Are you part of a startup or business that is launching a new product or service? Hold your horses! Before growing a business, one of the most important things to have is a Product/Market fit.
In this blog I explain to you why this is true and how you can make sure that you found Product/Market fit before growth hacking your business to new heights.
Find answers to the following:
- What is Product/Market fit?
- How do you find Product/Market fit?
- When isn’t there Product/Market fit?
- Why you need to find Product/Market fit before growth hacking.
What is Product/Market fit?
Product/Market fit refers to the phenomenon where a new product or company has found an audience that loves their products almost as much as they do themselves. This means people are buying into your idea in droves without too many marketing efforts on part of the business itself. This creation of this concept is often credited towards Marc Andreesen.
Finding this level of Product Market fit can be incredibly difficult for startups because when there isn’t enough traction yet it’s hard to really know if you actually hit something good until after days, weeks or even months later when all the data starts coming in about who bought it and what they think of it.
How do you find Product/Market fit?
Product/Market fit is a necessary but not sufficient condition for building a sustainable business, and growth hacking fails to respect this distinction at the risk of jeopardizing the whole venture. In other words, product/market fit doesn’t mean you can just hack your way into growing your business because that only works in the short term – unless you actually have what it takes to scale your company by doing things right from day one.
- Define the goals of your product
- Setup the hypotheses
- Put your product out there
- Analyse the data & get feedback from your audience
Not seeing clear signals that you have found Product/Market fit? Do the following:
- Iterate: use the feedback to improve your product
- Start the cycle again.
Which signals to look out for
To get Product/Market fit, make sure to keep a close eye on the following signals.
1. 40% of your customers would hate it if your product is removed from the market.
When asking for feedback, ask your audience:
How disappointed would you be if this product stopped existing?
Is 4 out of 10 people answer to be very disappointed, you are heading in the right direction.
2. Exponential organic growth
Is your product showing high conversion and engagement? Good! You are moving into the right direction. Also, is there a lot of traffic coming from direct or referral sources? This could indicate that people are more than happy to talk about your product.
When isn't there a Product/Market fit?
When is it time to rethink what your product is set out to do? Be aware of not spending too much time on something that doesn’t work. Watch out for the following:
- Your free tier is not being used
- Users leave straight after a trial
- No clear indications of who your audience is and where they come from.
- Poor organic growth
Make sure to clearly define what metrics should be reached in order to say yah or nay about your product.
Why you need to find Product/Market fit before growth hacking
One reason why Product Market Fit should be sought after before trying to build traction via marketing tactics such as Growth Hacking is because Product/Market Fit means people will buy regardless so there’s no need for spending money on acquisition channels like paid advertising or SEO until you know how good your Product Market Fit is.
You don’t want to growth hack something that can’t be growth hacked right?
Product market fit isn’t the end game, but it does mean that you’re onto something good and customers actually want what you have to offer – which should be your goal before trying to grow too quickly.
However, once Product Market Fit has been reached by a company, growth hacking can take over because there are typically easier ways of acquiring new users like SEO or paid marketing channels (such as Google Ads, Bing and LinkedIn) rather than having people actually seek out their products themselves on Google or through word of mouth from friends and family.
Key takeaways: Customer first
In conclusion Product/Market fit is all about finding an audience who love your product so much they will buy in droves without immediately spending money on acquisition channels such as paid advertising or SEO.
Product Market fit is a necessary but not sufficient condition for building a sustainable business. It is the foundation before starting to growth hack your product to new heights.