The market always wins
Market. It's a group of people who can reference one another. It's also the #1 reason startups fail. A good market redeems an okay product and mediocre team; a bad market kills a flawless product and stellar team. Market, more than any other factor, determines your chance of success.
This is why startup experts emphasize something called product-market fit (PMF). It's when people are eager to open their wallets for the value your product provides. It's also when you start seeing exponential growth and revenue. Product-market fit is the rising tide that lifts all your other ships. ⛵
Be the 1 in 5: Ingredients for product-market fit
Four out five startups fail to find product-market fit. The ones that do experience wild success. Here's what you need to be the 1 in 5:
Market: It can be a segment or a niche or a big group. The important thing is that it's a set of people who desperately need what you offer. Remember, the coolest product in the world is just a toy on the shelf if it's in a bad market.
Problem: We talked about this last week in idea validation. It's also key here. A painful problem is a foothold for your solution.
Value: To intrigue your market, you need something valuable. A value hypothesis is why you think customers will use and love your product. It's how you plan to solve the painful problem in a way that makes people say, "thank god you're here." Your hypothesis will probably be wrong, and it'll definitely change, but you need to start somewhere.
Flexibility: If you're listening to customer feedback, your product will evolve. If you're using the Lean Startup approach (you should), that'll happen quickly. Hold your original assumptions loosely and bend to the market.
Patience: Product-market fit takes a while to find. Once you find it, it's an ongoing process to keep it. You may or may not have aha! moments but you will have a long road of listening, iterations, and testing. Prepare for a hike and anticipate a party at the end of it. 🎉
Good Team: A good market can redeem an average team but a crap team will still hinder you. Your team is a key ingredient - build a good one. ⭐️
Elements to avoid
A good recipe turns into a pile of slop when you toss in bad ingredients. Avoid these additions.
Big Launches: This tactic rarely works. Focus your energy on small iterative launches as opposed to one big one. You can send cars into space once you've made your billions. 🚀
Premature Growth: Focusing on growth before you solidify value is a mistake. This approach may not sink you immediately but it'll sink you eventually. (As one founder pointed out, what good is a lot of dogs if they don't want your dog food? 🐶)
Arrogance: Over-confidence will detonate your startup. 💣 Have the humility to listen to customers, the flexibility to pivot your ideas, and the patience to iterate to product-market fit.
False Positives: It's easy to trick yourself into thinking you've achieved product-market fit. Be wary of things like idle interest and vague indicators that throw you off track. You'll know you've reached PMF when the market starts dragging you forward.
As a former startup, we get that finding product-market fit is hard. We're here to help with customer interviews, idea validation, and other steps on the road to PMF. Need an MVP to test your value hypothesis and gather feedback? We can help with that, too.
"You know you have fit if your product grows exponentially with no marketing. That is only possible if you have huge word of mouth. Word of mouth is only possible if you have delighted your customer."
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