OR: PRODUCT MARKET FIT 101
One of the most important things to consider when starting a new business or launching a new product, is the Product Market Fit (PMF).
So what actually is product market fit? Let’s start from the end - successful product market fit ends with your targeted customers actually using your product and even recommending it to others.
Goes without saying, right? Well, it’s not that easy.
According to some reports, the number 1 reason for startups failing is an unsuccessful product market fit, or rather – there’s simply no need for you in the market. Most VCs will tell you that your venture will need a relevant, feasible marketplace to operate in; there’s no use having a product if there is no one to sell it to.
One way to come up with a product/service is to take a big market and look for the problem in it – then coming up with the relevant solution. However it doesn’t always go like that – if at all – and finding the one ‘painkiller’ you can offer to the world is a tricky job (and probably the subject for a completely different article).
If you do have your solution ready, it’s time to ask: what are you selling, and who is desperate for it?
Here are 5 questions that will help you reach your ultimate Product Market Fit:
1. Who is your customer?
Identifying your customer as part of a Market segmentation process is a must for understanding who you are developing your product for. Even if you did start from ‘just’ an idea and only then moved to thinking who will se it, remember this: you will have to accurately define your users and buyers (sometimes they’re not the same people!)
2. What are your customer’s needs?
Understanding your customers’ needs and painpoints will help you refine and differentiate your product from the rest. If there are plenty others doing the same thing – why should we need to use yours? Which leads us to the next question:
3. What is your Value Prposition?
In order build a good PMF strategy, you have to define the advantages, unique values and ‘edges’ you have over your competitors. A clear value proposition will help you stand out in the market you’re targeting.
4. Is your MVP ready?
Minimum Viable Product - An MVP is the most basic prototype of your product. In order to evolve, you will have to start somewhere, and a good place to do so is to determine the list of the most important features you want and need your MVP. Take note from competitors, from actual (potential) users and from mentors and friends. Don’t be afraid to talk about your idea! From there – it’s up to you to create a working MVP that will show the feasibility of your solution and relevance to the market.
5. Did you run some tests?
Once you find a potential customer, give them your MVP and LOOK FOR FEEDBACK. The best way to learn your users’ and market’s needs is by letting them try out your solution. This way, you could actually measure your product and check if it works like you thought it would (spoiler alert: it might not be just like you imagined). Don’t get discouraged: it’s a trial and error and it will take time.
After collecting feedback, you should repeat steps 4 and 5 again and again. Each time gather new user insights and improve your MVP: every feedback and every change improved your product market fit.
Once you feel comfortable enough with your product and the feedback you receive, it’s launch time!
Study case: Dogiz
Dogiz, one of our portfolio companies, demonstrates an excellent Product Market Fit strategy. We had a quick chat with Alon Zlatkin, Founder and CEO of Dogiz, to hear how they achieved PMF for their product.
Let’s take it step by step according to what we’ve learned above:
1. Firstly, Dogiz identified a population with a problem they’d be willing to pay to fix: urban dog owners (!) with a busy daily schedule, causing them to stay away from their pet during the day.
2. Next up, they refined the need – the actual problem that the product needs to address. In Dogiz’s case, it’s the need to stay connected to your pet dog and making sure they get all the attention they need while juggling a busy urban life. Dogiz understood that instead of random dog-walkers, dog owners need someone who is professional and liable to take care of their dog.
And so they’ve arrived to their product: a platform that connects dog owners to professional pet caretakers in their area with the click of a button.
3. By analyzing the market, Dogiz realized that their competitive edge is the easy access they provide to reliable, professional and responsible dog-walkers. The Dodgiz platform can connect dog owners and professional pet services in just a click: It’s quick, easy and flexible, and that’s the Dogiz Value Proposition.
4. Dogiz’s first MVP was a simple app, that had only very basic features: dog-walker booking, status updates about the booking and payment options.
5. Now, in order to get real feedback from real potential customers, Dogiz partnered with a closed group of dog walkers that operated in a sample area. Dogiz let the dog-walkers and their clients use the app and asked for their feedback.
That way they could get true, relevant feedback about their product, and by using those insights, Dogiz kept on improving their app and services according to the need of their users. Even today, the Dogiz team keeps on adding new features and improving their product, in order to be as relevant as possible to the pet owners market.
Now, operating in two countries and with thousands of active users, Dogiz have proven that they’ve reached the ultimate PMF!
Samurai Incubate invests in bold startups that are trying to improve, inspire and impact our lives. We are dedicated to taking ventures from the very basic stages to greater heights, and to later connect them to the Japanese market. We are looking for early stage startup with B2B enterprise solutions in the specific following verticals (focusing on software technologies): healthcare, construction, logistics, blockchain, clean-tech, fintech, insure-tech, MaaS, Retail, Sensor-tech. We provide Pre-seed investments of up to 500K USD and we are able to join rounds.
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