Product Market Fit Explained (Clear & Concise)

May 14, 2021

If you want to learn more about product/market fit, you came to the right place.

 

In this article, you’ll get product market fit explained in a clear and understandable way.

 

Product/Market Fit is the degree to which a product satisfies a strong market demand. Here’s a pyramid that summarizes the product market/fit concept.

 

In this context, the market section is comprised of the following elements:

  • Target Customer – these are users that will most likely benefit from your product; you’ll want to create a profile of your ideal customer
  • Underserved Needs – these are needs that aren’t being served adequately by companies in a market or industry

 

Also in this context, the product section is comprised of the following elements:

  • Value Proposition – this is your plan for how your product will meet customer needs better than the alternatives
  • Features - after you define your value proposition, specify what functionality your minimal viable product will include
  • User Experience (In other words, Testing your Minimal Viable Product with Customers) – this involves soliciting feedback from potential customers with the use of surveys, one-on-one interviews, group interviews, and more.

 

How to measure Product/Market Fit

Ask yourself these questions to measure how well your product satisfies a market:

  • Have you validated that the needs that you believe your customers have really exist?
  • Are the needs of your customers important or urgent enough for them to purchase from you?
  • How adequately do the functionalities of your product address the needs of your customers?
  • How well are customers interacting with your marketing efforts?
  • How quickly do customers make up their minds about a purchase?
  • What is your customer retention rate? This is the rate at which customers maintain a relationship with your business.
  • What percentage of customers have unsubscribed or stopped using your product?

  

Resources:

📚 "The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses" – Eric Ries
https://amzn.to/3o3E73m

📚 "The Four Steps to the Epiphany: Successful Strategies for Products that Win" –  Steve Blank
https://amzn.to/3f9sp3h

📚 "Running Lean: Iterate from Plan A to a Plan That Works" – Ash Maurya
https://amzn.to/3y4cFag

📚 "Testing Business Ideas: A Field Guide for Rapid Experimentation" - David J. Bland & Alexander Osterwalder
https://amzn.to/3f1H9kw

📚 "The Lean Product Playbook: How to Innovate with Minimum Viable Products and Rapid Customer Feedback" - Dan Olsen
https://amzn.to/3bhnT1y

 

Some links in this article are affiliate links.

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