“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to 100 other good ideas. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying NO to 1,000 things.” ― Steve Jobs
Market Fit Pyramid. All the layers of the pyramid are hierarchical and are built on top of each other, that proposes a structured guideline to achieving product-market fit
The bottom layers of the pyramid is the market. As a product manager, you don’t control the market. If you change your customer, then your whole pyramid falls down and you have to start all over again.
You can pick which market you want to go after but everything builds on top of your target customer and their needs.
- Whose life are we trying to make better?
- Who we are trying to create value for?
- Within our customer needs, which ones are undeserved?
In our Product-Market Fit pyramid, the Product layer is divided into 3 key elements:
A value proposition is a promise by a company to a customer or market segment.
The functionality we need to build to deliver the benefits that fit customer needs. Validating at this stage plays a crucial role in defining direction for our product.
Good design is something that causes delight, a positive functional surprise; resulting in an emotional uplift in our users.
Determine Your Target Customer
These are the people whose desires, values and needs most closely align with what your business can offer them. They’re already looking for what you have. Understanding your target market requires research over assumption.
It’s about trying to grasp on a much deeper level who those people are, what motivations they’re driven by and how you can reach them.
Identify Underserved Customer Needs
Divide your hypothesis into the “problem space” vs the “solution space.”
A problem space as a customer problem, need or benefit that the product should address.
The solution space there is a specific implementation to address the customer need or requirement.
An underserved market is a large group of people who have been ignored by businesses in a certain industry. This group can represent a certain gender or race. An underserved group can also be people who live in a certain location (such as a neighborhood or city), or a group of people who share certain beliefs or experiences.
Examples of product-market fit
Some companies have done such an outstanding job creating a product to fit the market that their successes can serve as models for your product development efforts.
Netflix first gained traction in the early 2000s. Movie watchers were tired of paying late fees from brick-and-mortar DVD rental shops. Netflix sent them DVDs by mail as part of a subscription service, letting people keep a disc as long as they wanted.
If Netflix had remained a DVD-by-mail company, it would have disappeared when DVD players did. Instead, Netflix positioned itself as the easier, cheaper alternative to whatever currently dominates the entertainment market: brick-and-mortar rentals, DVDs, or traditional TV. Netflix has altered its product every time the market need changes, maintaining its fit.
Netflix’s success is a great reminder to stay flexible in changing markets.
Google competed with lots of other search engines for market share when it started. As the other players in its market, they made money by offering ad spots next to search results. In 2003, they jumped ahead of the competition when they introduced a new concept, AdSense.
Google realised that businesses would pay to display their ads other than their search page. AdSense was developed to meet that demand. AdSense scanned webpages and automatically display relevant ads.
Within a few years Google Adsense was generating $95 billion a year. Google identified a need no other search engine was meeting, and then met it.
Take the time to find things that your competitors aren’t doing and adapt to fill unmet needs.
Slack the instant messaging platform used for workplace communication, started out as a completely different business. The founders were developing a role-playing video game – Slack was something they had quickly hacked together as an internal communication tool for their team.
The team realised the market had plenty of role-playing games, but there was nothing out there quite like Slack. They pivoted away from game creation. Today Slack has over 10 Million users.
Slack’s success proves that changing your focus towards a better product-market fit can be worth your time. Don’t be afraid to radically change your original idea when you see a better opportunity.