Rishi Dean
                                          rishi@rishidean.com
                                          www.ris...
Founding
member
of:



                                   Other
experiences:



    Formal
&
informal
start‐up
advisor
(EI...
6
out
of

1,000
funded


                         60%
fail 
30%
flounder

                                    ,




       ...
Rishi
Dean
–
www.rishidean.com
   4

1)         Why
did
you
fail?


 2)         Why
did
you
run
out
of
money?


 3)         Why
do
you
have
no
customers?


 4)...
*





   Start
with
a
firm
vision

   Design
&
develop
specifications
    FAIL
   Follow
a
“waterfall”
development
model...
Rishi
Dean
–
www.rishidean.com
   7

  Globalization
increases
competition


   Lower
technical
barriers
to
entry


   Increased
capital
efficiency

   Cost
...
Rishi
Dean
–
www.rishidean.com
   9

Rishi
Dean
–
www.rishidean.com
   10

Rishi
Dean
–
www.rishidean.com
   11

Rishi
Dean
–
www.rishidean.com
   12

    Engineers
want
to
build
for
mass
adoption
by
providing
a
high

      performance
and
responsive
system
that
will
“sat...
BEFORE
                        AFTER

                Product
/
Market
Fit
           Product
/
Market
Fit



          C...
Rishi
Dean
–
www.rishidean.com
   15

Market
/
Pain
Understanding

                                                                                             ...
Market
/
Pain
Understanding


                                                                                            ...
Market
/
Pain
Understanding


                                                                                            ...
1)
Rapid
Prototyping:
gain
feedback
fast
                      2)
Cut
to
the
core:
it’s
hard
to
take
away



             ...
Market
/
Pain
Understanding
                                      Locate
key
markets
with

                              ...
How
much
better
is
your
innovation
than
the

1)
 Relative
Advantage
           incumbent
solution?

                      ...
Market
/
Pain
Understanding
                              Lead
users

are
easiest

                                      ...
Source:
IDEO

                                  Also
see:
http://bit.ly/webdesignthinking



Rishi
Dean
–
www.rishidean.co...
Market
/
Pain
Understanding
                                  Fundamental
feedback

                                     ...
Source:
Steve
Blank,
4
Steps
to
Epiphany





Rishi
Dean
–
www.rishidean.com
                                          25

Market
/
Pain
Understanding
                                 Works
in
incremental
or

                                   ...
Rishi
Dean
–
www.rishidean.com
   27

  Embrace
ignorance

   Characterize
your
situation

   Pick
the
right
starting
point
and
employ
the

      requisite
a...
Blogs

   Lean
Startup:
http://startuplessonslearned.com


   Customer
Dev’t:
http://steveblank.com


 Lots
more
like
Da...
  E‐mail: 
rishi@rishidean.com

   Blog:   
rishidean.com

   Twitter:
@rishidean





Rishi
Dean
–
www.rishidean.com
 ...
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Finding Product / Market Fit: Introducing the PMF Matrix - Presentation by Rishi Dean to MIT Sloan Breakfast Club

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These slides were used to facilitate a discussion of entrepreneurial MIT alums, mainly from the MIT Sloan business school. My intention was to introduce many of the newer, leaner concepts of early stage start-up development to a group that often sees "technology first" businesses.

This presentation centers on the concept of Product / Market Fit: what it is, why it's important, and how to achieve it. I propose my "Product Market Fit Matrix" that helps to characterize the issues of the start-up and presents various frameworks that can help guide development. In a sense the Product / Market Fit Matrix is a meta-framework.

For more information please visit: http://www.rishidean.com

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Finding Product / Market Fit: Introducing the PMF Matrix - Presentation by Rishi Dean to MIT Sloan Breakfast Club

  1. 1. Rishi Dean rishi@rishidean.com www.rishidean.com [ Using the PMF Matrix to uncover your killer app ] MIT Sloan Breakfast Club March 12, 2010
  2. 2. Founding
member
of:
 Other
experiences:
 Formal
&
informal
start‐up
advisor
(EIR
@MIT)
 Hundreds
of
product
cycles…with
scars
to
prove
it
 Rishi
Dean
–
www.rishidean.com
 2

  3. 3. 6
out
of

1,000
funded
 60%
fail 
30%
flounder
 , <10%
+
returns <1%
get
big
 ,
 Source:
 .01%
”major
success”
 http://bit.ly/ startupfailurerates
 Rishi
Dean
–
www.rishidean.com
 3

  4. 4. Rishi
Dean
–
www.rishidean.com
 4

  5. 5. 1)  Why
did
you
fail?

 2)  Why
did
you
run
out
of
money?

 3)  Why
do
you
have
no
customers?

 4)  Why
did
they
have
unfilled
needs?
 5)  Why
did
you
not
achieve
product
/
market
fit?
 Unchecked
false
assumptions
kill
companies
 Rishi
Dean
–
www.rishidean.com
 5

  6. 6. *
   Start
with
a
firm
vision
   Design
&
develop
specifications
 FAIL   Follow
a
“waterfall”
development
model
   Converge
to
a
massive
“launch”
 Source:

   Let
the
sales
roll
in
 Steve
Blank,
The
4
Steps
 to
Epiphany
 Rishi
Dean
–
www.rishidean.com
 6

  7. 7. Rishi
Dean
–
www.rishidean.com
 7

  8. 8.   Globalization
increases
competition

   Lower
technical
barriers
to
entry

   Increased
capital
efficiency
   Cost
of
acquisition
is
near
zero

 Markets
evolve
faster
 ‘Revolutionary’
innovation
is
harder
 Rishi
Dean
–
www.rishidean.com
 8

  9. 9. Rishi
Dean
–
www.rishidean.com
 9

  10. 10. Rishi
Dean
–
www.rishidean.com
 10

  11. 11. Rishi
Dean
–
www.rishidean.com
 11

  12. 12. Rishi
Dean
–
www.rishidean.com
 12

  13. 13.   Engineers
want
to
build
for
mass
adoption
by
providing
a
high
 performance
and
responsive
system
that
will
“satisfy”
customers
   Fear
that
releasing
“junk”
too
early
will
tick
off
customers
and
kill
the
 company
   But
you
don’t
know
what
customers
want,
nor
their
access
 patterns,
until
you
release
a
“suboptimal”
product
   If
you
release
a
“fully
operational”
system
too
late,
it
may
not
 conform
to
what
user’s
want
and
you’ve
optimized
for
the
wrong
 thing

don’t
build
the
elegant
thing
no
one
will
use
   Get
feedback.
Learn
fast.
Move
fast…after
all,
you’re
a
startup,
 right?
 Source:
http://bit.ly/engineersparadox
 Rishi
Dean
–
www.rishidean.com
 13

  14. 14. BEFORE
 AFTER
 Product
/
Market
Fit
 Product
/
Market
Fit
   Customer
discovery
&
   Build
the
sales,
 validation
 marketing,
and
delivery
   Measure,
iterate,
pivot
 machine
   Burn
as
little
as
possible
   Build
the
company

 to
survive
   Get
big,
fast
 But,
how
do
you
find
Product
/
Market
fit?
 See:

 http://bit.ly/8YwPIn

 Rishi
Dean
–
www.rishidean.com
 14

  15. 15. Rishi
Dean
–
www.rishidean.com
 15

  16. 16. Market
/
Pain
Understanding
   Figure
out
where
you
really
 are
 Product
/
Remedy
Understanding
 “Good
hypothesis,
no
   Different
resources
and
 Weak
 “Many
right
answers”
 conclusions”
 inputs
will
determine
your
 starting
point
   Where
you
are
should
 dictate
milestones,
 revenue
projections,
 funding
requirements,
etc.
 Strong
 “Build
it
and
they
will
 “Technology
in
 come”
 search
of
a
problem”
   Assume
you
know
less
 than
you
do,
until
revenue
 proves
otherwise
 Strong
 Weak
 Rishi
Dean
–
www.rishidean.com
 16

  17. 17. Market
/
Pain
Understanding
   You
will
move
between
 Product
/
Remedy
Understanding
 blocks
as
business
/
market
 “Good
hypothesis,
no
 evolve,
or

diversity
across
 Weak
 “Many
right
answers”
 conclusions”
 product
lines
   You
can
remove
 uncertainty
over
time,
but
 uncover
others
as
you
dig
 deeper
 Strong
 “Build
it
and
they
will
 “Technology
in
 come”
 search
of
a
problem”
 Strong
 Weak
 Rishi
Dean
–
www.rishidean.com
 17

  18. 18. Market
/
Pain
Understanding
   Most
start‐ups
being
with
a
 Product
/
Remedy
Understanding
 great
deal
of
uncertainty
–
 “Good
hypothesis,
no
 goal
is
the
same,
but
 Weak
 “Many
right
answers”
 conclusions”
 starting
point
differs
 depending
on
available
 resources
   Not
mutually
exclusive
 models
–
overlapping
 principles:
 Strong
 “Build
it
and
they
will
 “Technology
in
 come”
 search
of
a
problem”
   Prototyping
   Customer
development
   MVP
 Strong
 Weak
 Rishi
Dean
–
www.rishidean.com
 18

  19. 19. 1)
Rapid
Prototyping:
gain
feedback
fast
 2)
Cut
to
the
core:
it’s
hard
to
take
away

 Subjective
 Value
 (Utility)
 LOSSES
 GAINS
 See:

http://bit.ly/prototyping
 See:

http://bit.ly/prospecttheory
 3)
Measure
Everything:
understand
what
 works,
and
more
importantly
‐
what
doesn’t
 Source
(Dave
McClure):

 http://www.500hats.com
 Rishi
Dean
–
www.rishidean.com
 19

  20. 20. Market
/
Pain
Understanding
   Locate
key
markets
with
 compelling
dynamics
   “Where
else
would
it
 Product
/
Remedy
Understanding
 work?”
 “Good
hypothesis,
no
 Weak
 “Many
right
answers”
 conclusions”
   Pick
a
few
applications
/
 markets
and
identify
a
 hypothesis
to
solve
for
   Look
for
markets
primed
 for
speed
of
innovation
 Why
Not?
 diffusion
 Strong
 “Build
it
and
they
will
 Rigorous
market
exploration
 come”
   Understand
the
flow
of
$
 “Technology
w/o
a
problem”
 and
inject
into
an
existing
 pattern
 Strong
 Weak
 Rishi
Dean
–
www.rishidean.com
 20

  21. 21. How
much
better
is
your
innovation
than
the
 1)
 Relative
Advantage
 incumbent
solution?
 How
easily
can
your
innovation
fit
with
the
 2)
 Compatibility
 existing
infrastructure
and
ecosystem?
 Is
your
innovation
easy
to
adopt
and
use,
 3)
 Complexity
 relative
to
the
current
method?
 How
easily
can
customers
see
the
 4)
 Observability
 differentiation
and
benefits
of
your
product?
 How
easy
can
customers
pilot
or
test
your
 5)
 Trialability
 product?
 Does
your
product
impact
current
social
 6)
 Social
Acceptability
 norms?
 Are
there
legal
or
bureaucratic
issues
related
to
 7)
 Regulatory
 your
innovation?
 Source:
http://bit.ly/innovationdiffusion
 Rishi
Dean
–
www.rishidean.com
 21

  22. 22. Market
/
Pain
Understanding
   Lead
users

are
easiest
 path:
transform
an
ad‐hoc
 solution
to
something
 Product
/
Remedy
Understanding
 Design
Thinking
 mainstream
 “Good
hypothesis,
no
 Weak
 Design
Thinking
+
Agile
 conclusions”
   “Imaginary
assistant”
 “Many
right
answers”
 notion
 Strong
 “Build
it
and
they
will
 “Technology
in
 come”
 search
of
a
problem”
 Strong
 Weak
 See:

http://bit.ly/webdesignthinking

 Rishi
Dean
–
www.rishidean.com
 22

  23. 23. Source:
IDEO
 Also
see:
http://bit.ly/webdesignthinking

 Rishi
Dean
–
www.rishidean.com
 23

  24. 24. Market
/
Pain
Understanding
   Fundamental
feedback
 loop
powers
all
startups:
 Product
/
Remedy
Understanding
 Lean
Startup
 IDEAS
 Weak
 Customer
+
Agile
Dev’t
 “Many
right
answers”
 LEARN
 BUILD
 “Fail
small,
fail
fast”
 DATA
 CODE
 MEASURE
 Strong
 “Build
it
and
they
will
 “Technology
in
 come”
 search
of
a
problem”
   Minimizes
total
time
 through
this
loop
until
you
 figure
“it”
out
 Strong
 Weak
 See:

http://startuplessonslearned.com
 Rishi
Dean
–
www.rishidean.com
 24

  25. 25. Source:
Steve
Blank,
4
Steps
to
Epiphany
 Rishi
Dean
–
www.rishidean.com
 25

  26. 26. Market
/
Pain
Understanding
   Works
in
incremental
or
 evolutionary
innovation
 Product
/
Remedy
Understanding
   Slicker,
quicker,
better,
 “Good
hypothesis,
no
 cheaper
 Weak
 “Many
right
answers”
 conclusions”
   Technology‐driven
 problems
(e.g.
cure
cancer,
 build
a
teleporter)
   There
are
special
cases
 Product
Development
 where
a
firm
vision
(be
the
 Strong
 Waterfall
–
but
agile
too
 “Technology
in
 search
of
a
problem”
 customer)
+
iterative
 “Build
it
and
they
will
come”
 releases
can
work
well

 (e.g.
37Signals)
 Strong
 Weak
 Rishi
Dean
–
www.rishidean.com
 26

  27. 27. Rishi
Dean
–
www.rishidean.com
 27

  28. 28.   Embrace
ignorance
   Characterize
your
situation
   Pick
the
right
starting
point
and
employ
the
 requisite
approaches
to
find
PMF
   Set
the
business
goals
accordingly
   Common
themes:
prototype,
listen,
measure,
 learn,
iterate
   Traverse
the
matrix
   THEN
scale
up
the
business
 Rishi
Dean
–
www.rishidean.com
 28

  29. 29. Blogs
   Lean
Startup:
http://startuplessonslearned.com

   Customer
Dev’t:
http://steveblank.com

 Lots
more
like
Dave
McClure,
Sean
Ellis,
Brant
Cooper,
Andrew
Chen,
Diego
Rodriguez
 Books
 Customer
Dev’t
 Design
 Design
for
 Tech
in
search
 Prod
Dev’t
 Bible
 Thinking
 techies
 of
a
problem
 done
right
 Rishi
Dean
–
www.rishidean.com
 29

  30. 30.   E‐mail: 
rishi@rishidean.com
   Blog: 
rishidean.com
   Twitter:
@rishidean
 Rishi
Dean
–
www.rishidean.com
 30


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