How to Find Product-Market Fit?
For new Product Managers or people who do not work around products frequently, the term ‘Product-Market Fit’ can be particularly confusing and might not be fully understood.
The common adage used around Product-Market Fit is around ‘finding’ it - this can lead to questions about knowing when you have Product-Market Fit, when you do not have it and how you ultimately find Product-Market Fit.
What is Product-Market Fit?
Product-Market Fit is essentially taking a spot in a strong market with a product that can provide satisfaction and happiness for customers and consumers within the market. When you do achieve a Product-Market Fit, you will find that your product and business will receive boosted growth through organic word-of-mouth marketing that will occur.
More traction will often coincide with the success of the Product-Market Fit, and you must know the key indicators and signs when it comes to defining Product-Market Fit:
Big Organic Growth - If you find your product achieving both big sales numbers and a huge amount of engagement by users, that is a great sign of Product-Market Fit.
User Retention Boosts - If you can create a product that keeps over 40% of the user base, that is a great feature of Product-Market Fit.
Aim for a 3-to-1 Acquisition Cost - If you can keep the acquisition cost of a customer to three times less than the overall lifetime value of your product, that is a perfect sign of Product-Market Fit.
Over one-third of your customer base would respond negatively to your product being withdrawn - a clear sign of Product-Market fit.
How Do You Find Product-Market Fit?
Ultimately, the key to finding Product-Market Fit is how you maximize your product variations with the resources you have available. The more you can find out about your customer base, what they like and dislike about your product, and what they ultimately want, you can find your Product-Market Fit.
You should be working on product goals and understanding what the ultimate goal is around your product aside from the obvious ones. After this, you should build on product hypotheses which is something that allows you to collate all the ideas around your product in one place to create one ultimate idea behind your product.
Getting feedback from potential customers is perfect, as you can then work with them to build a product that they want, a huge step on the way to creating and finding Product-Market Fit.
Making small iterations and running small experiments thereafter allow you to progress towards a Product-Market Fit - remember, it is not about quickly finding perfection but that steady road to progress when you are trying to achieve Product-Market Fit.
The more feedback you receive and iterations you run around this, the better Product-Market Fit you will achieve. Knowing more about your customer base and what they respond to, the better product you will ultimately create. It can take many attempts, but you should be able to work around the response and the market itocreate a product that provides a great solution to customers.