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By
Chetan Kumar
For Microsoft Ventures, MasterClass – July 15th 2015
Who Am I?
• Mentor at Microsoft Ventures
• Entrepreneur – Entertainment discovery startup with a batchmate
• Former Director – Consumer Electronics at Flipkart
• Former APAC lead for mobile banking products at Citibank
• Held roles in strategy, product, operations & marketing globally (US, SE Asia)
• MBA from Kellogg School of Management
• CA (a long time ago!!)
Twitter: @chetan226
Email: kumarchetan@gmail.com
Why the fuss about PMF?
•Over 40% startups fail due to lack of a good ‘market’ - That’s more than any other
reason (including funding, team, timing, etc.)
•I think of PMF as a concept to guide the limited Time, Money and Resources
towards a focused solution-oriented objective.
Marc Andreessen “Product/market fit means being in a good market with a product
that can satisfy that market.”
What we will cover in today’s session
• Breakdown the product-market fit components
• Address key questions for each component
• Discuss case examples
• Summarize takeaways in a self-evaluation worksheet
• Q&A
These are my views and are neither exhaustive nor conclusive!
Who came first?
THE PRODUCTTHE MARKET
• In my view: The market is the ‘why’ and the product is the ‘how’
• The market may be evident or latent, but exists!
• The product therefore, is a solution to an….
Articulated
problem
Unarticulated
problem
OR
The Wrigley’s Story
Started as a soap
salesman
Offered baking soda cans
as ‘premiums’ to
merchants
Baking soda was so
popular, he switched to
this business
Gave an offer of free gum
which was a hit
From soap to baking
soda to chewing gum,
Wrigley’s followed the
market!
Defining the Market
• Who is the market?
• Who is the ideal target
[within this market]
• More qualitative
Positioning
• Throwing a ‘net’ around
the market
• Having a point of view
• More quantitative
Sizing
Defining the Market
• Who is the market?
• Who is the ideal target [within this
market]
• More qualitative
Positioning
• Throwing a ‘net’ around the market
• Having a point of view
• More quantitative
Sizing
For World Wide Web users who enjoy books, Amazon.com is a retail
bookseller that provides instant access to over 1.1 million books.
Unlike traditional book retailers, Amazon.com provides a combination
of extraordinary convenience, low prices, and comprehensive
selection.
TRADITIONAL MARKETING POSITIONING
For ____________ (target customer) who ____________ (statement of
the need or opportunity), our (product/service name) is ____________
(product category) that (statement of benefit) ____________ .
Facebook’s mission is to give people the
power to share and make the world
more open and connected.
…to offer designer eyewear at a
revolutionary price, while leading
the way for socially conscious
businesses.
(in 2001)
Defining the Market
•Some approaches to defining the market size:
• Industry reports
• Me too’s globally
• Bottom’s Up or Top Down
• Drawing a parallel
• Innovating on a market created by some other product
• Defining a new market (less used)
No perfect answer, but one must have a point of view.
TODAY TOMORROW
$5Bn
$12Bn
$10Bn
$20Bn
*Illustrative based on public reports
• Who is the market?
• Who is the ideal target [within this
market]
• More qualitative
Positioning
• Throwing a ‘net’ around the market
• Having a point of view
• More quantitative
Sizing
So what is the question?
A NEED A WANT
….To which your product is the solution?
ARTICULATEDUNARTICULATED
Your
Idea?
Lower
costs
Overtime
Commoditization
Types of solutions
•Cost
•Efficiency
•Convenience
•Transparency
•Information sorting (Search,
Discovery, Reviews, Listings)
•Other? (List your own……..)
Example Core solution
Uber, Ola All of the above
AirBnB Cost
Twitter Information
Zomato Information
You improve your chances by solving deeper for a few things at first
Shared
Economy
Marketpl
ace
Crowd
Sourced
Platform Other
Manifestations
MVP & Positioning
Rome wasn’t built in a day………..
Early stage Current Positioning
Air BnB Stay, B’fast @low
cost
Photography, insurance,
home cleaning, Key
mgmt., etc
More than a place
to stay at a low
cost
Slack Corporate
messaging (search,
sync, file share)
Full CRM, support for all
channels, easy
integrations, etc.
Reduction in cost
of communication,
less email
Uber Solved taxi hailing
experience
Luxury cars to
Helicopters to grocery
Makes it easy not
to own a car
Snapchat Private messaging
with photos
Stories, Advertising, etc Social app without
the history
Flipkart Books Everything! Online megastore
The ‘Viable’ in the MVP is perhaps more critical than the product itself
Source: growthhackers.com, web
Competition & Pitfalls
Competition:
“If we can keep our competitors focused on us while we stay focused on
the customer, ultimately we'll turn out all right.” – Jeff Bezos
“You can only avoid competition by avoiding good ideas.” – Paul Graham
Timing: Too Early or Too Late?Funding: Raise enough money to get to PMF
and each time until you do, after that it should
get much easier
Team:
“When a great team meets a lousy market, market wins.
When a lousy team meets a great market, market wins.
When a great team meets a great market, something special happens.”
-Marc Andreessen quoting Rachleff's Law of Startup Success
&..Targeting, Product Vs Problem centricity
3 mini Case Studies
Problem/
Desire
Market
Product
Approach
Competition
Hard to find good
Japanese food
News in local language
for migrants unavailable
Recharges meant
physical visits/ coupons/
cash
Urban rich: 1% of
urban popl. ~ 1MM
Literate migrant
workforce ~ 100MM
Urban mobile
subscribers ~ 400MM
Sushi delivered at
home via App
Content aggregated on
App
Mobile wallet
Target the market via
special partners,
advt., quality, etc
Launched across mobile
platforms; got word of
mouth traction
Initially, targeted only
recharges, then products
and services. Mass Advt.
Other cuisines
delivery
Launched across mobile
platforms; got word of
mouth traction
Initially, targeted only
recharges, then products
and services. Mass Advt.
All illustrative figures
Worksheet
What problem are we solving? Articulated/Unarticulated
What is the market for this solution? (positioning + size)
How will the product address this problem for the target market?
What is the degree to which I must solve (MVP to next version)?
What do I know about competition and other factors?
My biggest area of work in the next 3-6 months is:
My two most critical resource requirements are:
Summary
•PMF is a process, a journey not an event!
•Address a need or a want, but one that is not a
marginal problem
•Have an going in hypothesis of the market size
•Build as deep a solution as possible (MVP)
•Be ready to iterate, change, pivot
•PMF doesn’t mean perfection
•Goal is to get to that ‘fit’ in shortest time!
Thank you!
Twitter: @chetan226
Email: kumarchetan@gmail.com

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MasterClass - Product Market Fit

  • 1. By Chetan Kumar For Microsoft Ventures, MasterClass – July 15th 2015
  • 2. Who Am I? • Mentor at Microsoft Ventures • Entrepreneur – Entertainment discovery startup with a batchmate • Former Director – Consumer Electronics at Flipkart • Former APAC lead for mobile banking products at Citibank • Held roles in strategy, product, operations & marketing globally (US, SE Asia) • MBA from Kellogg School of Management • CA (a long time ago!!) Twitter: @chetan226 Email: kumarchetan@gmail.com
  • 3. Why the fuss about PMF? •Over 40% startups fail due to lack of a good ‘market’ - That’s more than any other reason (including funding, team, timing, etc.) •I think of PMF as a concept to guide the limited Time, Money and Resources towards a focused solution-oriented objective. Marc Andreessen “Product/market fit means being in a good market with a product that can satisfy that market.” What we will cover in today’s session • Breakdown the product-market fit components • Address key questions for each component • Discuss case examples • Summarize takeaways in a self-evaluation worksheet • Q&A These are my views and are neither exhaustive nor conclusive!
  • 4. Who came first? THE PRODUCTTHE MARKET • In my view: The market is the ‘why’ and the product is the ‘how’ • The market may be evident or latent, but exists! • The product therefore, is a solution to an…. Articulated problem Unarticulated problem OR
  • 5. The Wrigley’s Story Started as a soap salesman Offered baking soda cans as ‘premiums’ to merchants Baking soda was so popular, he switched to this business Gave an offer of free gum which was a hit From soap to baking soda to chewing gum, Wrigley’s followed the market!
  • 6. Defining the Market • Who is the market? • Who is the ideal target [within this market] • More qualitative Positioning • Throwing a ‘net’ around the market • Having a point of view • More quantitative Sizing
  • 7. Defining the Market • Who is the market? • Who is the ideal target [within this market] • More qualitative Positioning • Throwing a ‘net’ around the market • Having a point of view • More quantitative Sizing For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, Amazon.com provides a combination of extraordinary convenience, low prices, and comprehensive selection. TRADITIONAL MARKETING POSITIONING For ____________ (target customer) who ____________ (statement of the need or opportunity), our (product/service name) is ____________ (product category) that (statement of benefit) ____________ . Facebook’s mission is to give people the power to share and make the world more open and connected. …to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses. (in 2001)
  • 8. Defining the Market •Some approaches to defining the market size: • Industry reports • Me too’s globally • Bottom’s Up or Top Down • Drawing a parallel • Innovating on a market created by some other product • Defining a new market (less used) No perfect answer, but one must have a point of view. TODAY TOMORROW $5Bn $12Bn $10Bn $20Bn *Illustrative based on public reports • Who is the market? • Who is the ideal target [within this market] • More qualitative Positioning • Throwing a ‘net’ around the market • Having a point of view • More quantitative Sizing
  • 9. So what is the question? A NEED A WANT ….To which your product is the solution? ARTICULATEDUNARTICULATED Your Idea? Lower costs Overtime Commoditization
  • 10. Types of solutions •Cost •Efficiency •Convenience •Transparency •Information sorting (Search, Discovery, Reviews, Listings) •Other? (List your own……..) Example Core solution Uber, Ola All of the above AirBnB Cost Twitter Information Zomato Information You improve your chances by solving deeper for a few things at first Shared Economy Marketpl ace Crowd Sourced Platform Other Manifestations
  • 11. MVP & Positioning Rome wasn’t built in a day……….. Early stage Current Positioning Air BnB Stay, B’fast @low cost Photography, insurance, home cleaning, Key mgmt., etc More than a place to stay at a low cost Slack Corporate messaging (search, sync, file share) Full CRM, support for all channels, easy integrations, etc. Reduction in cost of communication, less email Uber Solved taxi hailing experience Luxury cars to Helicopters to grocery Makes it easy not to own a car Snapchat Private messaging with photos Stories, Advertising, etc Social app without the history Flipkart Books Everything! Online megastore The ‘Viable’ in the MVP is perhaps more critical than the product itself Source: growthhackers.com, web
  • 12. Competition & Pitfalls Competition: “If we can keep our competitors focused on us while we stay focused on the customer, ultimately we'll turn out all right.” – Jeff Bezos “You can only avoid competition by avoiding good ideas.” – Paul Graham Timing: Too Early or Too Late?Funding: Raise enough money to get to PMF and each time until you do, after that it should get much easier Team: “When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens.” -Marc Andreessen quoting Rachleff's Law of Startup Success &..Targeting, Product Vs Problem centricity
  • 13. 3 mini Case Studies Problem/ Desire Market Product Approach Competition Hard to find good Japanese food News in local language for migrants unavailable Recharges meant physical visits/ coupons/ cash Urban rich: 1% of urban popl. ~ 1MM Literate migrant workforce ~ 100MM Urban mobile subscribers ~ 400MM Sushi delivered at home via App Content aggregated on App Mobile wallet Target the market via special partners, advt., quality, etc Launched across mobile platforms; got word of mouth traction Initially, targeted only recharges, then products and services. Mass Advt. Other cuisines delivery Launched across mobile platforms; got word of mouth traction Initially, targeted only recharges, then products and services. Mass Advt. All illustrative figures
  • 14. Worksheet What problem are we solving? Articulated/Unarticulated What is the market for this solution? (positioning + size) How will the product address this problem for the target market? What is the degree to which I must solve (MVP to next version)? What do I know about competition and other factors? My biggest area of work in the next 3-6 months is: My two most critical resource requirements are:
  • 15. Summary •PMF is a process, a journey not an event! •Address a need or a want, but one that is not a marginal problem •Have an going in hypothesis of the market size •Build as deep a solution as possible (MVP) •Be ready to iterate, change, pivot •PMF doesn’t mean perfection •Goal is to get to that ‘fit’ in shortest time!
  • 16. Thank you! Twitter: @chetan226 Email: kumarchetan@gmail.com

Editor's Notes

  1. Market is hard to target