasper Verelst

Posted

My first product fit happened only recently really. I set up a dropship business a few months ago, selling lumberjackshirts through Ali Express. When the store and social accounts were all set up, I started slowly (whenever I had some time) creatin awareness and branding. I especially use(d) Instagram and Pinterest for that. I started asking people to send me over there pictures wearing lumberjackshirts, and they did :-) and then a few days ago, I got me a sale when it wasn’t really intentional yet (jep!). So because I was using this lousy plugin I had to go to the website of AliExpress and look for the particular shirt that person had bought on my site and purchase it myself on Ali. So now I’m just gonna replace my Ali plugin to a more automated one and then I’m gonna go rocking on my lumberjackshirt business. So there you go, my story. Hope it kind of counts as a product/market fit. Feels like one though, but maybe I’m just over enthousiastic. Or maybe not. We’ll see. Thanks and good luck to me for that shirt !
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Guest C T Mitchell

Posted

I launched my first product in March 2015 - a short read mystery fiction book. I made it free in exchange for email addresses.

Short read 2 earned me $32. By month 3 I was earning $68 - not much and a little discouraged.

Month 4 my 4th short read hit #1 Amazon UK in category. My income exploded 10 fold.

Month 5 I boxed all 4 short reads and this went #1 also in category. My income trebled.

That was 30 months ago. I’ve now had 10x #1 in category, produced 25 products, built a mailing list of around 13,000+, have a 25 book publishing contest in India, a UK publisher and a US literary agent.

I’m making progress Neville. And I love reading your posts

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Guest Matt Dude

Posted

I'm that dude bouncing over failures and meh persistent as a SOB to hit that giant success.

I'm inspired by the concept that if I just keep putting myself out there, keeping an open mind and awareness, I'll find the market pull on something for me to run with.

Thanks Neville!

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Guest Joe wu

Posted

Hey Nev, i dont quite get the markets part

Of the 3 legged stall.

Great article

Joe

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Guest Dan Ceballos

Posted

Thanks Neville for the article.

As a service provider (Chiropractor), I’m working to identify my Ideal Client and target market to whom I do my best work and focus my marketing efforts.

Today’s blog post is a great reminder.

Thanks

Dan

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Guest Kelsey VanSleen

Posted

I'm just now getting started with our first e-commerce store (yay for couples rallying their talents!), so understanding Product Market Fit provides direction as we near our launch date. The 3-legged stool example truly is the barebones of making PMF happen. Focusing on networking and intense market research early on will lead to finding that innovative product, and consistency is the only way to grow!

Neville, you are a great teacher! Thanks for caring about us wanna-bes :)

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Neville how about one of your great posts on testing your idea/concept?
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Guest Tony Denham

Posted

Each Product Market Fit experience that my wife and I have had was serendipitous as mentioned in your article; Along with a side of persistence, patience, and providence.

One example for our www.ShaynaMade.com company is that when we first started, we set out to sell the lowest cost business cards to as many people possible. That didn't go to well, especially trying to compete with companies like V*&t@ Pr*&nt (dirty word :) had to bleep it, just being funny).

We shifted focus to high end business cards like Gold Foil business cards, Raised Gold Foil business cards, Holographic Foil business cards, and other unique business cards. And not only that but our target market had to change. No longer could we try to sell our high end business cards to any person or business (very few would buy them), but we DISCOVERED our audience was successful and aspiring entrepreneurs who need STAND OUT business cards that gives them an edge over their competition and actually generates sales and keeps customers coming back.

Since re-branding ShaynaMade as the go to, high end business card, source for successful entrepreneurs we've experienced the Product Market Fit as you described. We hired two employees so far and we're doing everything we can do to keep up with demand. It's almost time for another hire. We also realized that we waited a little too long to hire our first two employees. We were afraid to take the risk but now we know that the quicker we can replace ourselves, the quicker we can grow the business (AKA working on the business instead of in the business). We'll always be working in the biz to some extent, but you know what I mean.

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Guest Neville Medhora

Posted

Oh snap, that's an awesome story Tony, possibly shirt-worthy!

Also it's fortunate you hit Product Market Fit within a high-end niche rather than a cheap one, as you have higher paying clients that are better the bargain hunter clients.

Congrats Tony!

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Guest Neville Medhora

Posted

Hey Ron, that would be a different experiment :)

For now, this is just some guidelines for Product Market Fit I wanted to jot down, more will be added to this over time!

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Guest Neville Medhora

Posted

Best of luck on your launch Kelsey! Hopefully you hit Product Market Fit soon :-)
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Guest Neville Medhora

Posted

That's awesome Dan!

My buddy Jeff Langmaid is also a chiro who started a business helping chiros market to more people:

https://www.theevidencebasedchiropractor.com/

....I also have a weird habit of watching chiropractic videos on YouTube for some reason, and it seems like certain chiros definitely have a specific market like body builders and such.

However it seems almost everyone gets back/joint pain at sometime or another, so the market is wide :)

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Guest Neville Medhora

Posted

People = Have a great team of people.

Markets = Be in a big market with a huge wave behind it.

Innovative Products = Sell something that's newer and better.

Simple :)

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Guest Neville Medhora

Posted

Keep trying Matt! Sometimes it's a veryyyy long journey to any success.

See Bill Burr's take on how he thought he was going to be a loser forever:

Love that clip!

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Guest Neville Medhora

Posted

Holy cow, that's awesome CT! Possibly shirt-worthy stuff.

Do you have a blog post outline how many books you sell (Ryan Holiday did a really interesting post on how many books he sells in a week) and it was super interesting!

Congrats on your continued success :-)

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Guest Neville Medhora

Posted

Oh wow Jasper, looks like you definitely hit upon a little something in the Lumberjack Shirt world, congrats!
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Guest Shaf

Posted

At the beginning we were trying to sell our Waterless Valeting business (NO2H2O) to anyone and everyone at rock bottom prices, if you wanted a discount I was your guy! I had huge faith in what we were doing however I never quite felt like I had the credibility to match, until one day..

I was going for a regular haircut at my barbers (would be wrong to visit my butcher in this instance lol) and I see an amazing Porsche 911 turbo parked up outside, naturally I put on my business hat and began speaking to the owner - long story short I offered to clean his car for half price in the hope to gain a customer, surprisingly he called me two weeks later and naturally I was super hyped with the opportunity! We arrived and the gentleman said clean my Range Rover first then I'll think about the Porsche (credibility point in point) we did a great job on that and were given his blessing to move onto the Porsche. He was that happy with the results he literally opened his phone contacts to us, which was inevitably full of successful people with amazing cars!!

Fast forward a few months we now had the right images to show prospective clients.. NO MORE CREDIBILITY ISSUES, and we stopped giving out discounts as much in fact we've trebled our prices since!

Now we have the likes of Tesla knocking at the door wanting to pilot our services, loving the fact we clean vehicles without water (big contract looming).. happy days!!

Moral of the story is never under value your service/product and for heaven sake find the right clients that best fit your business.. not everyone will be your customer and that's ok!! and beyond all be consistent and persistent!!

thanks for the share Neville.. Serendipity is my new favourite word ;)

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Guest Victoria

Posted

I rather serendipitously (that’s one hell of a word to spell) found myself a niche in an already crowded market.

A lady hired me to help her re-design her diy’d website because she had organic traffic but not a lot of leads from it. She had no idea about wht growth/conversion optimization was so she never thought the website was the problem and was thinking of paying for traffic until she met me.

I’ve validated my offering twice already and am doing volunteer work for another client for portfolio work and social proof.

Great post Nevs! Love reading your work ✌🏼

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Guest Neville Medhora

Posted

That's awesome Victoria! If a niche is crowded, it often means there's a HUGE MARKET for it, so you might be on the right path.

I liked your website a lot, and think you should feature more case studies like you did the HR Girlfriends website, that's a great way for clients to see your process and what they can expect!

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Guest Neville Medhora

Posted

Whoa, that's awesome Shaf! Looks like you correctly went after high-end customers who don't mind paying higher prices, and often would RATHER pay for a high priced (but reliable) service than a cheap-o one.

Great story, possibly a shirt-worthy share :)

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Lovin' this visual post Neville! I rarely comment on blogs but you worked your magic per usual.

I found product market fit by accident while transitioning from one field (business analysis) into user experience. I started a blog called UXBeginner.com (which was totally inspired by WPBeginner.com, a great resource) to document my career journey. Within my social circle I became known as "the ux guy" and had friends constantly refer their friends to talk to me.

From this insight, I created my first course on wireframing. It made some sales (not a ton), but enough to validate the space. Then I created the Ultimate UX Portfolio which did well on Udemy. Now I'm experimenting with creating a high ticket offer. I'm still on my journey and need to properly learn digital marketing & copywriting, and look to your emails + blog for constant copy inspiration.

What's next? I'd love to do the same with the world of content strategy, publishing, and perhaps even a niche e-commerce store down the line. Really inspiring seeing all these stories here.

If anyone here has questions about creating a digital course and selling it to a niche audience, holla. Or if you like to get tacos in Los Angeles, also holla.

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Guest Neville Medhora

Posted

Hey Oz, well thanks for commenting :)

I know Syed who made WPBeginner.com, and it IS a pretty damn great site, I use it all the time when wrangling code on Wordpress.

Kind of cool you've already got a pretty popular site in the UX space. What you do KIND OF reminds me of this guy Xander Pollock at SprintDesigner.

He does 5 day "design sprints" with large companies like Google, and they pay him LOTS of money to finish a design with their teams.

You should check into something like that for UX, as a pro UX person could get a team to finish a project in a fraction of the time versus doing it all themselves.

Best of luck Oz, stay in touch!

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Guest Oz from UXBeginner.com

Posted

Evernoted Xander's site, great example of positioning + speaking to business needs (get X done in X days). Gonna munch on this.
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Guest Riley H.

Posted

The absolute hands-down worst presentation I ever saw had GIFs on every slide. Why? Because they're super distracting.

Also, it's hard to fool my boss into thinking i'm doing real work when there's stuff whizzing all over the screen.

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