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Product Market Fit and Beyond

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What should new products or startups focus on first on the journey to achieving Product/Market Fit. How do you know if yo have achieved it? If you think you have Product/Market fit, what are the next steps?

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Product Market Fit and Beyond

  1. 1. …. And what comes next? Product-Market Fit How to achieve it…. 1
  2. 2. The Challenge! “The number one problem I’ve seen for start-ups, is they don’t actually have product/market fit, when they think they do.” Alex Schultz Facebook Growth Marketing 2
  3. 3. Nick Coster Co-founder and Head of Training @nickcoster | Nick@brainmates.com.au www.Brainmates.com.au
  4. 4. About Brainmates • We teach and consult in Product Management. • We developed a Product Management Framework to help us and our clients • deliver products to market faster and • manage in-life products with greater success. • We’ve trained over 3000 product professionals in Australia, New Zealand and Singapore. Ideate Explore Focus ImmerseDefine Build Prepare Launch Product Strategy and Lifecycle Management
  5. 5. Australia’s only dedicated Conference for Product Managers. Sydney – 23rd October Melbourne – 18th October LeadingTheProduct.com
  6. 6. What is Product Market Fit? 6
  7. 7. What is Product Market Fit? Product/market fit means being in a good market with a product that can satisfy that market. -- Marc Andreessen 8
  8. 8. What is Product Market Fit? Product Market Fit means that a sizable group of people have found enough value in your product to exchange something for it. --Nick Coster - Co-Founder, Brainmates 9
  9. 9. Product Market Fit 10 Development Introduction Growth Maturity Decline ValueMetric Time Product Market Fit Achieving Product Market Fit is the inflection point from “Introduction” to “Growth” in a Product’s Lifecycle BEFORE AFTER
  10. 10. 11 For Product Market Fit you need “Traction”
  11. 11. “Traction” “Traction is a measure of a products engagement with it’s market. Investors care about traction over everything else.” -Venture Hacks, “Pitching Hacks” http://venturehacks.com/pitching 12
  12. 12. “Pirate Metrics” - AARRR 13 Acquisition Activation Retention Revenue Referral Growth Metric Growth Metric Growth Metric Traction Metric Traction Metric BEFORE PMF AFTER PMF AFTER PMF See https://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version for more details.
  13. 13. Traction Metrics = Value Metrics 14 Retention Revenue Created Value > Captured Value* • Actively using your product over an extended period of time • Changing their behaviour around your product • Exchanging something of value more than once (eg. money, time, attention, effort, social currency) Captured Value > Cost to Deliver Value* • You are getting paid • You have a business model that is working. *Ash Maurya, Scaling Lean (2016) p25
  14. 14. Getting to Product Market Fit
  15. 15. Before Product Market Fit Optimise for fast learning, and pivot if required to new markets, problems or solutions. 16
  16. 16. How do you get Product Market Fit? “Make things that people want.” -Paul Graham, Y- Combinator 17
  17. 17. Product Market Fit = 2 parts The Product The part you control. The Market The part you don’t control. 18 Start Experimenting Here
  18. 18. Before Product Market Fit Experiment …. Fail & Learn Experiment …. Fail & Learn Experiment …. Fail & Learn Experiment …. Succeed & Learn Repeat as required. 19
  19. 19. To create Customer Value, solve a problem. Find a sizable market that has a problem worth solving. Find out if they would exchange value to have it solved. 20 Ideate Explore Focus ImmerseDefine Build Prepare Launch Product Strategy and Lifecycle Management Described in more details in the Essentials of Product Management Course https://brainmates.com.au/training
  20. 20. Other Reading… 21 Customer Discovery Learn / Build / Measure loop MVP Lean Canvas
  21. 21. Understanding The 2 Market Trap 22
  22. 22. Start understanding your market What is the total Addressable Market? 23
  23. 23. Start understanding your market What % of that market do you think you can capture. 24
  24. 24. Start understanding your market As a Start Up You are here … 25 100% 0% TimeNow
  25. 25. Start understanding your market Except it is never a straight line… So you are probably here. 26 100% 0% TimeNow S-Curve
  26. 26. Start understanding your market The Customer Adoption Curve 27 100% 0% TimeNow Laggards Late Majority Early Majority Early Adopters Innovators Product Market Fit
  27. 27. Customer Adoption Curve 28Aka “Technology Adoption Lifecycle”. Geoffery A. More – Crossing the Chasm Product Market Fit
  28. 28. You have to “Cross the Chasm” 29Aka “Technology Adoption Lifecycle”. Geoffery A. More – Crossing the Chasm Product Market Fit CHASM
  29. 29. There are really 2 markets here for start ups 30Aka “Technology Adoption Lifecycle”. Geoffery A. More – Crossing the Chasm Product Market Fit CHASM
  30. 30. There are really 2 markets here 31 Product Market Fit CHASM 1) Early Adopter 2) Early Majority
  31. 31. Customer Types Innovators • Take Risk, often younger and can afford to fail. These folk are crazy! Early Adopters • Careful risk takers, They are the early Opinion Leaders. Early Majority • Considered actions, Listen to the opinions of the Early Adopters. 32
  32. 32. Why is this relevant to getting to Product Market Fit? 33Photo by Hans-Peter Gauster on Unsplash
  33. 33. You need to get Product Market twice! 34 Product Market Fit #2 CHASM 1) Early Adopter 2) Early Majority Product Market Fit #1
  34. 34. Actions for Customer Types Innovators • Offer first MVP’s and get feedback. Will soon lose interest and move to something else. Early Adopters • Optimise learning and iterate MVP’s to establish Product Market Fit #1. Early Majority • Use success with Early Adopters to attract Early Majority. Continue to iterate to gain Product Market Fit #2. 35
  35. 35. Keep Going! 36 Product Market Fit #2 CHASM Beware of a False Product Market Fit (#1) with Early Adopters. Use it to get the Real Product Market Fit (#2) with the Early Majority. Product Market Fit #1
  36. 36. CASE STUDY – CHEFIN’ Chefin’ sold their first early product to an Early Majority audience. “Feedback was horrible - we had to refund, lost money, lost a client” - Petko Petkov - Founder 37 CHASM
  37. 37. CASE STUDY – CHEFIN’ Listened to this talk, then …. “We repositioned the Chefin product to the Innovators and that is what is fuelling our growth today”. 38 CHASM
  38. 38. CASE STUDY – CHEFIN’ “We need the innovators to actually hit the early majority later from a referral & credibility perspective” 39 CHASM
  39. 39. Scaling beyond Product Market Fit
  40. 40. After Product Market Fit HANG ON! Optimise for growth and scale. Don’t lose Product Market Fit to a competitor! 41
  41. 41. Product Market Fit 42 Development Introduction Growth Maturity Decline ValueMetric Time Achieving Product Market Fit is the inflection point from “Introduction” to “Growth” in a Product’s Lifecycle BEFORE AFTER Product Market Fit
  42. 42. “Pirate Metrics” - AARRR 43 Acquisition Activation Retention Revenue Referral Growth Metric Growth Metric Growth Metric Traction Metric Traction Metric BEFORE PMF AFTER PMF AFTER PMF See https://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version for more details.
  43. 43. Summary Checklist for Product Market Fit 44
  44. 44. To Get to Product Market Fit ❑ Find a sizeable Market ❑ Identify a Problem worth solving ❑ Develop an MVP to solve it ❑ Find a business model to support it ❑ Test, Measure, Learn. ❑ Repeat! 45
  45. 45. Questions?
  46. 46. Nick Coster Co-founder and Head of Training @nickcoster | Nick@brainmates.com.au www.Brainmates.com.au 1800 272 466

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