Product-market fit is defined as "the degree to which a product satisfies a strong market demand." Remember, for instance, the cabbage patch craze of the 80s? People would almost DIE to get their hands on one.
When you achieve the ultimate product-market fit, what you have to offer can have the same effect; thousands of hungry hands stretch out to get a hold of your product. So much so that your company is barely able to keep up with demand.
Here’s how you can get the right product-market fit, so your SaaS startup can be a runaway hit.
The first step in finding your posse is to go much smaller and find your person. Without clearly identifying and defining your target customer, you’re just throwing spaghetti against the wall to see who takes to your product.
A much more proven and less costly approach is to design a solution for a real customer with a big, hairy problem; one that to them can be more frustrating than driving behind a slow driver in the fast lane.
When you've found your person, analyze everything you can; their needs, behaviours, economic status, family dynamics, hobbies, interests, and anything else you can discover that will help you create a customer persona that precisely describes your target client.
This is crucial to helping your team understand who they’re serving and designing the product for. It also becomes much easier to avoid scope creep and say no to feature requests which, while good ideas, don’t bring anything to the table for your target customer.
Once you've nailed your persona archetype, following your customer will take you to a much larger market segment of potential customers who also have the same problems and desperately want your solution.
And boom! You’ve found your posse. 🤯
The job of getting to know your customer doesn't stop with one person. By finding out all you can about your market segment, you can single out which needs are most important to address and which solutions will uniquely position yourself in the market to give you a leg up over the competition. What you glean will be part of your ingredients for your perfect product-market fit recipe.
Customer interviews are common ways to gather insights about your future customers. It's good to use a variety of mediums like phone conversations, Hangout chats, and in-person interviews to get the best picture.
It's best to have a set of questions beforehand that you can share with the customer. Topics to touch on include their background, pain points, how your product may help, and what other tools they might use in conjunction with your product.
Surveys can also be an excellent method to get answers from more people and create statistically significant data. Surfing forums where your target customers might hang out is another tool that can provide raw insights into the workings of your audience's mind.
It can be easy to scale up too fast because you think it’ll get you more customers. But the best approach is to grow alongside your product. Your company will avoid being choked by lack of cash flow or sinking all its money into a product where the business was mistaken about the market need.
Unfortunately, this happens quite frequently.
Image via CB Insights
Take Febreze, for example. It's a well-known, ubiquitous product now—but it flopped and was almost killed off in the beginning. P&G thought they hit a gold mine. All of their initial data said people wanted this accidental, odour-killing product they created.
What they didn’t realize was that people become desensitized to smells, and therefore never felt compelled to use Febreze. It was only when they completely shifted their marketing, added scents, and advertised it as the last step of the cleaning process, did it become a hit. Eventually, they also began saying in a by-the-way fashion that Febreze was great for removing odours too.
Once you have your prototype, it’s essential to keep asking questions and honing product-market fit with surveys and tests like the Sean Ellis test. Equally important is having a designated central feedback portal where it’s easy for both client and company to connect and collect feedback.
The Kaizen philosophy is one of continual improvement through minuscule actions and iterations that compound to bring about powerful transformations.
To continue growing and thriving, your product will need to evolve and change with the times. Many singers, for instance, quickly fade from memory. But others like Cher and Madonna have been able to captivate audiences for decades. And the reason is because of their ability to adjust their musical personas to a generation of new listeners.
When applied to your SaaS startup, this means making your product better and keeping an open discussion about why or why not your product is working. The same feedback tools that have served you in the past continue to be necessary. It's only the type of questions and the data you're looking for that changes.
Product-market fit is all about aligning the solution a customer desperately wants to a service you can provide. Continually innovating and meeting your market segment’s demand will ensure your SaaS startup achieves sustained growth. No matter where you are in the process, gathering and assessing feedback is crucial to ensuring you’re heading toward the right coordinates.
(Feature image via StockUnlimited)