Small businesses form attempting to take advantage of a need. A team is assembled, and a product is developed and honed to meet the expectations of a demand.
Successfully meeting a product to a market is an event that entrepreneurs dream about – Marc Andreessen characterises this as the moment in which production of the product is matched by sales. At this point, it becomes nigh impossible to make changes to your product since the day-to-day running of the business is taken up by managing the sales. Forcing you to hire sales and customer support staff.
This moment can happen rapidly, and dealing with the expansion will stretch new parts of your business skill set. But getting there is another world entirely.
Focus on the market
Michael Siebel, partner in Y Combinator, has a bit of experience in working with start-ups going through the product/market fit process – graduates from the Y Combinator program include Reddit, Dropbox, Twitch.tv, and Airbnb, some of the most innovative companies in the tech sector today.
He believes that the key to finding a successful meeting of product and market will happen through focus on the market.
The argument is that too great a focus on the team and the product removes the real intention behind entering a market in the first place.
A product isn’t finished until the point of fit. The process of refinement must involve playing close attention to the way that customers respond to your offering.
Two approaches to you crafting your product
There are two approaches to getting to the product/market fit – one, the Steve Jobs approach, emphasises pushing the product as the solution to the problem that your customers didn’t know they needed. The other is following customers’ needs closely and matching their demands – this is Mr Siebel’s preference.
The truth lies somewhere in between – a product, to succeed, needs to offer customers something out of the ordinary, and that sparks a desire to buy the product. But too far, and you’ll get visionary points, but too few people afraid to commit. Similarly, covering customer demands is a great way to turn customers into loyal purchasers of your products – too far in this regard will mean that your products can become stretched thin through over-compensation.
The Minimum Viable Product
At the Y Combinator incubator, start-up founders are pushed to develop a Minimum Viable Product (MVP). This is a product that represents the most basic expression of the idea that got the founders into business. An MVP is something that consumers can interact with, and find value in.
With an MVP in place, your business becomes testing how people enjoy your product – whether they find use in it, whether it does what you want it to. You only reach your product/market fit by using the feedback loop of customer interaction and product adjustment.
Following this test and design adjustment process cannot guarantee success, but failing by not using this process is guaranteed.