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The Product Market Fit 
Cycle 
Carlos Eduardo Espinal (@cee) 
Partner | @seedcamp
Since 2007 
Over 140+ Companies 
Focusing on Product Market 
Fit 
Pre-Seed & Seed Investments
It’s human nature to focus on what 
you are good at not on what you suck 
at 
and… 
Most Founders/Hackers love building 
product 
Therefore…
Founders Sometimes 
· Get stuck optimizing a product’s features 
· Have metrics, but not deriving the right 
conclusions 
· Failing to hit Product Market Fit before cash 
runs out
Let’s pause that thought & define 
some concepts
What is Product / Market Fit? 
Poor conversions, no word of mouth, slow usage 
growth, long sales cycle, and high churn 
| 
“Customers are buying the product as fast as you 
can make it, or usage is growing as fast as you 
can add more servers.” - Marc. A.
Why do you want to create a company? 
· What is your vision? 
· What are your values? 
· What company culture do you want to instill?
Other than for making money… 
· On what basis will you make decisions? 
· What will you be looking for in people you hire? 
· what will motivate you through the hard times?
This is NOT just a cheesy 
catchphrase!
Your customer
Identifying a Minimum Viable Segment 
· Allows for better differentiation with out-group 
competing products 
· Allows for easier referrals in-group 
· Allows for efficient capital use in reaching your 
market
Case Study: The Amazon Kindle
Your Positioning 
“how you differentiate yourself in the 
mind of your prospect.”
In a highly competed market > 
Differentiate! 
Position well, or Re-position your 
competitors
Case Study: Commuting - Airline vs. 
Car 
Southwest Airlines 
The short-haul, no frills, and low-priced 
airline
Case Study: Cars - Quality vs. 
Experience 
Mercedes Benz vs. BMW 
Engineered like no other car in the 
world vs. The Ultimate driving 
machine
Your Product 
An MVP is more than just about the 
code
What Job does your 
product do for your 
customer?
How does your product reflect your values and 
your customer’s needs? 
· Quality 
· Packaging 
· Messaging 
· Customer Service
Product Focus Case Study: 
Customer Service 
Zappos
Your Go-to-Market 
Strategy
A Go-2-Market Strategy Includes 
· Pricing Strategies 
· Sales Strategies & Partnerships 
· Distribution Channels 
· Communication Channels
Your Analytics & KPIs
Picking up where we left 
off… 
What can sometimes be the problem?
It’s easy to miss one/all of these: 
1. Identifying a Minimum Viable Segment 
2. Defining a clear positioning strategy + MVP that 
represents it 
3. Testing of a complimentary go 2 market 
strategy 
4. Tracking the right metrics to refine your value 
proposition
Define a “target” (MVS) 
Create a “bullet” to hit it 
(positioning + product + go-2-market strategy)
The Product Market Fit 
Cycle
If (startup.status == product 
market fit) then startup.scale; 
| 
Else (inefficient_scaling);
Summary 
- Define your company’s core values & 
hire accordingly 
- Identify a MVS + Define your ‘Bullet’ - 
Positioning, MVP, & Go2Market
Summary 
- Test & Measure w/ Metrics 
- Iterate on MVS or one variable within 
your Bullet 
- Rinse & Repeat or Pivot until cash 
runs out
Thank you 
@cee 
http://www.seedcamp.com

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The Product Market Fit Cycle (Updated to v. 2.0)

  • 1. The Product Market Fit Cycle Carlos Eduardo Espinal (@cee) Partner | @seedcamp
  • 2. Since 2007 Over 140+ Companies Focusing on Product Market Fit Pre-Seed & Seed Investments
  • 3. It’s human nature to focus on what you are good at not on what you suck at and… Most Founders/Hackers love building product Therefore…
  • 4. Founders Sometimes · Get stuck optimizing a product’s features · Have metrics, but not deriving the right conclusions · Failing to hit Product Market Fit before cash runs out
  • 5. Let’s pause that thought & define some concepts
  • 6. What is Product / Market Fit? Poor conversions, no word of mouth, slow usage growth, long sales cycle, and high churn | “Customers are buying the product as fast as you can make it, or usage is growing as fast as you can add more servers.” - Marc. A.
  • 7. Why do you want to create a company? · What is your vision? · What are your values? · What company culture do you want to instill?
  • 8. Other than for making money… · On what basis will you make decisions? · What will you be looking for in people you hire? · what will motivate you through the hard times?
  • 9.
  • 10. This is NOT just a cheesy catchphrase!
  • 12. Identifying a Minimum Viable Segment · Allows for better differentiation with out-group competing products · Allows for easier referrals in-group · Allows for efficient capital use in reaching your market
  • 13. Case Study: The Amazon Kindle
  • 14. Your Positioning “how you differentiate yourself in the mind of your prospect.”
  • 15. In a highly competed market > Differentiate! Position well, or Re-position your competitors
  • 16. Case Study: Commuting - Airline vs. Car Southwest Airlines The short-haul, no frills, and low-priced airline
  • 17. Case Study: Cars - Quality vs. Experience Mercedes Benz vs. BMW Engineered like no other car in the world vs. The Ultimate driving machine
  • 18. Your Product An MVP is more than just about the code
  • 19. What Job does your product do for your customer?
  • 20. How does your product reflect your values and your customer’s needs? · Quality · Packaging · Messaging · Customer Service
  • 21. Product Focus Case Study: Customer Service Zappos
  • 23. A Go-2-Market Strategy Includes · Pricing Strategies · Sales Strategies & Partnerships · Distribution Channels · Communication Channels
  • 25.
  • 26. Picking up where we left off… What can sometimes be the problem?
  • 27. It’s easy to miss one/all of these: 1. Identifying a Minimum Viable Segment 2. Defining a clear positioning strategy + MVP that represents it 3. Testing of a complimentary go 2 market strategy 4. Tracking the right metrics to refine your value proposition
  • 28. Define a “target” (MVS) Create a “bullet” to hit it (positioning + product + go-2-market strategy)
  • 29. The Product Market Fit Cycle
  • 30.
  • 31. If (startup.status == product market fit) then startup.scale; | Else (inefficient_scaling);
  • 32. Summary - Define your company’s core values & hire accordingly - Identify a MVS + Define your ‘Bullet’ - Positioning, MVP, & Go2Market
  • 33. Summary - Test & Measure w/ Metrics - Iterate on MVS or one variable within your Bullet - Rinse & Repeat or Pivot until cash runs out
  • 34. Thank you @cee http://www.seedcamp.com