Now that you know what you are looking after with Product-Market fit (PMF), how do you go about finding it?
Part 2 (this piece) of this guide introduces two frameworks to go about finding PMF. The Lean Startup approach by Eric Riess and the Deliberate approach by Rahul Vohra founder of Superhuman, an email client.
Lean product process - use an MVP
The bottom idea of the Lean Startup is to use a Minimum Viable Product (MVP) to search for PMF.
An MVP is a minimal, highly simplified version of your product. A version with just enough features to test the critical assumptions of your value proposition.
In the words of Steve Blank and Eric Ries:
You’re selling the vision and delivering the minimum feature set to visionaries not everyone.
-- Steve Blank
Simplified does not mean simplistic, though. It needs to be just enough to convey the product vision and definitely not a pilot (a controlled trial of a fully fledged solution).
An MVP is:
- Minimum: the most rudimentary, bare bones feature set of the solution as possible.
- Viable: sufficient for early adopters to grasp the value proposition of the solution
- Product: something tangible customer can touch, feel and interact with
The Business Model Canvas by Osterwalder) is useful to break down the MVP concept. Following this framework, a MVP should address four components:
- Customers: who are your potential customers? How can you segment them? Can you come up with a list of names of people who might love your product? This is the people that you want to approach.
- Value Proposition: make sure you are able to phrase it concisely as “my product helps xxxx doing xxxx. We are different because of WWWW”.
- Channels: How do you deliver the value to your customer segments? How will you create awareness? How will you sell your product? How will you deliver it? Which type of after sales will you offer?
- Relationships: What is the relationship between you and your customer? E.g. self-service, personal assistance during sales, creating a community where members share knowledge
This way of thinking of an MVP emphasises that it is not a set of features or the product itself. An MVP is an artefact used to learn:
The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.
-- Eric Ries (The Lean Startup Book)
To learn what?
Ultimately, whether you can build a business around the product you are envisioning. The most critical question is: are there people out there willing to pay for this? Do you have a systematic way of repeatedly reach out to them and find them?
A product by itself is not a business. A product alone belongs to a museum!
If you want a business you need customers. Customers that you can systematically reach out to present an offer that - by addressing some of their underserved needs - brings value to them. This being the reason why they want to pay you for this.
An MVP is a low-invest artefact you use to figure out if you can tick all the boxes to have a business. Don’t lose this from your sight!
My personal learning
One common mistake when implementing the MVP methodology is focusing too much on the building and forgetting about the selling. Don’t fool yourself by building for your self. Invest early in finding out how to bring the product in front of your customers and making sure you know how they can find out about it.
When I launched my first company, we built a product that was way too elaborate. We called it MVP when in fact, it was a fully-fledged solution that we fell in love with. We kept calling it MVP to justify to ourselves why we kept building and extending it.
But only because you call it like that, doesn’t mean it is minimal.
I feel you. Building something is fun and when you are in the middle of this creative rush, it is easy to keep going, increasing the scope but still call what you are doing "building an MVP". Please be really critical! The MVP for your idea is likely to be much more minimum than you think!
You need examples, to grasp the scope of MVPs. This is a list of some expressions of MVPs:
- A landing page where you present your product. You circulate it within your target customers to raise awareness and generate traction
- A short introduction video of your solution with a Sign-up option to measure interest
- A small Search Engine Marketing campaign on $5 a day. You don’t even need a landing page for this.
- A Paper Prototype (black and white sketch of your solution) that you show your target customers and see their reaction
- A fassade to pretend an automated service is in place and see if people sign up for that
Deliberate approach - the Superhuman Framework by Vohra
While the Lean approach above assumes that you start without a product, Vohra’s deliberate approach starts with a working product. By repeatedly surveying your customers and acting on their feedback you can adapt and adjust your product to reach PMF.
The starting point here is a working product and a set of users. Ideally at least 30 or 40 because you will use them to engine your way to PMF. Because - and this is the novelty according to Vohra- PMF is measurable and something you can optimise for.
This framework is a reaction to the lack of leading indicators reporting PMF. People will tell you: you either have it or don’t. But what if you don’t? What can you do about it?
This framework is an answer to that.
In this framework the most important indicator is the percentage of people who answer B to the following question, coined by Sean Ellis:
- “How would you feel if you could no longer use the product?” A) very disappointed, B) disappointed and C) not disappointed.
You have PMF when at least 40% of survey respondents answer Very disappointed. This is your definition!
In case you don’t have that number you can engine your way there by repeatedly surveying, segmenting, analysing and roadmapping your insights into your product. Go straight to Vohra’s articles to dive in into the mechanics: