Log in to like this post! Product-Market Fit: What It Is and How to Achieve It Jason Beres [Infragistics] / Wednesday, September 1, 2021 Product-market fit describes a scenario in which a company’s target customers are buying, using, and telling others about the company’s product in numbers large enough to sustain that product’s growth and profitability. According to entrepreneur and investor Marc Andreesen, who is often credited with developing the concept, product-market fit means finding a good market with a product capable of satisfying that market. Product-market fit is often applied to start-ups, but it also applies to established enterprises that need to consider their products and services from the perspective of product-market fit. In this blog we’ll look closer at what product-market fit is and why it’s an important concept if you are part of a digital product design team. Here’s what we’ll cover: What is product market fit? How to find product market fit? Product-market fit at Infragistics Adding the wow factor for startups Iterate to improve product-market fit How to measure product market fit? What is Product-Market Fit? As briefly mentioned, product-market fit is a process to help understand if a product concept has a viable market. The most successful examples reveal that products rarely achieve success quickly. It often requires an iterative process whereby product concepts and prototypes are built, and user tested with early customers, feedback is analyzed, and product designers, interaction designers and UX professionals work closely to fine-tune early prototypes to confirm a strong market interest. How do you know if you are achieving product-market fit? Marc Andreesen, who has overseen many early-stage companies, puts it this way: You can always feel when product-market fit isn’t happening.The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close. And you can always feel product-market fit when it’s happening.The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing, and they want to talk to you about it. How to Find Product-Market Fit The product-market fit diagram below was developed by Lean Startup, which has pioneered leading ideas around education on innovation, modern management and the Lean Startup methodology for the government, enterprise, and nonprofit sectors. The diagram shows the broad steps that can help achieve product-market fit. Source: Lean Product Playbook Determine your target customer Identify underserved customer needs Define your value proposition Specify your Minimum Viable Product (MVP) feature set Create your MVP prototype Test your MVP with customers Let’s look at these 6 steps in more detail. Determine your target customer.Who do you think will buy your offering? How will it meet their needs? You might not know exactly who your target customer is at first, but you can find out through market research. And by using that research to create customer personas, which are fictional versions of those real people, you can envision your target customer and create stuff for them. Identify underserved customer needs.It's hard to sell a product or service in a market full of existing solutions that people are already happy with. A better option is to find what they’re unhappy What pain does your target customer have? How can you help them solve it? Define your value proposition.How will your product meet your customer's needs better than any of the alternatives currently available? Will it offer better quality? A more affordable price? More exciting packaging? New services? Specify your Minimum Viable Product (MVP) feature set. Identify the minimum features you want to include on your first product rollout. Keep it simple and doable. Create your MVP prototype.Don’t worry about creating your full concept—instead, just create a bare-bones product. You can iterate on that after you get customer feedback. While you could build a live, working version of your MVP, it’s usually faster and more prudent to create an MVP prototype. A prototype is a representation of your product that you create without having to build your actual product. Prototypes can vary in fidelity—the level of detail to which they resemble the final product—and interactivity—the degree to which the user can interact with the prototype compared to the final product. For web and mobile products, medium-fidelity wireframes and high-fidelity mockups are frequently used. You can use a set of high-fidelity mockups of your product’s pages/screens to create a clickable/tappable prototype. Prototyping tools (such as Indigo.Design) make it easy to specify clickable/tappable hot spots and link them to other pages/screens. Such prototypes can usually simulate the user experience of the final product with enough fidelity and interactivity to obtain valuable feedback from customers. Prototypes are a powerful way to look before you leap. Test your MVP with customers.Show your product to a select group of your potential customers. Get feedback from customers. Let them learn about it and try it out for themselves. Ask them what they like about it and what they don't. What would they prefer to see instead? Stay open and flexible to feedback so you can revise your idea to accurately fit your customers’ wants and needs. You can choose multiple methods for user testing including onsite testing or remote user testing (or virtual testing). Product-Market Fit at Infragistics At Infragistics, we achieve product-market fit on our products through extensive iterations working closely with our customers. Since we are software developers, we never consider our product “finished” — we continuously update, add features or components, and fix bugs. All based on customer feedback. The more direct customer feedback you incorporate, the more product fit you will see. Sometimes we release major updates to our Ignite UI for Angular product just days after the official Google release. And we know our target customers inside and out: developers. We’ve been working with them for 30+ years. And developers want to get their hands on our products as soon as they can and they give us plenty of feedback, whether through GitHub or our live support or even directly to me through my email which I include on many of my blogs. With our newest product called App Builder, we’ve been making progress towards product-market fit. We know most of our developer customers continue to use legacy .NET platforms like Windows Forms and WPF. Many of them want to upgrade to newer, modern frameworks such as Angular, Blazor or React, but many lack the skillset for web development. The power of App Builder is that it’s a single design-to-code platform with tools for each persona on a digital product team. UX / UI designers can directly import their designs from Sketch, Figma, or Adobe XD into App Builder, handing them off to the development team. This removes an error-prone and costly phase in the product development process. UX Researchers, product managers, or UI designers can perform virtual, remote, and unmoderated user testing, ensuring stakeholders are included in the iterative design process. Developers can create complex screen designs, layouts, and page navigation in a web-based WYSIWYG. These are the biggest problems for developers moving from desktop to web. Once designers create a prototype and it has gone through user testing, developers see all the design specs as actual components, not vector images. While we’ve offered tutorials and webinars on making the desktop-to-modern-web transition, through trial and error, we’ve refined our platform to help these developers make the migration. App Builder eliminates the need for developers to immediately become experts in web design and layout. Any developer can use App Builder to cobble together real-world apps and real code very quickly. The ability to get something meaningful done fast is what drives confidence in moving into more complex areas of the product. This is the market fit approach we are taking, and it’s working. Adding the Wow Factor for Startups App Builder is ideal for startups who are trying to create a product-market fit and have limited resources because it combines multiple tools in one platform, including prototyping, user testing, app building and code generation. With built-in functionalities such as drag and drop, a library with app templates to help designers get started quickly, a toolbox of components, and the ability to see real live code while designing allows faster app building at lower cost. Also, at any time, developers can output the design as working Angular code and easily plug it into a website to show potential customers and validate the product. Showing potential customers a real running app with interactions, screen displays, and live code creates the “wow” factor — which is just not possible with a prototype. And which would you prefer when you are pitching your idea in front of investors? Iterate to Improve Product-Market Fit The Lean Product Process is an iterative process. After analyzing the customer feedback in step 6, you want to revise your hypotheses based on what you learned and loop back to an earlier step in the process. The feedback will determine which step you should return to next. If you only need to improve your UX design, then you can just go back to step 5. But if your hypotheses about the feature set, value proposition, underserved customer needs, or target customer need to change, then you would return to the earliest step that requires revision and proceed from there. In each iteration through the process, you will end up revising your MVP prototype, which you test again with a new wave of target customers. From one iteration to the next, you hope to see an increase in positive feedback from customers and a decrease in negative feedback. You may find that you just can’t seem to make much progress despite trying several iterations. If that happens, you should take a step back and revisit your hypotheses. You may conclude that in order to achieve higher levels of product-market fit, you need to pivot (change one or more of your major hypotheses). How to Measure Product-Market Fit Measuring product-market fit isn’t an exact science, but there are ways to assess whether you’re on track: How quickly do customers make up their minds about a purchase? Are reviewers mentioning your product to family, friends, or social media connections? What is your customer retention rate? Over a week, a month, and 6 months? What are your daily active users? Are customers interacting with your marketing efforts? How many customers have unsubscribed or stopped using your product? All of these are useful, data-based indicators of how well your product is finding its way into the marketplace. You can use this information to improve, adapt, and market your products.