This question came in pretty quickly via email. I’m up late writing this post (1:15am when I'm writing this), so you can see I’m very excited about it. Thanks David!

First, I’m going to propose a few questions and provide some thoughts on determining if you’ve reached product market fit. Second, I’ll provide some ideas on how to test.

Please remember, there’s a reason why we have new iPhones 1-2 times per year and constant software updates. Apple is testing product market fit. The software and hardware iterations are tests. These tests provide feedback. The feedback provides data. The data allows Apple to innovate and adapt to the market … Kind of scary, but reaching product market fit isn’t the end, it’s the beginning. You have to constantly adapt to the market and competition. Test, iterate, preserve, pivot, test, iterate, etc.

Lack of sales, lack of or mixed feedback is … feedback. You just have to listen to it. Dig deep. Talk to your customers and prospects. Get them to reveal what you need to know.

On a side note … one of the best ways to do this is via awkward silence. Ask a question, have them answer, then sit in awkward silence. Most humans hate awkward silence. Most humans will break the awkward silence and a lot of times reveal what they are really thinking.

Yes, it takes time to reach that sales hockey stick, but there are early indicators that you haven’t reached product market fit.

Question: What would your customers say if you asked them to describe your product? Could they tell you the features and benefits? Could they provide you with accurate outcomes on how it will quantitatively help them? Ask them what they are willing to give up (cost, data, time, etc) to use this product?

Thought: Find a small business owner that handles credit card transactions. Hand that business owner a product from Square – The Credit Card Processing system. Ask this business owner to answer the questions above.  Could they do it?

Question: If you are wondering if you have reached product market fit, aren’t you answering your question? (Adapted from Erie Reis).

Thought: There is a reason why you are questioning if you’ve reached product market fit. Maybe it’s not selling well. Maybe you’ve received mixed customer & prospect feedback.  They think it’s cool. It might work, sounds interesting, and is very innovative. Yet, only limited numbers are purchasing.

Question: If you’ve launched and promoted your product, are your customers & prospects calling to discuss more? Or is it just the press or tech enthusiasts?

Thought: Think about the lines when a new iPhone comes out. That’s a little extreme, but it serves as an example.  If you’ve had a well-planned launch and marketed it properly, is anyone calling? Even just to find out more information? If your customers, prospects, press, and techies are calling … you’ve probably reached market fit. If it’s just the press and techies, but no customers or prospects, then you might want to re-visit your product. Or, are you still “pushing” information down your prospects throats only to find they don’t have the best gag reflex?

Question (if applicable): Is it an easy sell to your own company? Is your own company using it? Are they readily adopting the product and it’s producing great results? Or, are they forced to use it? 

Thought: There are cases when companies build products that could be used within their own organization. Yet, they don’t use them. This can happen for various reasons. But, it could be a leading indicator that you don’t have product market fit.

Question: Are the customers that purchased your product willing to become product evangelists? Sure, some customers want data privacy and confidentiality. Yet, they can still provide you generic recommendations. Maybe even voice of customer, anonymized case studies, or other social proof. 

Thought: Again, there could be a lot of reasons for customers not publicly going on record for your product. Try to dig into the root cause. Determine if it’s confidentiality or if the product isn’t up to expectations. If it’s not at expectations, this could be preventing them from recommending it.

How do you test product market fit?

1. Surveys: Well duh, right? But, are you asking the right questions? Think of these surveys like an NPS. Keeping it simple, I’ll provide 3 questions below.

a. How likely are you to recommend this product to a colleague? (adapt the term colleague to the right audience, Ex. Another business owner)

 i. Sliding Scale 1 – 10

ii. Provide area for commentary – Ask why?

b. How would you feel if you could no longer use this product?

i. Very Disappointed, Slightly Disappointed, Not Disappointed (it’s not useful), & I no longer use this product

ii. Provide area for commentary – Ask why?

c. What type of impact is this product having on your organization?

i. Very Positive, Somewhat Positive, No Change, Somewhat Negative, Very Negative

ii. Provide area for commentary – Ask why?

2.    Ask for customer testimonials

a. Social proof is a sign of product marketing fit

b. Will your customers go on record and recommend it? That’s a test

3. Give it away for free! (Kind of…): If your product provides a financial benefit, give it to a TBD number for free, then share the financial benefit (Basically, set up performance contract pricing with a test group of customers)

a. If you are stating your product will reduce costs, then benchmark your customer or prospects current costs

b. Then find an agreeable value for them to pay you in based on the % reduction in costs

c. If your product will increase revenues, repeat the above but with a split in increase revenues

I’m open to feedback and more questions on this subject. This is one of the hardest questions to answer for startups and new product launches. There are many thoughts, theories, and experts chiming in on the Product Market Fit discussion.  I hope I’ve at least provoked thought, if I didn’t fully answer the question.

Thanks again for the question. I'd enjoy answering more. 

Stewart

 

 

 

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