The success or failure of a startup is often determined by its ability to achieve product-market fit. It is therefore an important step and crucial milestone that every founder should focus on. If you haven’t achieved product-market fit then you are yet to validate the viability of your startup long-term.
What is Product Market Fit?
Product market fit is achieved by a startup when they have produced a product that is saleable and desirable to a decent-sized market. Seems straightforward to understand. However, identifying exactly when this has been achieved is subjective and therefore not well defined. For example, what are the minimum revenue requirements and the potential addressable market size?
Which is more important: Product or Market?
So when trying to achieve product-market fit, what is more important? The product or the market. Well in my experience both are important but no matter how good the product is it won’t be successful in a bad market. By contrast, a bad product can still be successful in a good enough market.
How do you achieve Product Market Fit?
The key to achieving product-market fit comes from your team. Your tech startup needs to have a team that knows how to produce a great product and deliver that to market. This is an iterative process that involves refining your understanding of the customer’s problem and aligning your product to fix it. The ideal market is those who would say that they would be disappointed if your product was no longer available.
As stated before you can measure it by determining a target revenue that demonstrates product viability and a target market that is sufficiently sized to grow into.
TAKEAWAY: Product market fit is a milestone that defines success for every startup. However, this milestone must be reached before a startup begins to scale. It is achieved only through the hard work of a quality startup team.