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How to achieve product-market fit before you design anything

Steven Carr  |  February 05, 2021

Product-market fit doesn’t happen by magic—that’s for sure. However, all too often, companies make the mistake of imagining a brilliant idea for a product, investing huge amounts of time, money, and resources to design and develop it, then (maybe) getting some user feedback right before launching. The success of your new product is not sleight of hand. In fact, achieving product-market fit is very real and only works if your target customers are in on the trick.

Let’s start with the basics.

What is product-market fit?

The idea of product-market fit is widely attributed to entrepreneur and investor Marc Andreesson, who describes it as finding a good market with a product capable of satisfying that market. In other words, product-market fit describes a scenario where a company’s target customer is buying, using, and becoming champions for a company’s product in numbers large enough to sustain that product’s growth and profitability.

definition of product-market fit

A helpful way to understand it was surfaced by Dan Olsen, author and product management consultant. His product-market fit pyramid consists of five layers:

product-market fit pyramid

In his pyramid, you start with your target customer, which is found at the base of the pyramid. The layer above that is their underserved needs, and together, these two layers make up the market. 

Moving up the pyramid, the top three layers pertain to your product. The first product layer is your value proposition. This layer deals with the customer needs you’re going to address and how you’re going to do so. Pro tip: product markets are competitive, so make sure you’re able to articulate how your product is better or different from other products. Accompanying your value prop is your feature set, or the product’s functionality that addresses the needs of your customer. Finally, the top layer of the pyramid deals with user experience (UX). This layer focuses on what and how your customer interacts with your product.

Given this framework, product-market fit can be seen as how well the assumptions and decisions you make in the top three product layers resonate with the market (the bottom two layers).

Why is product-market fit important?

It really boils down to this: just because you’ve designed a product that provides a solution doesn’t mean there was ever a problem to begin with. So achieving product-market fit is important because, without it, you run the risk of building a product that no one actually needs.

“You can’t grow a product that hasn’t reached product-market fit.” -Arjun Sethi, Senior Director of Product Management, Growth, and Emerging Products at Yahoo

Think about that. Imagine how difficult it would be to grow and scale a product that people don’t need. Without product-market fit, you’ve essentially created a product without an “aha” moment. That critical moment where your target customer recognizes the value of your product and needs to buy and recommend it to others. So how do you achieve product-market fit and drive aha moments for your customers?

How to achieve product-market fit

If you want to build a product with value, then you need to talk to your target customer. There are many ways to do this, but a good place to start is with exploratory research. The goal here is to consider the problem you expect your idea will solve and validate that it is, in fact, a problem in need of a solution.

Conduct exploratory research

If there isn’t a clear problem that you’re aiming to solve, you run the risk of developing a product that’s merely nice to have. When this is the case, it’s harder to persuade people to invest their time using it, nevermind buying it. So whatever the problem might be, try phrasing it from your target customer’s perspective:

  • “It takes too long to sort through my email.”
  • “I’m not sure where to find the best pad thai.”
  • “I don’t know anyone else who’s interested in extreme sports.”
  • “It’s too hard to understand all of these legal forms.”
  • “I need to look over these complex spreadsheets before noon, but I only have my phone on me.”

If you can state the problem simply, briefly, and without referring to your own product idea, then you’re on the right track to creating a necessary solution.

You’ll then want to pinpoint who’s experiencing the problem you’re trying to solve. Are they of a certain age? Do they work in a certain industry? Have a particular skill set? This becomes your target market. Be sure to include these folks in your research. Your product is for them, so their needs should be your top priority.

3 questions to ask your target customer to ensure product-market fit

Once you’ve found your target customer, it’s time to follow along as they try to solve the problem. You can do this through a series of interviews or usability tests. Your goal is to see how they approach the problem, where they get hung up, what barriers you can remove, and how you can help them.

1. How are people currently attempting to solve the problem?

In your market research, ask your participants (aka target customers) to complete the problematic task(s) as they naturally would. Observe how they approach the problem, listen to how they describe their process, and notice what tools they use to get it done.

  • Do they start with a Google search?
  • Do they turn to social media to see their friends’ recommendations?
  • Do they have a favorite website or app that helps them do what they need to do?
  • Do they need to use physical items to complete their objective?
  • Do they spend a lot of time doing a boring or repetitive action?

Why are we asking this? This question helps you determine whether the problem is really a problem, and it’ll help you determine whether your solution is viable. If people are hacking together their own solutions, or wasting time repeating the same tasks over and over again, then it’s clear that the problem is real.

Remember, people are creatures of habit. If their current process is good enough, they’ll be less likely to adopt an unfamiliar, new product or technology. On the other hand, if their current process is difficult or frustrating, and you help them realize just how frustrating it is, then they’ll be much more open to your solution.

2. What frustrates them about their current process?

It’s helpful to hear users describe in their own words what they like and dislike. Make note of anything they complain about, including: the amount of time it takes, the number of options they have, any roadblocks or unwieldy interface elements they come across.

A simple but effective question to ask might be: “If you had a magic wand, how would you improve or change this product or experience?”

Ask whether or not they were able to successfully complete their task, and how easy or difficult it was. Watch for any places where they sigh, groan, or hesitate. Sometimes your users won’t immediately identify what’s frustrating them—they’ll just know that they’re having a hard time. It’s up to you to pay attention and figure out what’s causing the negative experience and how you improve upon it. With suggested sentiment, you can uncover these moments of delight or frustration without having to watch hundreds of hours of video.

Once you pinpoint your target customer’s frustration, you’ll more easily be able to prioritize what you need to focus on in order to alleviate it. Chances are your users have complaints you haven’t even thought of.

3. What other activities go hand-in-hand with this problem?

Once your participants have completed the other steps, you might ask them: “What would you do next?” 

For example, if the users have been trying to find a cross-country flight, their next steps might include booking a rental car, making a hotel reservation, or adding their travel dates to their calendar. But you might also learn less-obvious things. For example, maybe your users like to forward their travel information to their family immediately after booking the ticket or set up their out-of-office memo on their email right away before they forget.

Ultimately, this question will help you uncover opportunities to save your users time by completing multiple activities at once or leading them intuitively onto the next action.

Of course, your product doesn’t need to do everything, but collecting this information will help you understand your target customer’s mindset and the path they take to solve their problem. This is how you begin to design products and experiences with customer empathy in mind.

You don’t need a product to achieve product-market fit

Doing your research upfront will save you from designing a product or experience that no one needs. You’ll find opportunities for your product to solve problems—perhaps in ways you hadn’t originally imagined. Not to mention, you’ll avoid going back to the drawing board months into development.

If your product can solve a real need, and it can do it easier, faster, cheaper, or better than the alternatives, then you’re on track for product-market fit.

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About the author:

Steven is a Content Strategist at UserTesting. When he’s not inserting oxford commas where they belong, you can find him shooting pool at a local dive or laughing at his own jokes.