Product-market match (PMF) is a tough factor for startups. It’s that candy spot the place the wants of your goal market completely align with what your product is providing, and if you happen to’re a product supervisor at an early startup, it’s your job to assist your product discover that match.
Numerous startups assume they’ve PMF and attempt to enter the expansion section prematurely — normally due partially as a consequence of VC strain to develop or just not having a technique to measure and validate how robust your PMF is — which will be disastrous.
Since PMF normally reveals up as extra of a gradient slightly than a binary high quality (you may need a considerably of a weak PMF or a really robust PMF) it may be troublesome to really say with confidence that you just’ve discovered it.
On high of that, nobody appears to have a quantitative definition for how one can measure it. Till the 40% rule.
Sean Ellis is credited with popularizing the 40% rule. It states that if 40% or extra of your customers can be “very dissatisfied” if they might now not use your product, you then’ve achieved product-market match.
I’ve helped a whole lot of merchandise and firms construct a product from 0 to 1, however only a few individuals convey up the 40% rule as a purpose for the brand new product.
Even after I seek for “how one can discover product market match,” I discover obscure articles describing how you must perceive your goal persona, check prototypes, and so on., however nothing round how one can measure it.
Marc Andreessen describes PMF in his 2007 weblog publish:
“You possibly can all the time really feel when product/market match shouldn’t be occurring. The purchasers aren’t fairly getting worth out of the product, phrase of mouth isn’t spreading, utilization isn’t rising that quick, press critiques are sort of ‘blah,’ the gross sales cycle takes too lengthy, and many offers by no means shut.”
“And you’ll all the time really feel product/market match when it’s occurring. The purchasers are shopping for the product simply as quick as you may make it — or utilization is rising simply as quick as you’ll be able to add extra servers. Cash from prospects is piling up in your organization checking account. You’re hiring gross sales and buyer help employees as quick as you’ll be able to. Reporters are calling as a result of they’ve heard about your sizzling new factor they usually need to speak to you about it. You begin getting entrepreneur of the yr awards from Harvard Enterprise Faculty. Funding bankers are staking out your home.”
Illustrative, however obscure.
What Marc mentions above are all lagging indicators of PMF. However what if you happen to had a number one indicator of PMF? Is that this one thing you’ll be able to even measure? In the event you can measure it, are you able to systematically improve it?
In the event you merely need to measure whether or not you may have PMF, you are able to do that by sending out a easy survey to your current customers to see what number of of them can be “very dissatisfied” if they might now not use your product.
If greater than 40% of your customers categorize themselves as being tremendous dissatisfied in the event that they misplaced entry to your product, you’ve greater than possible achieved PMF.
Most articles I’ve learn on this matter simply cease there. They simply depend how many individuals can be very dissatisfied. However if you happen to learn a few of Rahul Vohra’s articles — the one who took the 40% rule and turned it right into a survey — he goes additional and makes use of the survey to really assist inform what options to placed on his product roadmap in a really systematic manner.
This was such a key perception for me, personally, as a result of it’s not such as you get PMF and also you’re completed. It is advisable to maintain incomes it and making it stronger. There are clearly no silver bullets in constructing a profitable product, but it surely’s necessary to construct repeatable techniques to duplicate success in a structured manner.
The survey consists of 4 questions and every query is basically a sort of filtering mechanism to in the end determine which buyer section’s suggestions you must prioritize when desirous about how one can enhance your product’s PMF.
- How would you’re feeling if you happen to may now not use [product]?
- Very dissatisfied
- Considerably dissatisfied
- Not dissatisfied in any respect
- I now not use this product
2. What kind of individuals would profit from [product]?
3. What’s the principle profit you obtain from [product]?
4. How can we enhance [product]?
Q1: How would you’re feeling if you happen to may now not use [product]?
By asking your prospects to charge their degree of disappointment within the first query, you’re in a position to section your buyer base and determine which prospects to concentrate on.
If we assume that your product is delivering in your core worth proposition and a buyer isn’t in any respect dissatisfied about not having the ability to use your product, then they in all probability aren’t your goal demographic.
The consumer’s reply to this query will decide which suggestions you must prioritize in questions 3 and 4.
Q2: What kind of individuals would profit from [product]?
The second query is pure gold as a result of your customers are describing themselves in their very own phrases, serving to you additional perceive how one can get extra customers in your goal persona.
Understanding your personal prospects by the lens wherein they see themselves could be a tremendous highly effective software. As Rahul says, “They’re basically writing your advertising and marketing copy and your touchdown web page for you.”
Q3: What’s the principle profit you obtain from [product]?
Within the third query, your customers inform you why they love your product. Rahul recommends throwing all of the responses in a phrase cloud to see what the first causes your customers love your product.
Most of your time could also be targeted on bettering your product, however equally necessary is knowing what your product already does properly in an effort to protect that.
This autumn: How can we enhance [product]?
Within the fourth query, in Rahul’s phrases, you’re basically asking customers what’s holding them again from loving your product much more. He additionally recommends placing the responses to this query in a phrase cloud to simply visualize the most typical ideas. This query is the place you’re sourcing suggestions about what to construct subsequent in your roadmap.
However must you take heed to suggestions from all of your customers?
Nope.
We should always prioritize suggestions from customers who resonate with the first worth proposition of your product.
Let’s use Rahul’s product, Superhuman, for instance. Superhuman is basically a premium electronic mail product whose major worth proposition is velocity. In query 3, we’re in search of customers who answered that the principle profit they obtain from the product is aligned with the core worth proposition — velocity.
So earlier than placing all of the quick type solutions in a phrase cloud and treating all suggestions equally, section your customers based mostly on how they answered query 1 and query 3 to seek out and prioritize your goal consumer persona.
If we assume your product is delivering in your core worth proposition however a consumer cites the principle worth they obtain from the product is one thing aside from your core worth prop, no matter their reply to how they might really feel if they might now not use the product, their suggestions in query 4 if you ask, “how can we enhance [product]?” shouldn’t be the primary precedence.
To ensure that us to construct a cohesive product expertise, we have to keep laser targeted on our goal persona. If we’re constructing a product who’s major worth prop is velocity of receiving/sending emails, what would occur to the product if we began constructing all of the options that different non-target personas needed? The product wouldn’t fail essentially, however the focus of the product would get diluted over time and weaken PMF.
If a buyer does determine that the principle profit they obtain out of your product is that it aligns with the core worth prop however they “wouldn’t be dissatisfied in any respect” if you happen to took the product away (okay, ouch), they is perhaps your goal buyer however they’re additionally in all probability going to be very troublesome/pricey to transform into one among your 1,000 true followers.
Now, a caveat right here, it’s not that you’d ignore this suggestions fully, however you must prioritize and perceive a very powerful buyer segments to take heed to when asking “how can we enhance [product]?”. Completely different prospects have completely different ranges of product-customer match.
The individuals who can be “very dissatisfied” if they might now not use your product are already offered in your product. Nice! They’re the people who’ve the strongest product-customer match. You need to take note of their suggestions in query 4, however they aren’t the highest precedence. They’re already in love together with your product. No matter what new characteristic you add, they’re largely going to nonetheless provide you with a excessive rating of “I’ll be very dissatisfied if I lose this product.”
If they aren’t your high precedence, then who’s?
The individuals who can be “considerably dissatisfied” in the event that they couldn’t use your product anymore and whose predominant profit was aligned to the core worth proposition! That is the place you must focus your consideration. They’re on the fence about loving your product, the core worth prop resonates with them and one thing small is simply holding them again. Hearken to what’s lacking for these of us, ship on it, and watch your PMF rating soar.
As you’ll be able to see, discovering product-market match is inextricably tied with discovering product-customer match. The higher you perceive who your goal buyer is, the extra targeted and disciplined you will be about who’s suggestions to take heed to and the way. This technique offers you extraordinarily tactical steps on how to do this.
By prioritizing suggestions from customers who resonate with the core worth proposition and who’re on the fence about falling in love together with your product, this technique supplies a leaping off level so that you can hone in on what product outcomes to provide first.
As product managers, we have to create suggestions loops for ourselves, however we additionally want a system about which suggestions to prioritize and which suggestions to politely put to the aspect. In that manner, this framework can also be helpful for merchandise who’ve already discovered PMF.
