What is Product Market Fit? And you can find it in your product as a creator
My number one predictor of whether or not a company will find product-market fit: High shipping cadence. It’s the speed at which the team iterates the product. From “shipping code/shipping product.” — Naval
Most of us can relate to the feeling of producing something that didn’t catch as thought? Did we feel disappointed that we did not produce the right content? Most of us can relate.
Good news. The problem is not with you nor your product — it was your product-market fit. And we’re going to talk about it, how to know if you’ve found it and how to measure it.
Forbes Magazine depicts product-market fit as a hair-on-fire problem — when your product is being ripped out of your hands by eager customers and you cannot keep up with their demand for more, you have achieved the nirvana known as “product-market fit.”.
Attempting to Define Product-Market Fit
Josh Porter of Rocket Insights says the product-market fit is when “your customers become your salespeople.” It happens when users recognize your product’s value, they tell others about their great experience with the product, and you replicate the excellent experience for the new users.
Just like product-market fit (PMF), as a creator, strive for creator-market fit or according to a popular view, go for market-creator fit.
Replace “creator” for “product” in “product-market fit” in the above definition and it makes some sense;
“Creator-Market Fit is when your fans/supporters/clients become your salespeople.”
Product market fit happens when the value you provide addresses and solves the needs of your target market (your tribe), and using the right channels, it will sustain your business and bring you the success you’re looking for.
Tip: Build a product whose value proposition satisfies the needs of a market and its potential customers.
According to Elizabeth Yin of Hustle Fund VC; “Product-market fit is one of those concepts that seems easy to understand as a concept but in practice, hard or impossible to articulate what it actually means. Most people lazily say “Product-market fit is like porn…when you see it, you just know!” But what does that mean?”
Where product-market fit starts; Talking to your Users
To get to product-market fit, define what success looks like for your business. And make it a continuous activity because it provides a complete and clear-cut understanding of who your customers are, how they feel about you and how they are using your product to get their jobs done.
As a creator, to have a clear cut of your users — fans and clients; talk to them often and establish a relationship with them. It’s crucial if you want to develop this understanding in the first place.
Colette Nataf, founder and CEO of Lightning AI, said in How I Stumble on Product-Market Fit; “our business was designed for lifetime value predictions in subscription-based businesses. We needed to find companies that had recurring revenue, could TRACK the recurring revenue from button clicks on their website and who were looking to grow as fast as possible.”
Creators that want to move from a mom & pop economy should care about understanding, and achieving, product-market fit. It’s your responsibility to learn what product-market fit is and understand how to measure it for your own business.
Tips: Successful creators treat their content like a product if they want product market fit.
As a creator, the temptation is to get to a place where you can start generating revenue quickly. And it’s for every good reason. You need money to keep churning out products (content). But, to build a sustainable company, that’s our target anyway, short-term revenue is not the business metric you should be targeting and measuring yourself against.
It is often said that if you’re producing the right content for the right audience, you’ll be able to attract brand partnerships and increase your revenue. But, how do you produce the right content?
Taking a cue from Superhuman founder — Rahul Vohra, they built an engine that powers their PMF; ask your customers (fans and clients) these questions and the choice answers should be any of these four — A) Very disappointed B) Somewhat disappointed C) Not disappointed:
1. How would you feel if you could no longer use Superhuman?
2. What type of people do you think would most benefit from Superhuman?
3. What is the main benefit you receive from Superhuman?
4. How can we improve Superhuman for you?
Use this PMF survey free tool by Sean Ellis to measure your company’s PMF.
Tips: The magic number you’re looking for is 40%.
How to Know You Have Found Product-Market Fit
Now that you know why you should pay attention to product-market fit, and know that achieving it should arguably rank as your number one strategic objective.
Without understanding your company’s PMF, you can’t know whether your product will bring in revenue, generate profit, much less turn your focus to other vital initiatives like growth or upselling customers. You won’t know if you have it or not.
To know if you’ve found PMF, pay attention to these:
- Because of your product-market fit, you could serve this business insanely well — and they would refer us like crazy. Talking about your tribe.
- Is it creating organic growth, where people spread the word on their own? Are people willing to pay for your product? If they are, you have product/market fit.
- At a high level: You have found product market fit when you can repeatably acquire customers for a lower cost than what they are worth to you. This is not earth-shattering. This is a simple business statement. Are your costs lower than your revenues? Are you profitable? (Elizabeth Yin — Cofounder of Hustle Fund VC)
- The value of each user is greater than the cost of bringing them into the product. It means there are enough customers out there and you can efficiently bring them in” (Nikhyl Singhal, CPO Credit Karma)
- “You have PMF when you see retention that creates enough $ or content/virality to drive sustainable acquisition.” (Casey Winters, CPO Eventbrite)
However, all these nuances depend on the stages of your business — “pre-product or post-product?”. To get a good grasp, I’d recommend a further reading of Lenny’s newsletter.
How to Measure Product (Creator) Market Fit
- Measure product-market fit with surveys. Identify what percentage of your users think your new product is a ‘must-have’. You’re looking for the 40%.
- One-on-one interviews with your customers to clearly identify problems. This will also help in generating ideas to improve your product and build relationships. The keyword here is the relationship.
- Analyze the data from your customers. The customers that always buy from you, “what do they have in common?”. Dig in.
- Change your product to meet customer needs. Be aware that customers do change and according to a statement attributed to Steve Jobs; customers don’t know what solution they want. They have the problem, therefore know it.
Some Product Market Fit Questions to Start with:
Be intent when carrying out customer surveys. Design your surveys to ensure that all questions will give you the answers that are helpful. Here are some examples:
1. How would you feel if you could no longer use this product?
2. What would you use as an alternative if [your product or service name] was not available?
3. What is the main benefit that you get from using [your product name]?
4. What type of person do you think would benefit most from [your product name]?
5. How can we improve [your product name] to best meet your needs?
6. What motivated you to use our product?
7. Why are you using our product as opposed to other solutions?
8. What makes our product a must-have product?
Going back to the 40% rule;
“if at least 40% of customers say they would be “very disappointed” if they no longer have access to your product or service or consider it a “must-have” (wouldn’t use an alternative), you’ve created a product that fits into the market.”
Now for the Creators — Face Reality.
Let’s get this straight, as a creator, creating content for the internet is not your core business. Though you do it because you love it — you want to share your ideas and stories with the world. Agreed. But if your goal is to build a successful business doing that, you’re going to have to change your thinking. Your content is your product. It’s what you sell.
Treat your content like a product and strategize on how to get to product market fit. Start producing the right content for the right audience that can pay you.
If you’ve ever tried to sell anything online, you know how hard it is to get people to pay for something they can get for free. And when you’re a creator, it’s especially tough because people don’t want to pay for things unless they really need them or think it’ll make a difference in their world.
You have to think about what’s going to resonate with your customers and what they’re interested in, then get the right tools and people to help you do that.
No question creating content is hard — it takes time and energy.
Getting to product-market fit is a crucial milestone. It assures you — and potential investors — that your customer base is actively buying, using and talking about your product. In short, it determines the future growth and profitability of your startup.
Marc Andreesen, who coined the term, believes companies who have achieved product-market fit can feel it because money is piling up, and investors are staking out the company. On the other hand, companies who haven’t achieved product-market fit can feel it because word of mouth isn’t spreading, deals aren’t closing, and press reviews are flat.
How to get to Product-Market Fit as a Creators
+ Determine your target customer.
- Analyzing your product or service
- Familiarizing yourself with your competition
- Choosing segment criteria
- Performing research
+ Gather intelligence.
Talk to your customers to determine their pain points and how much they would consider paying for a solution to those challenges.
+ Focus on a single vertical.
You probably have a small budget and team. Trying to sell your products to everyone is a disaster. Begin with a narrow focus and dive deep into that industry.
+ Specify your value proposition.
Determine which customer needs you can best address with your product. Figure out how you can outperform your competitors and surprise your customers.
+ Measure your product-market fit.
What’s not measured cannot be improved. Measure your performance to manage your success. Identify key data points that will help you track performance. For instance, what’s your total addressable market (TAM)? Calculate your TAM by multiplying your average revenue per user (ARPU) by the total potential customers in the market. Once you have your TAM, determine what percentage of your TAM are current customers.
+ Avoid complacency
If you manage to achieve product-market fit, don’t assume you’ll always have it. Your customers’ needs always change over time, and you must constantly re-evaluate market conditions to continue meeting those needs.
For an extensive read on how to get to product market fit, read Hubspot’s article on “how to determine product market fit in your industry”
The takeaways
- Use one-on-one interviews to get to know your customers.
- Find out what customers are complaining about or struggling with.
- Welcome and encourage feedback, but always weigh it based on customer value.
- Do not try to please everyone: be honest and open about your product roadmap.
Tip: As a general rule, know that you can’t please everyone, so you should not try to.
Ultimately, you want to design your content (product) so that users (customers) can find it, make it easier for them to share it, and hopefully build a community around your content that champions collaboration.
