Growth Factorials

A few years ago, I was looking to buy a mattress. I did some research and found an unfamiliar brand called Wakefit. When I read through the product details, I liked what I saw. There was some science behind how they were making these mattresses. The pricing was pretty good compared to other popular brands. I went ahead and bought the mattress. I didn’t regret my decision. My experience with the product was great. Recently, when I shifted to Bangalore, I bought four more mattresses, a sofa set, a work desk, etc from Wakefit primarily because of my earlier experience with them. Unbeknownst to me, I had become a loyal customer of Wakefit.

When a segment of customers starts showing such behaviour, the product can be called to have reached the stage of Product-Market Fit. This is the sweet spot where you have discovered a customer segment, its pain points and a solution to solve the pain points to a level where the customer segment pays you money to buy your solution. Now, you are ready to think about scale-up. However, a million-dollar question (truly) is how one should go about finding the PMF. There isn’t a one-size-fits-all approach for finding product-market fit (PMF). However, you can take a few steps that will hopefully lead you to discover your Product-Market Fit:

1. Problem Validation:
   • Understand your target customer segment’s needs, pain points, and behaviours thoroughly.
   • Validate that the problem you’re solving is significant and that there’s a demand for a solution.
   • Example: A founder interested in developing a fitness app conducts surveys and interviews with gym-goers to understand their workout routines, pain points, and preferences. Through this research, the founder discovers a need for personalized workout plans that adapt to individual fitness levels and goals.
2. Prototype and MVP Development:
   • Build a minimum viable product (MVP) or prototype that addresses the core problem identified in your research.
   • Keep the initial version of your product simple and focused on solving the key pain points of your target customers.
   • Example: Based on the insights gained from market research, the founder creates a basic MVP of the fitness app featuring customizable workout plans, a tracking feature, and a simple interface. This MVP allows users to test the core functionality of the app and provide feedback on its usability and effectiveness.
3. Customer Development and Validation:
   • Engage with potential customers early and often to gather feedback on your MVP.
   • Use techniques such as customer interviews, surveys, and usability testing to validate your assumptions and iterate on your product.
   • Example: The founder engages with early users of the MVP through feedback sessions and usability tests. By observing how users interact with the app and soliciting their feedback, the founder validates that the app’s features are meeting the needs and expectations of its target users.
4. Define Key Metrics and Track Them:
   • Define key metrics that indicate whether customers are finding value in your product.
   • Implement analytics and tracking mechanisms to monitor user behaviour and measure the effectiveness of your product.
   • Example: The founder defines key metrics such as user engagement, retention rates, and workout completion rates to track the app’s performance. By analyzing these metrics, the founder can identify areas for improvement and measure the app’s effectiveness in delivering value to users.
5. Iterative Improvement:
   • Continuously iterate on your product based on user feedback and data analysis.
   • Prioritize features and improvements based on their impact on solving the core problem and delivering value to customers.
   • Example: Based on user feedback and data analysis, the founder iterates on the app by adding new features such as personalized workout recommendations, social sharing capabilities, and integration with wearable fitness devices. These improvements enhance the app’s functionality and address additional pain points identified by users.

If you take the above steps, you should be able to get closer to finding PMF for your startup. Let me know if you want to add anything else to this framework.