Do you have enough product market fit to scale?
Bringing structure to an elusive concept
Product market fit is sought after and elusive at the same time. It’s the biggest topic that comes up when I work with product leaders in startups. I spend more time thinking about this than any other product topic.
The journey to good product market fit is uncertain. You can’t change that. You can have certainty in knowing where you are on that journey, and knowing the immediate next step on that journey. Giving you that certainty is the focus of this two part series.
This first post is focused on knowing whether you have enough product market fit to scale.
The second post in the series (coming soon) is about how to improve your product market fit by focusing on one thing.
Why does product market fit even matter?
Good product market fit means all the pieces of your business are linking together. When people hear about your product they’re excited to try it, once they try your product they continue to use it, and once they realise how helpful it is they are keen to help you improve your product. You’re confident that there are lots of people that will have this same positive journey through your product.
Good enough product market fit matters because you can get to work scaling.
Product market fit is a spectrum - it’s not binary. You’re looking for good enough.
You can scale without “enough” product market fit, and you might be doing that right now. You’ll know if you are because it will feel hard. Your sales team will struggle to land deals, your marketing will have a low conversion rate, your retention will be low. You’re likely feeling the heat from your investors. On an emotional level, you will feel the existential questions bubbling up more often than you’d like.
Getting good enough product market fit should be your singular focus - both for your company’s ability to scale and for your ability to enjoy the journey.
What is product market fit?
There are plenty of definitions or soundbites about product market fit out there, all the way from the ephemeral
“You can always feel product/market fit when it's happening”
— Marc Andreeseen
To the specific
“You have found product/market fit when you can repeatably acquire customers for a lower cost than what they are worth to you.”
— Elizabeth Yin
I’ve experimented with a lot of different definitions and thought about the most helpful way to define product market fit that helps you move forward.
My aim is to find a definition that’s comprehensive (includes every aspect that’s important) and as simple as possible (each aspect is needed to define PMF fully, so no redundancy).
My definition is as follows:
You’re solving an important, underserved problem that a lot of people have
You can articulate a problem that a lot of people or companies have*
That problem is currently underserved - other products aren’t good enough, there are no viable products, or you as a founder have a vision of how it could be solved much better
Your problem is important enough that people are motivated to try a new product
Your product is solving that problem well enough
Once they use your product, your solution is good enough that they continue to use it
*Note that it doesn’t need to be a lot of people to have product market fit, but most people will only want product market fit in a good (big) market.
This is brought to life by looking at my favourite coffee shop, a mile from where I live in the Peak District.
It’s located in the middle of lots of mountain bike routes, running routes and walking routes (good market of hungry people)
There was previously no coffee shop (underserved)
Hunger is important when you’re exercising (important enough)
The food options are exactly what you want when in the middle of a long bike ride - coffee, cakes, sandwiches. You can bring dogs and there are plenty of bike racks. (People now centre their activities around starting/finishing at the cafe)
They have amazing product market fit.
Getting specific about measuring PMF for your startup
There is not a single universal metric or set of metrics for product market fit. And please don’t try to find one. You will spend too much time trying to perfect a metric rather than making an honest assessment of where you are with the information you have.
You’re looking for evidence (quantitative and qualitative) towards the definition above:
You’re solving an important, underserved problem that a lot of people have
Your product is solving that problem well enough
I’ve included some ideas below along with a concrete example from incident. Incident is a slack powered incident management platform for fast growing tech companies. The co-founders are close friends of mine.
You’ll see that they use a variety of measures for each component.
Hopefully this example highlights that product market fit isn’t about hitting a single metric. It’s about consistent indicators that you’re (1) solving important, underserved problems for people & (2) your solution is good enough.
The goal is having good enough product market fit to scale. Good enough, unfortunately, is subjective. To reach a conclusion I recommend using the framework above, find some space to think and someone to bounce that thinking off. If you’re feeling stuck, the answer is probably finding someone to coach you and help you reflect. That person can be a co-founder, friend or external coach.
Incident (example above) are confident that they have good product market fit. I agree with them 🚀
Wrapping it all up
You need good enough product market fit to scale. It means all the pieces of your business are linking together.
Product market fit isn’t binary and there isn’t a single way to measure it. You’re looking at the information you have (quantitative and qualitative) and mapping them to the following definition.
You’re solving an important, underserved problem that a lot of people have
You can articulate a problem that a lot of people or companies have
That problem is currently underserved - other products aren’t good enough, there are no viable products or you as a founder have a vision of how it could be solved much better
Your problem is important enough that people are motivated to try a new product
Your product is solving that problem well enough
Once they use your product, your solution is good enough that they continue to use it
You can start measuring product market fit today and as you do more research and collect more data, your ability to measure it will improve. You make the decision on whether it’s good enough & give yourself the time, space and support to do that.
The second post in the series (coming soon!) is about how to improve your product market fit by focusing on one thing.