What It Is & Consequences For Founders Who Aren’t Aware of the Concept
In the fast-paced business world, it is essential that you understand key terms and how they can impact your operations and profits. With that in mind, we are going to discuss the term product-market fit and why it is important in your business.
The term product-market fit was popularised in the mid 2000’s by Marc Andreseen – one of the founders of Andreseen Horowitz, who defined it as the “degree to which a product satisfies a strong market demand”. Andy Rachleff – the founder of Don Valentine, spoke of product-market fit as “the only thing that matters.” Clearly, it is an extremely important business concept.
These three factors must align in order to achieve product-market fit:
- Company’s value proposition
- Customers
- Distribution channels
Without these three factors working together in perfect harmony, you are unlikely to achieve your long-term business goals and objectives.
What are some signs that you have achieved product-market fit?
- Your customers buy the product faster than you can manufacture it.
- If your product disappears from the market, at least 40% of your customers will be disappointed to see it go. In other words, you have created a must-have item or service.
Some of the steps you may want to take if you are determined to achieve product-market fit are:
- Identifying your target audience.
- Gathering intelligence on your product to find out how much potential customers are willing to pay for a solution.
- Understanding your value proposition to determine which customer needs you can best address.
If you have achieved product-market fit, then you should notice that you maintain a steady stream of revenue. Whereas your business will not be as profitable if you have not achieved product-market fit.
To further familiarise yourself with the term, here is a useful article by 25iq, who, from their experience outlined a dozen lessons about product-market fit.
Yay!Starter Marketing specialises in creating a powerful digital marketing strategy whether you are an eCommerce business, FinTech start-up or an eLearning course provider. Our digital marketing strategy will build brand awareness and get your product in front of your intended customers as we will work with you and gain a deep understanding of your product and brand.
If you would like to receive a free evaluation of your digital marketing strategy or need help with product-market fit, do not hesitate to get in touch with us.