👋 Hi, I’m James. Thanks for checking out Building Momentum: a newsletter to help startup founders and marketers accelerate SaaS growth through product marketing.
Getting to product/market fit will make or break your business. Defined as the point where your product or service satisfies the needs and wants of a particular market, it’s tricky to achieve, difficult to measure, and doesn’t actually mean you’re more likely to be successful.
But, as with everything, it’s a proxy for being on the right track – for building momentum.
There are a few signs that you’ve achieved product/market fit:
- Strong demand – a “pull” from the market
- High retention and engagement
- Positive word-of-mouth – customers advocate for you without prompt
- High Net Promoter Score (NPS)
- The “Sean Ellis Question” – 40% or more customers say they would be disappointed if your product/service was not available
There’s a ton of content out there on common product/market fit mistakes – things like focusing too much on features, building in a vacuum of customer insight, and building a proposition that people like, but nobody will pay for.
But what’s not shared often are the human mistakes that we can make on the journey to find product-market fit. I’ve seen all of these mistakes happen, multiple times, over the last ~12 years – and made most of them too.
If you’re at an early-stage startup, or building a new product from 0-1, keep these in mind.
In this post:
Product or market or fit evolves organically – without a clear decision
Let’s take an example from my experience: a small, HR tech startup developing diversity recruitment technology for enterprise businesses.
In my first few weeks, we quickly discovered that our target customer – Head of D&I roles – were super interested in the product, but didn’t have the budget or authority to implement within their business. But who did? A role in the recruiting business – a Head of Graduate Recruitment.
We talked about this a lot internally and reviewed all of the feedback we had – from sales notes to customer feedback and opinions from our advisors.
But rather than make a clear decision and communicate it internally to announce that we had learnt something new, and we’d be switching our approach, we let it linger. We didn’t want to burn the work we’d already done, and in hindsight we fell into the sunk cost fallacy trap.
By trying to keep our options open, we’d actually made an own-goal.
We weren’t all aligned on who our customer was. Product managers were focusing on our new target, but Sales still wanted to explore opportunities with existing D&I relationships. This meant feedback was fuzzy and inconsistent – we were getting mixed messages, and not enough insight into our evolved market.
And, at the middle of it stood me and the CEO, trying to pacify both sides and find common ground to let us move forward. In hindsight, the decision was the CEOs to make – their lack of declaring a way forward and asking teams to ‘disagree and commit’ was a mistake.
Panicking, and implementing a “spray-and-pray” approach
One of the most dangerous things I think you can do in pre-PMF stages (and, you know anytime!) is say ‘we want to sell the product to anyone!’
Being something for everyone doesn’t work when you’re scaling – so why would it work when you’re just getting started?
There usually comes a time when you’re exploring PMF and things don’t seem to be going well. You’re not getting the right feedback, sales aren’t happening, or maybe your funding is running dry.
It’s SO TEMPTING to say fuck it, let’s just try selling it to anyone. Of course, it’s never said like that. It’s usually positioned as ‘let’s explore adjacent markets’… or someone says ‘I have a potential call with… is it worth it?’.
You’ll also see the flipside happen too: your product becomes a shapeshifter. One minute, it’s an invoicing solution for SaaS businesses. The next, it’s a fully-featured billing platform. To another prospect, it’s a headless API for subscription management.
For sales reps, especially those who are used to selling agency or retainer services, the discovery phase becomes less about disqualification (remember, more important than qualification!) – and more about understanding what the customer needs to sell a custom solution.
Bad Idea. Without a single, defined product proposition to qualify prospects against, it becomes so difficult to understand what is and isn’t working.
Lack of structured feedback process
PMF is a giant experiment, so why don’t you treat it like one?
Willy-nilly, haphazard reactions aren’t sustainable. I’ve seen this happen because people think they’re being agile, hoping to learn quicker.
But what actually happens, just like all the above, is an own-goal. Your approach splits. Your market becomes disjointed with the product. The product moves away from the market. Harder to get consistent feedback. Harder to make decisions.
At a previous company, we did treat PMF as a hypothesis. We had structured conversations about our target ICP, about the lessons we were learning, and experimented with propositions together. And it worked.
Here’s what I’d recommend:
- Use an experiment canvas to define what you’re looking for
- Revisit regularly to discuss findings and measure against expectations
- If it’s not working, use a structured approach to deducing whether it’s the strategy or the execution
- Share feedback without bias, as much as possible
I’ve also been in the position where there was no structured approach to feedback, and everything was based on gut-feel and the most recent sales conversations. It’s not fun. The pressure is on, and you’re stuck in a vicious and cruel circle of pain. Avoid.
Remember, PMF is iterative
Try as we might, it’s probably not going to happen overnight. Your journey to product/market fit is just that – a journey.
Enjoy the journey, navigate the product/market fit map, and try not to take too many wrong turns.
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