The Basics of Product Market Fit – Part 2

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In the previous post (here) we started discussing the important topic of product market fit (PMF). I explained what this term tells about the status of your product and how to identify whether your product has reached such a status.

The big question which still remains is what are the practical steps for achieving it. As always – the challenge is to cover this topic in a way that will be beneficial for you, no matter what your business is. And that’s a real challenge since there are many types of hi-tech companies, all of which solve different sets of problems and to a different set of users/customers. 

I will start with a general framework called ‘A playbook for achieving a product market fit’ by the Lean Startup co.

You can see the relevant article here.

Originally, I actually heard it on a podcast a few years ago. It immediately resonated with my personal experience so I decided to adopt it.

Let’s cover it for a second and then I’ll provide my take on it.

 

The playbook for PMF – by the Lean Startup Co.

Of course I encourage you to read the full article, but essentially the process described in this article maps the path to PMF by going through 5 phases (described as a pyramid).

The first couple of phases are about the market and are out of your control! This is very important to understand.

The last 3 phases are about the product you are building for this market and that’s totally under your control.

The phases

The phases are (going up the pyramid):

  1. The target audience (the customers or the users)
  2. Their underserved pains
  3. The core value proposition of your product
  4. The specification of the MVP
  5. The implementation of the MVP 

 

Again – #1 and #2 describe the market and that’s beyond your control. The rest are fully under your control and should address the underserved pains of the target audience.

I am not going to repeat everything that’s written in that post. You can read it yourself. I do want to focus, however, about where you should put your attention when working according to this framework.

 

The approach you should adopt

It goes without saying that before you start working on any features, even if you just joined as a product manager to an existing company with an existing product – you must become familiar with the target audience. Hence – the personas you are going to serve.

There isn’t a chance in the world that you can take your product to reach PMF without understanding who you are trying to sell to. I don’t really need to explain why, right? 

I will assume this is clear, so I’ll proceed to the step that its importance is less clear to many product managers (and even to some executives) I’ve met – and that’s the phase of the ‘underserved pains’ (#2 above).

 

The underserved pains

Understanding the target persona is one thing. The information you need in order to become familiar with the persona is quite accessible on most occasions. However, the underserved pains can sometimes be… challenging… to dig.

The founders who founded the company you are working for came up with the product you own after having some hypo-theses about the market and its pains. If the product you are responsible for is selling like crazy and the growth is meteoric, then the founders have done a pretty good job in validating the hypo-theses and executing on those. Also – it sounds that in that case the product has already reached PMF, so you just need to preserve the momentum.

However, for most companies – the product is struggling in some aspects. It could be that it’s selling just ‘ok’, or it could be that it had its golden age but it’s now passed. There could be many other scenarios that go somewhere in the middle of the scale between not selling at all to PMF.

This is your opportunity to shine!

But in order to do that you’ll need to dig into the underserved pains (or revisit them if you or someone else in your department already did that).

Let me give you a spoiler – most likely you’ll find out that the product you are responsible for is solving some of the pain of the user/customer but not all of it.

For example – if the product is a ‘notes taking’ app – then it could be that it provides the basic functionality needed for taking notes, but turns out that these notes, once the user added too many of them, are very hard to navigate through. Hence, the user needs to be able to both take notes so they won’t forget tasks/ideas, and also need those notes to be easily accessible in the right context.

Now, the app does get downloads and some traction, but because the navigation is a mess and the notes are not really accessible given a context – the app only sees a modest success.

You (or the founders or those who came before you… whatever) – missed part of the pain.

Therefore, when you are assigned a product that you will be owning going forward – unless it already has a very strong traction/usage or sales – never assume the ‘market’ phase was researched properly. It’s more probable that some of the pain was uncovered and addressed, but not all of it.

If you are embarking on a new product – then clearly you can assume nothing and need to do your own deep market research with emphasis on the underserved pains.

 

But how do I uncover these pains to their fullest?

The key is always to meet with the  prospects, customers and/or users. If they meet you – it usually means they hope to find something in your offering that will ease their pain. Sometimes they will state their pains clearly, but more often they will come to you asking for features (solutions). At this point – you’ll need to ask them ‘why’ for any desire/feature they ask for. It’s more challenging than it sounds. Luckily I’ve already written a post about it. You can find it here.

Now, in B2B the customers are probably accessible to you and you must take advantage of that. However, in B2C – this is trickier. Trickier but still possible. There are known methods and ways to get the relevant feedback from the end users, but it’s a bit out of scope so we’ll cover it in some other time.

Nevertheless – you won’t cover the underserved pains by digging into metrics or piles of data. Recall that the data can only describe what is being done with your product and how it’s being used. The data cannot answer the ‘why’ questions and therefore it cannot tell you why the users are behaving the way they do, why they came to try your product in the first place and why they stopped using it.

The ‘why’ is always retrieved by talking to customers and the end users, or by surveying them in a more quantitative but targeted way.

By properly uncovering the underserved pains you’ve done a great portion of the hard work towards a product market fit. You won’t believe how many companies and product people don’t go deep enough on that step.

Anyway – when you figure this one out – you are ready to step out of the ‘market’ phase and into the ‘product’ phase – where you are in control. This is an exciting moment!

Before you even start to think about possible solutions, though – you need to focus on the next step which is the ‘value proposition’.

 

The value proposition

Among all the steps in this framework this is the second most important one after the underserved pains.

Your goal here:

In one or two sentences (but no more) – describe what’s the tagline of the solution you’ll be offering. It needs to be very clear how this value proposition is going to tackle the underserved pains you’ve just uncovered.

Continuing our example from before – e.g. – the notes-taking app above – a possible value proposition of your product could be:

‘A tool that helps you take notes and later retrieve them effectively at the right time.’

 

Without fully uncovering the pains of the end user, you might have stopped at the ‘note taking’ aspect of the product, but luckily you didn’t.

Of course this is a simple example for a simple product. Let’s take a shot at a bigger and more successful product. Mmm… what about AirBnb?

Let’s try. 

First thing to note – AirBnb is a marketplace and hence it has both the supply & demand sides it needs to satisfy. Hence – two value propositions to two different personas.

Let’s start with the demand side (the end users):

If I had to reverse engineer their value proposition I’d say it’s something in the spirit of…

Discover and plan your next affordable dream vacation by short-term renting the private properties of other people like you, in a secure and effective manner.

 

To the renters (the supply side):

Make an extra income by leasing your unused properties on a short-term basis in a secure and effective manner.

 

I spent 2 mins on each, so I guess it could be much more improved by spending more time and involving more people, but you got the drift, right?

 

Summary

In this post we introduced the framework that was invented by the ‘Lean Startup Co.’ which encompasses 5 stages towards product market fit.

I claimed that the two most important stages are the uncovering of the underserved pains and the value proposition which follows it.

Think about it, process it and get ready for the next post since we’re not done yet. The framework introduced above is a high level one, and by itself I don’t believe it’s practical enough for most PMs.

Therefore, in our next post I’ll get even more practical by focusing on user journeys.

 

That wraps up the post for today.

If you found this post/series useful – feel free to ‘like’ it. If you think others can benefit from it – feel free to share it with them.

 

Thank you, and until next time 🙂

 

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