The Product Market Fit Cycle

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The Product Market Fit cycle is designed around helping startups diagnose what they need to test as they iterate not only on product but other important company aspects as well.

For the full blog post on this presentation, go here - http://thedrawingboard.me/2013/05/03/the-product-market-fit-cycle/

Published in: Business

The Product Market Fit Cycle

  1. 1. THE PRODUCT MARKET FIT CYCLECarlos Eduardo Espinal @ceeCopyright - Attribution-NonCommercial-ShareAlike 3.0 Unportedhttp://creativecommons.org/licenses/by-nc-sa/3.0/deed.en_US
  2. 2. A QUICK JARGON BUSTER...• What is Product / Market Fit• What is Positioning?• What is an MVP? and an MVS?• What are Pirate Metrics?• What is a Go 2 Market Strategy?@cee
  3. 3. PRODUCT MARKET FIT• When it is not happening:Poor conversions, no word of mouth, slow usage growth, long sales cycle, and highchurn• When it is happening:“The customers are buying the product just as fast as you can make it — or usage isgrowing just as fast as you can add more servers.” - Marc Andreessen@cee
  4. 4. POSITIONING• What is Positioning? - It is “how youdifferentiate yourself in the mind of yourprospect.”• What is RePositioning? - It is “how youadjust perceptions about you and/or aboutyour competitors.”• ..And... It’s not just about a ‘positioningstatement’@cee
  5. 5. POSITIONING• Avis ‘WeTry Harder’• Positioned around customer service & experiencevs. car count or availability which Hertz led• Re-Positioned the leader as not caring about you• Success = In 1 year, Avis went from -$3.2 millionto +$1.2 million for the first time in 13 years.@cee
  6. 6. MVP &THE LEAN STARTUP• Build a ‘good enough’ product that fitsthe minimum criteria to test out yourhypothesis• Measure interactions with the product• Learn from the results and generatenew ideas@cee
  7. 7. MINIMUMVIABLE SEGMENT (MVS*)• Building an MVP for a small segment(vs. the whole market):• Allows for better differentiation without-group competing products• Allows for easier referrals in-group• Allows for efficient capital use inreaching your market* Defined by Michael J. Skok (NorthbridgeVentures)@cee
  8. 8. PIRATE METRICS* - AARRR*As defined by Dave McClure@cee
  9. 9. GO 2 MARKET• Includes key partnerships and keydistribution channels to reach your MVS• Includes pricing strategies, salesstrategies, and marketing methods(internet marketing, direct marketing,PR, etc)• Note: Make sure to include cost‘assumptions’@cee
  10. 10. RESUMINGTHE BROADCAST...• What has been going wrong?• What is the solution?@cee
  11. 11. HACKERS ARE REALLY GOOD ATBUILDING• It is human nature to focus on what youare good at not on what you suck atand...• Most Founders are ‘hackers’ and lovebuildingso....@cee
  12. 12. FOUNDERS CAN SOMETIMES:• Get stuck at the “MVP stage”• Build and Measure quickly but notnecessarily be “Learning”• Not find Product Market Fit fast enough(before the money runs out)@cee
  13. 13. THE DIAGNOSIS• The identification of a specific MinimumViable Segment• The definition of a clear positioning strategy that shapes their MVP• The testing of a complimentary go 2 market strategy@cee
  14. 14. DEFINE “THETARGET”MinimumViable SegmentYou cannot beeverythingto everybodyso pick somethingfor someone@cee
  15. 15. DEFINE “THE BULLET”• The Positioning Strategy =The Shell• The MVP =The Projectile• The Go 2 Market Strategy =The Powder@cee
  16. 16. The Product MarketFit Cycle@cee
  17. 17. SCALING PRODUCT MARKET FIT• Find Product Market FitTHEN Scale• Otherwise = Inefficient Scaling• Shouldn’t optimize around growth(growth hacking) until you have foundproduct/market fitSean Ellis’s Growth Stage Pyramid@cee
  18. 18. THE PRODUCT MARKET FIT CYCLESUMMARY• Identify a MVS• Design your Company’s ‘Bullet’ -Positioning, MVP, & Go2Market• Test & Measure w/ Pirate Metrics• Iterate on MVS or one variable withinBullet• Rinse & Repeat or Pivot@cee
  19. 19. THE SEEDCAMP LEARNING PROGRAM• New Companies go through each partof the cycle with mentors starting now& cover the basics of cycle in first week• Our Program is designed around theProduct Market Fit Cycle• Annual Program focuses on each aspectof the cycle but “in depth”@cee

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