Every founder you know is trying to perfect their PMF process. Some are still looking for a functional product-market fit framework, others have already found gold, while others are still figuring out the concept of product-market fit.
Whatever stage you are on, you need a solid framework to keep testing your hypothesis and ensure you are working on something your audience needs.
In this article, you will find a simple framework to replicate if you aim for product-market fit. Before I share the framework, a short note on the product-market fit pyramid to set the context.
The product-market fit pyramid.
Product-market fit pyramid should be seen as a proven model to understand the concept. It has five layers — each denoting an important aspect of your PMF journey. Have a look:
If you want to achieve PMF, you need to cater to the underserved need of your target customer through your value proposition. The proposition should be supported by a relevant feature set and UX (at the top of the pyramid).
In this pyramid, the top three layers are your product — something you can control, and the bottom two are the market — something out of your control. You need a balance between the market and your product to achieve product-market fit.
The decisions and assumptions related to your product will impact your bottom two layers. Your PMF strategy should balance the top three layers so it fits well on the solid foundation of the underserved needs of your target customer.
With that being clear, let’s look at the five steps of the framework you must follow to simplify the PMF process.
5-step framework to achieving an optimal product-market fit.
There are a million ways to achieve the same result in business (and life). The same theory applies to achieving product-market fit too. Here is one of the proven PMF frameworks you can apply to your existing processes to boost your PMF ambitions:
Step 1: Write down everything you currently know.
Before you begin any activity, writing everything down always gives better results. The same applies to the PMF process, too. You need to drill down and discover all the information about your customers— what, why, who, etc. This means you must interact closely, conduct market research, and gather your insights.
Based on market understanding, you should document your value proposition and positioning. Find answers to the following questions while modeling your business for product-market fit.
- Who is your customer?
- Problem to be solved (pain points)
- Value proposition
- Channels of distribution
- Differentiating edge
You can use any one-page business planning template to get started, like the one below:
Step 2: Create an MVP & start market validation.
After you’ve written everything down, the next step is to start validating your hypothesis using an MVP.
Think of an MVP or minimum viable product as a prototype of your final version. It clarifies what you are building for your audience and gives you a reason to reach out.
Your MVP doesn’t need to be fancy. It can be as simple as a landing page or a waitlist.
Psst… GapScout used an open early access waitlist to validate its concept. We launched a one-page WordPress website in July and started organic promotion. The user feedback helped us refine our positioning and add several useful features to our v1.
The idea is to reach out, experiment with your proposition, and track/analyze responses. This will give you enough insight into your audience’s expectations. Here’s how to do this in 3 steps (which we will expand on in the next step):
- Create a simple and basic MVP (it can be as simple as a landing page)
- Run experiments to maximize your reach (Twitter, Quora, Reddit, etc.)
- Track impressions, feedback, and other relevant metrics
Step 3: Get closer to customers.
Once you have a decent and marketable MVP, you should promote it among relevant communities to gather their feedback. The idea here is to find your tribe and try to capture the voice of the customer.
Create different experiments, conduct user interviews, or watch online reviews or social posts. Social listening lets you start recording the online sentiment, listen to customers’ voices, or derive insights about general perception, expectations, performance, and value proposition.
Ways to Get Closer to Customer
- One-to-One Customer Interviews
- Social Media Surveys
- Ad Campaigns
Read More: How to Set up a Voice of Customer Program?
The idea here is to extract every piece of information (positive or negative) that users post about you online or want to share with you.
This will give you the necessary information to drive your product development efforts, start a product discovery engine and find out an underserved problem customers are facing and are ready to pay for.
When you listen to prospective customers from the beginning, you are better prepared to start working on a validated problem and move ahead with a customer-centric product roadmap (which paves the way for revenue generation).
Step 4: Start with product development.
When you reach out to your customers, you will start gathering insights — into their wishes, expectations, and desires. Use the data to start an engine of product discovery.
Product discovery is the process of understanding the customers and using that knowledge to build useful (and valuable) products that solve their needs. A continuous product discovery model helps you stay on track to build a product that customers need and love paying for.
According to Teresa Torres, the author of Continous Discovery Habits and a product discovery coach, every startup should have an engine for continuous product discovery.
Continuous discovery helps capture the right opportunity at the right time, drive product efforts, minimize resource wastage, and is the fastest way to achieve product-market fit.
Use customer insights to prioritize the product features most likely to add value to your audience’s life.
Such an approach helps beat the curse of knowledge, get in the end-users’ shoes, and build a truly customer-centric product to push you towards product-market fit and product-led growth.
Step 5: Rinse, repeat and achieve PMF.
The final step is not exactly a step but an advisory against a common misconception about product-market fit. Many think achieving product-market fit is a one-time job, but it is more complex than that. Staying valuable to your audience so that they keep appreciating you is a continuous process that stretches the lifecycle of your startup.
As your users glide through life — their hopes, perceptions, and expectations change. So does your business goals.
You must always stay close to the customer, listen to their evolving needs, and address them through product features that make their lives easier.
To truly stay on track to build a customer-first business, you must keep returning to your customers. This involves:
- Regularly interviewing your customers and capturing the voice of the customer;
- Driving your product discovery and development efforts around consumer expectations;
- Building and delivering something they need at the exact moment.
Keep repeating steps 3 and 4 to a point where the customers truly feel value in your product and become ambassadors for your business. That’s when you’ve made it.
The 40% rule of achieving PMF.
A common rule of thumb around product-market fit is to have a 40% or more score on a PMF questionnaire or survey.
The PMF survey, also known as the Sean Ellis test, tells you how many users will be disappointed if your product ceases to exist. The survey is usually simple, having one important question — How would you feel if you could no longer use a product?
As more customers (40% or more) incline toward being very disappointed, you are known to have cracked the code to achieving PMF.
Naturally, this means staying closer to your audience in real time, listening to their expectations, and keeping track of online sentiment.
Next steps: Listen to your audience in real-time with GapScout.
Continuous discovery is an integral part of the PMF process. When you follow the steps mentioned above, you can be sure of being on the path of continuous discovery and PMF.
The idea of reaching out and listening to opinions about your product, especially at the beginning, can be overwhelming. That’s where GapScout comes into the picture. GapScout scans every online platform for reviews and gathers distilled insights and consumer sentiment about your product.
Use GapScout to stay closer to your customers even when you don’t have the time (or resources) to reach out daily. GapScout does the heavy lifting for you.
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