Your product is like a baby you give birth to. You create it, nurture it, make it product-market fit compliant, and expect it to do good when it steps outside the doorsteps of the organization. But, what if it still misses the mark?
Practically, every business moves strategically from the very start, i.e., research the market aggressively, find the existing gaps, identify the product’s dire need in the market, experiment, run MVPs, and there they are:
The product-market fit (market-need fit) falls right into place. The roller-coaster journey is illustrated below.
In simple words, the product is able to take advantage of the market opportunity and is able to hit the bulls’ eye. But, what if, yet again, the customers reject it outrightly, i.e., the demand-and sales metrics that should have elevated, takes a downturn. What then?
It would be heartbreaking. Isn’t it? And, thoughts like these will run down your head.
“What went wrong? I did adhere to the product-market fit criteria, so how could the acceptance go off-track? Is it pure luck or is it all simply jinxed?”
Well, it is time to buckle up and know that product-market fit is not enough!
A Metaphorical Reference
Tinder, one of the top-ranking dating apps, does the match-making stuff based on how well the profiles match based on the common likings and traits. Your matches are your “fits” because the software’s algorithm says so. But, is it always true? No, it simply isn’t!
What makes for a great match would be the compatibility and the chemistry that two people strike when they first meet. And, that compatibility might not come even after hundreds of right swipes.
The same rule applies to the product you create for your customers. The product might seem fit for the market, but its compatibility with the end-user is what decides its ultimate fate. It is one lesson that is sometimes learned the hard way, but once you broaden the perspective, you get a clear picture of the road leading to a products’ success.
We are exactly here for that, i.e., engineering a fool-proof product. With this piece of write-up, we’ll explain why finding the product-market fit is important but is not everything. The idea is to look beyond the “fit” to attract love for what you build.
What is Product-Market Fit?
In the words of Marc Andreesen, the person who first coined the term “product-market fit,”
“Product/market fit means being in a good market with a product that can satisfy that market.”
Layman’s answer to what is product-market fit, we can say that it is what fits the jigsaw puzzle when the product you build is sold by your customers itself. That is, they love the product so much that they recommend and market it to the people they interact with; whether online or offline.
“If you do build a great experience, customers tell each other about that. Word of mouth is powerful.” – Jeff Bezos
Contrarily, if enough people are not talking about your product, the product-market fit does not happen.
Product-Market Fit: How You do it?
This is where the product-market fit pyramid steps in. It starts with the target customers and ends at testing the MVPs for full-scale Product Development with them. The responses, in turn, decide whether your product-market fit analysis thrived or you need to start from zero again.
This was about product-market fit. In short, reducing the marketing efforts and sweat that goes into promoting the product, because your customers do that for you. However, there is a catch here! As stated above, the product-market fit is not everything that needs to be in place for a products’ success.
Let’s talk more about this.
Why Product-Market Fit is Not Enough? Finding Other Factors that Matter
Even if you put all your heart and soul into making a product, there is no guarantee that the product would appeal to the customers. Let us understand this with an example.
Agile Product Development is a step-by-step approach that follows a set approach: Requirement Analysis, Design, Development, Testing, deployment, and Review.
Though it is an ongoing process covered under each of the iterations, it is the set procedure. If your development team leaves any of these steps, do you think your product would be a success? Well, of course, not! In a similar way, if you keep obsessing about how to find product-market fit while boycotting the other elements, disappointment is inevitable.
Specifically, what are these other elements? Let’s have a look.
What Makes a Product Successful?
You create a product, half the puzzle solved! How you make it reach the masses and gain publicity is the other half that completes the puzzle.
Here’s the hack to win this game together.
Let’s discuss the three of these next-in-line elements that succeed product-market fit metrics, in detail.
Tying the 2 Fs’ Together – Function and Feeling
There are two dimensions that make for a product hit, i.e., Function & Feeling.
a) Function: This simply answers the question: How is your product different? What does it offer that makes it stand out from the rest? Does it offer a seamless user experience at every touchpoint? Does it give users what they expect of it?
It simply narrows down to the customer experience (CX) of the user and the UX design of your product website. If it is broken at any instance, you need to convert your occupation into a “mender of bad customer experiences.”
To address the concerns of these 27 percent- Remember that the product should solve the user problems and should make sure that its UX design is easy to navigate through. In short, they should feel powerful.
b) Feeling: This is where the human factor comes in. Like how does your product evokes the emotional quotient of the customers? How does it relate to the customers and their respective needs? How does the product touch the lives of people around?
In short, it is about whether or not the product connects with the users while striking the right chord in the first instance. And, that my friend, is called “emotional marketing.” When you make people feel positive, it equates to a win-win situation.
So, what do you think? Which feeling would your product evoke?
In the end, one thing is evident:
Positive Feeling + Seamless Functioning = Product-Market Love
The Cost of Ignoring the Unit-Economics
The biggest misconception of enterprises today is that if they manage to master product-market fit, the unit-economics fit will automatically fall in place.
But, that is not the route towards attracting economies at scale. In reality, product-market fit satisfies the business that their product has a reasonable demand, and unit-economics handles the lifetime value that your business will extract from a customer over what you spend on acquiring them.
For a business to be profitable, LTV should always be greater than CAC, i.e., LTV > CAC. It all looks confusing at first. So, let’s understand this in an easy way.
A brand spends a little money on every customer and they think that it will be recovered in the long run. However, the truth is quite the opposite. Your business is not in a monopoly, even if you think otherwise, you’ll soon be demystified. Because, when you hike up the product price in order to recover what you spent on the customers, the game totally changes.
Another competitor steps in that offer lower prices, thus customers shift loyalties. You caused disruption in the market, Good. You managed to maintain a monopoly initially, Good. But, never forget that new startups are constantly looking for opportunities and they might settle for a similar business model with a little bit of twist.
You could take the example of Uber. Here is the chain of events to explain how the unit economy affects your business.
- The idea of ride-sharing was so unique that it gave birth to a new buzzword altogether “uberisation.” And, they had a fair monopoly and a good customer-base owing to their affordable payments and free ride offers.
- The moment, Uber started to make it big, their prices started to surge-up. Of course, like any other business, it was their time to make some profits.
- But, then there comes their biggest competitor in the US, Lyft. The moment Uber rises its fare, people shift their loyalties to Lyft, and vice-versa.
- The result – The ride-hailing service Uber fails to make reasonable profits as the competitive wars and the customer to-and-fro loyalties tend to be the biggest roadblock.
This Google trend report clearly shows how Lyft and Uber enjoy equal popularity in the World Wide Web space.
Therefore, to make it all work, addressing the unit economics is the next step. This “Unit Economics in Practice” guide can help you get a clear understanding.
Marketing – Spreading Awareness is the Key to Selling
Product-market fit is about your product being in demand. But, to create that demand, the need is to first promote it and spread awareness around it. That is, how do you get potential customers to the top of the funnel and lead them to the bottom of the funnel.
An example of this is Spotify that rightly took advantage of the market dynamics that revolved around the demand for a music-sharing product. The dooming of Napster became their opportunity to shine. They went on to create the product that had its product-market fit in place, but they still had an essential task at hand, which is marketing their product. Else how would anyone get to know what the product offers?
To save you from that kind of failure, here are three marketing elements that you need to be aware of. If these are not positioned correctly, things are going to end abruptly.
a) Buyer Personas: Analyzing who you are targeting.
The biggest issue with businesses today is that they have a New Product Development framework that adheres to the product-market fit metrics, i.e, it is needed in the market, but they pitch the wrong people.
It is like inviting a friend to watch a rom-com when they only love thrillers. Even if they become convinced to join in, they would leave half-way or fall asleep by the interval. That is why; it becomes a prerequisite to talk to the right people and in a language that they can relate to. Knowing their everyday challenges and trying to talk about how your product could be their knight in shining armor can help.
b) Pain-Points: What are the biggest challenges of your target audience and how is your product going to address them.
You created a product that obviously implies that the user stories were incorporated and the pain points were addressed. But, the emphasis should be to highlight that one pain point that is the biggest challenge of your customers.
It is like finding your product’s best trait that kills the major pain point.
Another problem with the sales pitch happens when businesses try to boast about what their product can do, and fail at emphasizing how. Like, how does the product make their lives easier? Again it is about making customers feel delightful while offering them value in return.
c) Advantage: What makes your product stand out from the rest.
If your product causes market disruption, you are already unique. And, if your product is a tweak of an existing product, that tweak is your unique point. Yet, when marketing the product, organizations fail to realize that there is no point in beating around the bush and talk about things like:
“Our idea of doing things is unique.”
“We offer 24/7 support with spectacular service at affordable prices.”
“We will lead you to success, like nobody else.”
Such generalized pitching does not make you that unique after all, you know. Even if you did not see that coming, this is one bitter truth you ought to know. Try being more specific. Speak of things that cannot go unheard, like what your product actually does and how it addresses the pain points of the customers.
In the end, it is all about how you send out the message of your existence to your customers.
What we started with makes sense now. Product-market fit is not enough, there is much more that goes into attracting the right attention for your product.
You created a product, nurtured it, and it does good in the outside world. This happens when you go beyond analyzing the demand for your product and manage its functioning, feeling, unit economics, and of course, it’s marketing.
And, bingo! Victory will come your way in the form of customers who will love the product so much that they stick with it in good times and bad, and recommend it to every soul they meet. Wow! What a great feeling it is, isn’t it?