Why do startups fail?
Among the top 20 reasons identified in the post-mortem analysis of the cause of death of 101 startups, product market fit was responsible for the failure of 42% of them. This goes to show how deadly it can be when you sell what your target doesn’t consider a pressing need.
A great product is a great product, that is what it is. People don't buy what they don't find useful. @voguepayClick To Tweet
If what you offer adds no quantifiable value to your target market, selling might be tantamount to World War2 for you. The more reason this post is out to throw light on how startups can ensure market fit for their product/service.
It is not good enough to know what is important, it is better to be able to categorically state why it is quite important.
What does the product market fit really mean?
It simply means being in a good market with product/service that such market can’t live without. It involves a couple of processes you take your startup through in order to make sure that you streamline your offer over time to meet the cogent needs of your target audience.
On many occasions, startups are in love with what they offer, so much that they don’t care what others feel about it.
The product is not for your consumption. What your target market think or feel about it matters a lot because they are paying for it.
The Lean Product playbook uses a model called Product-Market Fit Pyramid to explain how to achieve a product-market fit for your product. The model employs 6 layered components to explain inter-dependent steps to make your offer fit for your target market.
While forming your business, knowingly or not, you go through these processes, components of Product-Market Fit Pyramid, to answer all the necessary questions with your own assumptions. You trust your instinct to decide the output of each step goes into the next step.
This model will help you to be very clear on market-fit of your offer. The component steps help you subject your hypothesis to rigorous test through which you can ascertain how much your market want your product.
Please note that the model works from the bottom component sequentially to the top and repeatedly. That is, follow the steps from the bottom, one after the other and repeat over time to ensure that your product remains fit for your target market.
STEP 1: Determine Your Target Customers
Much as you have some certain people at the back of your mind whose problems you intend to solve with your product or service,
it is pertinent to segment your target market.
Buyer personas are a great tool to help you identify the demography, location, job title, company, roles and responsibilities, primary and secondary work-related challenges and personal goals of your target audience.
One of Brian Tracy’s top-notch selling techniques is GAP analysis. The analysis teaches salesmen to do as much as they could to show their prospect the GAP between where they are at the moment and where they will be after taking the proposed offer.
Before you could highlight this GAP and make your prospect expectant of the outcome of using your service, you must know where the prospect currently is.
How do you know where your prospect is?
Knowing your customer is not a usual customer service routine or regulatory requirement for business, as it may appear. It helps you profile your target audience appropriately and identify the right language to use and how to relate your offer to where they are in the funnel.
STEP 2: Identify Customers’ Under-served Needs
Your product is one-of-a-kind, nobody in your market offers what you are proposing?
Congratulations. Your service offers a magnificent improvement on what currently entails in the market, it will take other products 10years to catch up with yours? Bravo!
What pressing need(s) of your target audience does your product meet?
Most especially now, that the Nigerian economy is technically in technical recession and you want Nigerians to spend Naira that is so scarce on what does not really add value to them?
To a fanciful product that meets no particularly important customers’ needs right now. Don’t wait until your business nosedives.
STEP 3: Identify Your Value Proposition
Here is the bull’s eye!
Among all the pressing needs that your product/service can meet, which one do you want to champion? @voguepay
“That’s the heart of this entire concept. Clients do not buy ‘things’. They buy the experiences that those ‘things’ are able to deliver. And, when so doing, they measure the benefits against the costs. Which leads us directly to consider: what is a value proposition?” ― Cindy Barnes, Creating and Delivering Your Value Proposition: Managing Customer Experience for Profit
In the words of Cindy Barnes, what experience does your product/service create for your target audience? It is the experience they value.
The experience brings benefits which they evaluate against the cost of your product/service.
You will sure close a lead if he/she can attribute more value to the benefits of consuming your product than the pain of paying for it. It is just a matter of when.
What is used to discourage smokers from their addiction? “Dying young”
That is the experience smoking will lead them to, though they momentarily enjoy their favorite mentor. It is now their choice to enjoy the mentor in a cigarette for a short while and die young.
Call it a competitive advantage but value proposition is what stands you out among the competition. When your product category is mentioned anywhere anytime, target audience should be able to use your value proposition to separate your product from the pack.
STEP 4: Identify Your Minimum Viable Product (MVP) Feature Set
Before you spend so much money fully developing your beloved product, hold on for a moment. Identify those features of your products that are just enough to create value for your target audience.
Minimum Viable Product is the miniature version, so-to-say, of your product you can take to the market to feel the market’s pulse.
When you reach your market with MVP, it is easier to develop your product based on specifications of the majority of your target audience.
Take records of what features prospects complain that your MVP is lacking.
As you tell them what more you intend to add to the MVP, ask to know which features they actually don’t fancy.
Ever thought of why some services have basic, gold and diamond plans? The basic product offers the fundamental features of the product. They can even be offered free to achieve a minimum number of members. When the basic version of your product is free, leads have a taste of what you can deliver.
It is easy to upgrade from a free basic plan to a paid plan for users than to jump-start a product they know nothing about. Using MVP helps a consumer alleviate the fears of getting value for his.her money.
Identify the minimum viable features of your product and move on.
STEP 5: Create and iterate your MVP
After identifying the minimum viable features, its time to create and test your MVP. Your MVP represents your real product. It is the live version of what your product will deliver.
The major reason you are launching with MVP is to be able to add more features as the market demands. Since your purpose of going through the Product-Market Fit processes is to ensure you finally arrive at what the market really wants.
It is the feedback from your target audience that will determine what more features you will add to the MVP in order to make your end product. Change is the only constant thing in life. This process is what you should go through over and over again.
Why do you need a product market fit?
As your market evolves, follow the trend in the needs of your target market. Make your product evolve with the market.
As a startup, ensure that what you offer fits well into your market from time to time.
It is good to be innovative. Doing something different or the same thing differently, is not a bad idea.
But, make sure your innovation meets the needs of your market.
We are proud of our innovative products at VoguePay. We call them developer tools. They are business support and content management tools for all types, sizes, and forms of online businesses. Please check them out here.