One Core Tenet that Changes the Product-Market Fit Game

🔮 It's not magic. There's one core tenet that can change your PMF game.

The Struggle is Real

The achievement of Product-Market Fit (PMF) is a genuine but elusive state-of-being for too many startups.  There are some very common reasons businesses struggle to find PMF, but luckily these challenges can be overcome with one simple core tenet.

"The best companies that we've funded have all had this quality. You can almost feel it when you walk in the door. There's like a buzz in the air. It's not just that the employees are happy, it's that they're working on something that has this magical property to it, which is product-market fit." - Marc Andreessen

When we think of PMF in B2B SaaS (although it extends to other areas), we can envision different levels of attainment:

1. Your product attracts customers who pay you more than the cost of acquiring and serving them, making it unit profitable and earning you $100K - $1M/yr.
2. Your product gets enough customers annually to establish a sustainable, profitable business, earning you $1M-$10M/yr.
3. Your product attracts enough customers annually to build a scalable business, earning you $10M+/yr.
4. Your product dominates a large market, achieving a 30%+ market share and generating over $100M/yr in revenue.

Unfortunately, today too many companies get stuck at level 1 or 2, earnestly believing they've built the right product but are just not applying the right sales alchemy.  They tend to blindly add new features and bounce focus between target audiences hoping to magically find traction with a huge hidden market that that is seemingly just out of their reach.  They lean on the wizardry of their sales and marketing departments to sell the product to an ever widening audience, or to the vertical-de-jour that seems to be hot at the moment. But to smartly achieve PMF at levels 1 or 2 in SaaS, businesses need more than just domain understanding, quality, and persistence.  It's more than just magic.  

Stack Your Deck

As every magician knows, there are always ways to stack the deck in your favor.  Does this then really qualify as magic? True PMF is found by creating a deep, intimate, 360 degree understanding of your target customers' needs, and then manifesting them as the narrowest possible set of features they'll rely on and return to on a regular basis. 

It's much too easy for managers and leaders to fall in love with their own ideas - and rightfully so.  The aspiration of building the next category-leading app or service is a powerful motivation and goal.  However, leaders that fall in love with their own ideas are like magicians who believe their own illusions.  They can become so invested in their own vision that they ignore feedback and signals available from their users, leading to missed opportunities and missteps. However, by methodically and intentionally declaring data-driven decision making as the core tenet of a product-led growth strategy, they can break through the illusions and see what the user really loves or doesn't love about their ideas.

Data is the Key

By collecting and analyzing product usage data across the entire customer lifecycle - from acquisition, to monetization, to retention and upgrade, great companies build customer-centric products that deliver the exact user experience that the market wants.   

Leaders who do this well inherently reduce the risk embedded in bias and create products that truly resonate with their target audience instead of relying on sleight-of-hand and illusions.

Parting Thoughts

Where is your product at today?  Levels 3 and 4 are within your reach.  Data-driven decision making within a product-led growth strategy finds product-market fit faster and attains levels 3 & 4 more quickly than trial and error with ad-hoc processes.  Fortunately, with a product-led growth coach and the right tools, groundwork can be set during levels 1 and 2 to create a foundation for rapid growth that might just appear magical. 🔮  

TLDR;  Data-driven decision making within a product-led growth (PLG) strategy is the key to faster product-market fit.  An experienced PLG coach can help.