I spoke with a business sales leader the other day. His company has created a new tech product, and he and his team are responsible for selling it. They know there’s a clear gap in the market because they did the exploratory research. The product works—they hired the right product team. He just knows he has the right target audience and can’t imagine selling to any other type of person. And, based on feedback, he knows the product is valuable. Yet, sales conversion is low. Sales cycles are long, and even though there’s a sense of interest, there’s no sense of urgency to buy. Getting and keeping market adoption feels almost impossible.
What gives?
Product-market fit (PMF) is one of the most elusive, hard-to-find, and never-guaranteed-to-stay challenges of launching a new “thing” into the world. It is an equal opportunity business challenge—it evades products in all industries and all verticals. It’s not exclusive to startups—both emerging businesses and legacy brands wrestle with achieving and keeping product market fit.
In saturated markets, PMF seems to be even more difficult. Consumers don’t have to search for your competitor—they’re at their fingertips. In nascent markets, before you even get to adoption, there’s an uphill education hurdle that requires brands to teach consumers how and why to use the product.
For industries deeply rooted in behavior that depend on widespread adoption and use—such as finance and health & wellness verticals, the task of achieving product-market fit is a “scale or sunset” kind of task.
The truth is, we’re making the product-market fit exercise much harder than it should be.
Whether or not you have PMF relies on this baseline question—do you have the right product pointed at the right market?
If you have the right product...but it’s pointed at the wrong market. No dice, no product-market fit.
If you have the right market…but you’ve got the wrong product. Nope, no product-market fit.
Product-market fit hinges on the idea that the product serves the needs of the market to create a true fit. Imagine that.
True PMF can serve the needs of the market in one of three ways.
- Solve a known problem that has no known solution.
- Solve a known problem in which the currently available solutions are falling short.
- Solve an unknown problem with no current solutions.
It’s incredibly difficult to achieve true, sustainable PMF with a product that simply replicates the solutions already available. Not impossible, but difficult. Why? Because then you are only competing on price and experience—two goal lines that are constantly moving.
There are a few common missteps that often snag even the most savvy business leader’s search for PMF.
01
[Misstep] First step, identify the product you want to build.
The tendency is to start with the product first. “We’re going to create the best {insert name of product}.” Once this is set in motion, the challenge is finding the group of people who will use the product and aligning the product use with a specific reason to use it. Quite literally, reverse engineering PMF.
You can do it this way, but it costs so much more time and money than originally planned. Why?
Because as soon as you introduce humans into the equation, they never use the product the way you think they will. Inevitably the use case, product need, or even target audience is bound to change along the way. Worst case scenario, all three of these factors change, and the business is relegated to catch-up mode. In these instances, it’s easy to burn through cash that was originally earmarked for go-to-market or launch strategies.
[The Rebel Way] First step, identify the problem you’re solving.
That’s right, you start with the problem. Not the product, solution, or service. This looks like identifying a key problem to solve.
If you’re an existing legacy brand, spend some time having conversations with your current customer base. What are their pain points? What about the workarounds they’ve created to make the task easier or faster? How are they solving this challenge or pain point now?
I can almost hear the eye rolls. “Didn’t Henry Ford say, If I would have asked them what they wanted, they would have said a faster horse.” (sidenote, I don’t think anyone is really sure if he said this or not…but whatevs…) He’s not wrong. As a researcher, I would advise you not to ask your customers what they want. At least not at this stage. While people may be really bad at telling us what they want, they are really good at talking about the frustrating or inconvenient things in their processes.
This initial step aims to identify the evident unmet need, gap, unsolved problem, or pain point. Identify the friction along their journey.
02
[Misstep] Start with an assumed audience, then validate the target through the sales cycle.
This step is the continuation of the “throw it on the wall and see what sticks” strategy. If you’ve gotten as far as having a product to sell, even in beta or testing, it’s common practice to start with the audience you assume to be correct and then pivot based on interest or sales.
On paper, this sounds like a plan. It checks the boxes of a sound strategy. You’re starting with what you know and leaving room for pivots as you learn more from customers. Check and check.
An example of this is using the landing page test, a common validation tactic for product leaders in this phase. Post a landing page to capture email signups on a waiting list. However, signing up for a waitlist isn’t a proxy for the actual purchase decision, potentially leading to misrepresentation of product viability.
The bottom line of the challenge with this misstep—while you’re guessing, you’re burning through cash. And your timeline to finding the correct path forward is shrinking. No pressure.
[The Rebel Way] Identify the ideal customer profile and which audiences to grow into.
An important part of identifying the target audience is identifying the order of priority. In a world of so many humans, with so many different personalities and preferences, multiple segments may be open to purchasing your product. But, they may not all be the first immediate priority for your brand. By identifying the ideal customer profile (ICP), you can effectively chart a sales target and a growth target.
The ICP is the immediate target for your sales cycle. The tangential audiences are viable audiences for your product and often have some similarities and striking differences when compared to the ICP. For various factors, the tangential audiences may take some time to scale the product or service, extending the timeline to market. As a result, these are segments that help you keep PMF—but maybe not achieve it.
03
[Misstep] Define value based on years of experience.
“I’ve been doing this 30 years. I understand what the buyer wants.” No doubt, industry experience brings value to the search for PMF. But, I would argue the business world is moving too fast that even the most tenured industry exec has blindspots. Actually, I know this. I see it all the time.
Here’s where we see the loudest voice in the room win. And this single decision sends marketing, sales, and product down a start-stop cycle that makes even the most experienced team want to scream. The team will build, launch, or market the product based on the loudest voice in the room. But, it falls flat in the market, or it fails to scale, limiting growth beyond initial adoption. Why? One reason is that the value got lost or was never actually captured.
If you’ve made it as far as creating a product and identifying the ICP, but don’t yet understand how your audience measures your product's value—you’re missing a central key in inspiring adoption.
[Rebel Way] Understand the audience's perspective of value.
Two considerations that often surfaces when deciphering value is determining the priority of audience segments and how they measure value. In the case of bifurcated audiences, this can get tricky. For example, finance and health and wellness brands often encounter a situation in which the audience they are selling to (e.g., employer) isn’t the same as the actual product user (e.g., employee). As a result, there are two different sets of value propositions to untangle. Plus, the only way the employer can tell if the product is valuable is if the employee is using it—meaning there’s a need for a clear feedback loop between the two users. But the only way you’ll find this out is to ask the questions.
When you understand how your audience measures value, you understand how to position in the market. The value propositions tell you what to emphasize in marketing, what to highlight in sales materials, and what features and functionality to bolster within the product.
Conclusions.
Product-market fit is ambiguous. However, there are ways to minimize the guesswork—it starts with the voice of your customer.
