Solving For Product/Market Fit

In 2007, Marc Andreesen defined Product Market Fit as: “Being in a good market with a product that can satisfy that market.”

And said:

“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, 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.”

Then, Sean Ellis gave us a metric to evaluate our product/market fit by asking users, “How would you feel if you could no longer use the product?” and measuring the percentage who answered “very disappointed.” If more than 40% of your users answer “very disappointed,” you have product/market fit.

Although these definitions and metrics are valuable, they feel like a black box. Either you have it, or you don’t — and the problem is that it’s usually too late by the time you start to figure out that you don’t have PMF.

Here are nine components that I think can shed some light on the PMF black box and help us better think and structure our approach.

🚨 Problem/Market fit: Does our target market have a specific problem that needs solving? If they don’t, we must look for a different market or find a different problem.

🏥 Solution/Market fit: Does how we intend to solve the problem fit the problem that our target market has? Is our solution a pain killer or a vitamin? If the latter, then keep looking.

📈 TAM/Market fit: Is there a large enough addressable market with the problem we seek to address?

🙍‍♂️ Buyer-User/market fit: Is the person buying the product the same one who will be using it? If there’s a customer and a buyer, does our solution fit their problems?

✉️ Message/Market fit: Does how we communicate our product value proposition resonate with our target market, buyers, and users?

🏦 Business Model (Price)/Market fit: Does our plan for monetizing the solution fit our target market? Can our target market afford the solution?

⚛️ Technology/Market fit: Do we have all the tools, knowledge, and technology to develop our product? Are there any missing technologies or challenges we must solve first(e.g., patents)?

⌛️ Timing/Market fit: Is now the right time to address this particular problem with this specific solution for this individual market? Are we early, mid-stage or late to the market?

👫 Team/Market fit: Do we have the right team in place? Do we have domain knowledge and industry expertise to attack this particular problem for this specific market with our proposed solution?

As you can see, there isn’t one Market fit we need to solve for but multiple ones. The chances of successfully achieving Product/Market Fit are driven by how many of these variables we can solve effectively.

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👉 Diego Schmunis for more insightful content