How to achieve product-market fit for your business
In the early stages of business, achieving product-market fit is the single key to unlocking growth.
Product-market fit - or PMF* - enables you to increase sales and the profitability of your company.
What is product-market fit though? How do you achieve it? And when will you know that you have achieved it?
Read on for our no-nonsense guide to the all-important step to go from startup to scale-up:
What is product-market fit?
Originally coined by Marc Andreessen, "product-market fit" is when you have achieved a product that satisfies the market.
When a company has product-market fit, their customers are buying from you AND telling others about you - ideally in numbers that are large enough to sustain the product's growth and profitability.
For example: if your product is an app that sold pre-loved luxury goods, that would mean you need to find an audience within the right market that would want to download your app, buy your goods, and then tell their friends how amazing your app is. You then want your customer's friends to use your app and get hooked on your product that satisfies their demands. So that they tell their friends, and on the cycle goes.
The result of this is that your app enjoys continued growth in a healthy (read: profitable) way. Why? Ultimately because your repeat customers and your new customers are downloading your app at £0 CPA.*
There is a genuine demand for your product because you have positioned it well within the right market.
The above diagram, created by Dan Olsen, illustrates the product-market fit framework - showing how and what needs to come together for a good product/market fit.
Often a defining moment in a company's lifetime, achieving product-market fit can be the difference between cute startup status to serious scale-up.
Alex Schutz, Chief Marketing Officer and VP of Analytics at Meta believes that you can divide a start-up and scale-up into two life stages:
BPMF - Before product-market fit
APMF - After product-market fit
How to achieve product-market fit?
Identify a gap in the market; test consumer demand; work tirelessly to develop a product or service that they could not live without, and finally; remove as much friction for your customers as you possibly can. This can be anything from price point and availability, to the number of clicks to sign up on your website or payment options offered.
Make your business desirable for them, not for you, and make it easy for them to say YES!
Evolve or die. Blackberry died on 3rd Jan 2022 because it refused to put its customers first and actually pay attention to what they wanted. They held on to their QWERTY keyboard for dear life that, as Apple reined, got more and more embarrassing. (Read more about the rise and fall of the tech giants, and what we can learn from them here).
In marketing, the focus is on your value proposition.
What are your customer's jobs to be done, and how are you helping them to solve them? What are your customer's pain points, and how do you relieve them? And beyond the hygiene levels, what can you do to add value, to make them look or feel even better? To help them come back for more, and tell their friends?
Bloom's signature brand strategy package includes a hands-on, virtual, 90-min team workshop dedicated to fleshing out and clarifying your core value proposition. Get in touch to find out more.
When you will know that you have achieved product-market fit?
Only a handful of incredibly lucky founders can skip the early pains of trying to achieve product-market fit. The below description of what it feels like to NOT have product-market fit may hit home a little too hard with our entrepreneurial readers:
“You can always feel when product/market fit is not 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."
This is from Marc Andreessen's most cited blog post on the subject, via Rahul Vohra of Superhuman. Sound familiar?
But once you find the right key to unlock the right door, and you hear that satisfying click with the turn before finally pushing the door wide open, the feeling of product-market fit will wash unequivocally all over you.
You start to see your *dream* customers walk through the door, and consistently. You start to get attention from the right people, with press and investors and talent calling out to you, instead of you doing all the chasing. Everything just starts to feel a little clearer, a little easier, and quite a lot more comfortable.
If you need help achieving product-market fit, perhaps you need a fractional CMO in your back pocket with 'The 20%' advisory service, affordable for early-stage startups. Perhaps you need to validate your hypothesis through testing - like social advertising campaigns or performance marketing.
Or, if you're confident you've now achieved product-market fit (congrats!) and need a refreshing, expert, practical marketing team to supercharge your growth, Bloom is the agency to call.
Schedule a no-obligation 30-minute chat directly here.
*Marketing acronyms got you going WTF? We get it, that's why we created the ultimate glossary here. (You can thank us later!)