Back to perspectives
Product Market Fit (PMF) perpetuates a fallacy: product comes first. There’s a reason this well-worn founder trope exists–first-time founders worry about product, second time founders worry about GTM. Of course, there’s plenty of room for products to improve, but markets are the true arbiter of value.
The market side of product market fit (PMF) is a large part of why 63% of tech startups fail. And why we advocate a conceptual reframe to MARKET-product fit (MPF).
A good idea isn’t the same as a product that sells itself. When you put ideas in front of customers, they evolve. Take the same idea, and a CISO of a 100,000 person company will have different views on what matters most versus a CISO at a 1,000 person company. Which do you adjust: the market side or the product?
The iterative work of connecting markets to product is especially hard for pre-product or pre-revenue startups. Teams don’t realize how attached they are to their product ideas and try to validate them vs. rethink their approach.
In the world of B2B startups, the goal is simple: solve a problem a buyer is prioritizing enough that they’re willing to pay money to YOU, a no-name startup. But even if you find a good problem, no amount of product awesome can overcome customers not understanding why they should care. Or why they should listen to you over the hundreds of other companies crowding their inboxes.
How do you know if you lack market product fit? If you don’t yet have a repeatable revenue fly-wheel–even if your product has some adoption–that might be a sign you haven’t yet found it. And because markets always evolve, you might need to re-find MPF to realign with where buyers and budgets have moved.
Getting to MPF for early stage startups often takes counter-intuitive work. This is a two-part series where we’ll share lessons learned and what the work looks like in early stage startups.
- Build with the market you can get, not an ideal customer
- Own point-of-view before you have product.
- Don’t get too focused too early; throw away ideas to find focus.
- Focus on conversations, not sales.
- When it comes to messaging, today > tomorrow.
- PLG is not a GTM, it’s a channel
- It’s not just adoption; look at speed and friction.
- Pricing: don’t focus on what you charge. Focus on how.
Build with the market you can get, not an ideal customer (a.k.a. don’t overthink ICP)
SGNL solves a huge problem (access management) experienced by huge enterprises, using an approach they’d already built at Google. So the ideal customer is a large enterprise, right?
But when they took the idea to the market, they experienced friction. Who owned the problem in an organization wasn’t the same across companies. While security teams were a good strike zone, it was a specific AWS use case that unlocked their first two customers. Two of their early companies couldn’t have been more different: one was a 200-person company, the other a 200,000-person company.
SGNL adjusted messaging, industry category, target customer(s), customer segments—all market parts–countless times before they landed on their current mix, all while keeping their product vision relatively stable. They’re still iterating but focused on the use cases that have the most value to customers.
The lesson: Until you have customers, your ‘market’ is only theoretical. Don’t get overly attached to who you think your ideal customer is before your first 5-10 customers. Do customer and product discovery together, then adapt both how you talk about your product and what you build. Remember it’s the market work that creates the context in which customers understand why your product is valuable to them.
Own point-of-view before you have a product
Delphina is building the equivalent of a junior data scientist. It’s an ambitious idea, and building their product will take more than a year. While their users live inside data science organizations, the people green-lighting those budgets do not. And most won’t understand how hard what data scientists do is or why a department productivity tool is actually massively valuable to a business.
Add to the mix competitors are coming out with somewhat similar or overlapping products.
Instead of focusing on just what they build, they’re educating the market on aspects of data science that matter to business: “What advanced analytics teams are doing that you aren’t” “The Danger Zone in data science: why mediocre ML is so dangerous to the business.” These strong points-of-view establish why data science problems matter to businesses. This not only elevates the expertise of the founders, but it gives people outside their users an opportunity to engage with the company brand.
The lesson: even before you have a product in market, you can still start to own a market position. If you don’t do it, someone else will.
Don’t get too focused too early; throw ideas away to find focus.
Focus creates acceleration, right? But focusing too early on the wrong thing can mean you’re polishing a turd.
When Feldera started, they knew their new tech could make real-time processing of data possible without having to do a round-trip to the cloud. It could be used to improve fraud detection, trading or pricing calculations. The uses were limited only by people understanding how Feldera’s tech could be used.
Their talk-track focused on what they meant by “real-time analytics,” but people didn’t understand how to apply what they built and which problems it solved.
So they shifted their approach. They doubled-down on speaking with data engineers and data scientists to see how they were using existing tools to discover how Feldera could be used. They threw away any ideas that didn’t result in a proof of concept commitment. That’s how they found an important new focus: GenAI use cases were exploding and AI and ML teams now had a need for Feldera’s analytical processing speed for live and historical data.
The lesson: don’t get overly attached to the problem(s) your product can solve. Instead start with a wide variety of use cases, then throw away the ones that don’t result in concrete signals of customer need. Once you have the use case that makes potential customers lean in, you’ll feel confident about your focus and value proposition.
Focus on conversations, not sales.
Even though BrightGo builds software to help large janitorial companies run more efficiently, the founders didn’t know much about the market before they started. They set goals to hit a minimum number of customer conversations per week, went to trade shows to meet owner operators, and even did ridealongs. Their sole initial purpose of all of this was to learn.
They learned the #1 issue facing these owners was time theft of worker hours. Second was the resulting contract terminations when janitorial workers didn’t show up or do a good enough job.
Even though owners said they eventually wanted a single place to manage HR, accounting and operations, BrightGo’s conversations helped them focus on what the market valued most: time theft and terminations.
Before they’d even written a line of code, this clarity made sales easy: multiple owners signed contracts with them to ensure they’d develop their product.
The lesson: At the earliest stages, set conversation, not sales goals. Remember you’re searching for market fit, namely, what problem will people pay money to you to solve. If you nail the conversations, sales will follow.
We’d love feedback if this was valuable to you to help us shape Part 2. More lessons and examples to come.
