Steal our 5 step process to developing product market fit for startups yet to launch

Product market fit as we know it only makes sense for companies that have launched. You immediately know if its a hit or not because the signs are clear, no patronage, no growth, loads of complaints. For companies that haven’t launched though, how do you tell if you’ll find product market fit? How can you measure your possible success when you’ve not spent a ton of money hiring developers, building, launching and marketing? That zero sunk cost possibility and the exact method to measure product market fit even when you’ve not started is why we are here today.

Hi everyone, you are on track if you are obsessed about your product from day one. Founders can’t stop thinking about it. It keeps you agile all day and won’t let you sleep at night. That’s a totally normal thing…but quickly moving away from thoughts into a viable product and constantly iterating to find the right fit for your market is the goal. There is no one way to achieve product market fit.

Product market fit is different to different people. For you, it could be instant validation in terms of purchases. For another, it could be metrics like sharing, subscribing or following…this especially applies for content based businesses like blogging, media houses, newsrooms and the likes. But I believe it boils down to two things and these are well captured by two authorities in the business world

Paul Graham if Y combinator, the foremost VC form in the world known to invest in companies like Dropbox, doordash, coinbase, Airbnb, Stripe to name a few definied product market fit as “when you’ve made something people want”. Of course this is very direct and it works. If people want your product, you’ve achieved product market fit because it means constantly increasing patronage and loyal customers. For Sam Altman though, product market fit is when users spontaneously tell other people to use your product. Now this is also crucial because like we shared in a previous session here on Hala, if you are able to inspire people to talk about your product every now and then in your absence , you’ll gain exponential exposure and patronage.

So what’s the key definition for you?

One thing to keep in mind is that if you don’t fit product market fit early, that is before you run out of cash, your company is going to die a natural death out of zero demands.

As such your goal as a founder is to find product market fit quickly. An easy way to measure this as a founder is that - if demand isn’t growing or totally non existent then there isn’t a product market fit yet.

Conversely, you can tell when there is a product market fit by inverting the above assertion. If demand is growing and word of mouth is increasing, you’ve hit product market fit.

Product market fit happens when your product offers value, solves a pressing need, is growing fast and you start getting loads of positive reviews.

Let’s take a leaf from Rahul Vorha who wrote a fantastic article on how his email experience company found product market fit. He outlined a four step process to reverse engineer the process of finding product market fit, helping us identify the metrics that matter and how you too can copy and paste this excellent model. Save time, save cost, save yourself from stress.

You can read this entire article here as we’ll just be touching on key points and not breaking it down in-depth.

Sean Ellis coined the term “growth hacker”. He led early growth in companies like Dropbox, LogMeln and Eventbrite. We can all agree he knows his onions. He set a benchmark to determine product market fit - just ask everyone “how would you feel if you could no longer use the product?” Then measure the percentage who answer “very disappointed”. He found the magic number to be 40% further establishing the fact that companies that had less than 40% of their users responding “very disappointed” has not found product market fit. Ideally, if 40% or more of your current users are very disappointed if they lose access to your product, then you’ve found product market fit.

But understand why this is a challenge for us. This metric only matters if you’ve launched, if you are already in the market. Our goal today is to establish how you can measure potential product market fit when you’ve not spent a ton of money or time; in other words, how can you tell if your idea would be a hit?

I’ll simplify it

Run a survey for your idea asking four questions. Start by sharing your value add clearly. Clarify is key. Remember you’ve not launched and the best you have at the moment is probably a scrappy MVP which doesn’t inspire people much. So tilt more towards telling people

1. Why they’ll need your product

2. What’s the value they’ll get

3. How it solves their current problem

4. Now talk about your features and pricing

After clearly establishing these, go ahead to run a survey consisting of five questions to your audience (remember we are big on audience building. Revisit our former episodes on building your audience. It’s very key and you can’t ignore it). Now your survey should have these four questions

1. How would you feel if we could no longer launch?

(A) very disappointed

(B) somewhat disappointed

(C) not disappointed

2. Who do you think will most benefit from our product when we launch (open text question. You want to hear people describe your potential users in their own words)

3. What is the main benefit you think you’ll receive from our product when we launch? (open text question. You want to hear people describe in their own words, the benefits you’ve clearly identified you’ll provide.)

4. What features do you think we should build specifically for you?

5. What best describes you?

(A) startup founder

(B) HR

(C) marketer

(D) sales executive…

Add/remove options as relevant to your specific field.

This framework is based on Sean Ellis’ but we’ve modified it to address a startup in idea stage and haven’t launched. Having gotten feedback, the next thing you want to do is to make sense of the data.

We’ll stop here today so we don’t get to overload ourselves with information. Tomorrow we’ll focus on making sense of the data you gathered and exactly how it can help you achieve product market fit. THE END

At Hala, we believe that consistency is greater than intensity. Thats why we are building our community around the principles of improving with just 1% daily; which compounds overtime into something remarkable. Hala is going to be a fine blend of creatives, experienced doers, starters and dreamers. We are founded on the strong belief that ultimately, we hold a duty of care to others in need. We want to balance access to opportunities regardless of colour, background, faith or income level. We value Integrity and highly regard dignity of labour within the Hala community. As a community, our success is measured by how many dreams are achieved, those broad fulfilling smiles when help arrives and how well we are able to impact humanity. These principles are consistent with Bible teachings where we draw our faith and inspiration from. You are welcome to join Hala, you’ll discover practical tips you can start implementing today to stay ahead in business.

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