Hey I'm Pavan. I was an early stage C-level executive at Trilogy Education Services in late 2015. We attained Product Market Fit (PMF) fairly quickly and were acquired for $750M in mid 2019.
After the exit, I was asked to give a talk about PMF.
That's when I realized that I had no framework for attaining PMF. As an angel investor, I knew of signs to look for in a startup that allude to a future PMF, but that's all.
That's when I embarked upon studying PMF. I spent 100s of hours reading, taking notes and discussing PMF with founders. This guide is the culmination of my journey.
This guide is a work in progress.
I made a huge outline over the course of months, and i'm in the process of extrapolating it out into this guide.
I plan to add a quiz, a deck and a series of documents to accompany this guide.
| File | Description |
|---|---|
| PMF Google Sheets | You can clone this workbook and fill it in while you go on your product market fit journey |
market is a group of users that have a certain need
product is a solution to a certain need
product market fit is when a particular need of a group of users is being met through a product
the market is significantly more important than the product
When you don't have product market fit
that means
There's a hidden need your users think your product will solve
but your product doesn't
you can tell because
you DO NOT have retention or repeat customers
at this point, all you can do is
interview your prospective customers
You might think you have product market fit
when you have increasing signups or increasing traffic
this means you have market fit
you've identified a market that has a hidden problem
but you may not have product market fit
Unless, you have repeat usage (retention)
You don't have product market fit
just market fit
Marc Andreessen is the
Marc Andreessen said
"You can always feel when product/market fit is not happening.
The customers aren't quite getting value out of the product,
word of mouth isn't spreading,
usage isn't growing that fast,
press reviews are kind of 'blah,'
the sales cycle takes too long, and lots of deals never close."
it's simple
you have retention or repeat customers
Marc Andreessen said
it's when your product
is just being pulled out of your hands.
you no longer have to push the product onto customers
Example: does Facebook try to convince you to sign up?
Sam Altman is
Sam said
it's when users spontaneously
tell other people
to use your product
Your startup can have
but wrong timing?
then PMF won't happen
If you have the wrong timing,
then you're hoping that you can survive long enough until the timing is right.
the question you should ask
is my business being accelerated by anything happening in the world right now?
Think of your business as a surfer. Are you surfing in a pool at a Marriott? Or are you on a Maverick?
There's no way you're going to create a Maverick in a Marriott pool. So instead, find the maverick and ride it. Pivot so you're riding the Maverick.
Of course, even if you have perfect timing,
the world can change,
and either your business fits
or it doesn't.
Ex: Coronavirus.
But, if you've answered the above question effectively.
while the timing is perfect
NOTHING will stop your business because
your business will be riding
a TSUNAMI of NOT water,
but a TSUNAMI of PERFECT TIMING
no one would have quit their jobs and joined 3 month coding bootcamps when
the perfect timing was what helped push people to coding bootcamps
When starting out building your product
Do everything manually
Be as unscalable as possible
In the beginning, pre-pmf, spend as little time as possible on product
Focusing less on product will free you to focus the vast majority of your time on
deeply connecting with your users through customer interviews
and when you focus everything on one hidden need echoed by many users and ignored by many competitors,
and you solve it 10x better than anyone else out there,
that's the seedling for your product market journey.
That's your MRP
Your Minimum Remarkable Product
Everyone tries to achieve product market fit,
but they do the product part first
they spend the majority of their time on their product
but they should minimize time spent on their product.
and they should maximize time spent listening to the market (the user).
the only time you should work on your product is when you can't get any of your prospective customers to talk to you.
you don't define the market, so you must start with it
and when you're starting out
the market is anyone willing to talk to you
during customer interviews, prospective users will
You SHOULD NOT build your product without talking to people who have the problem.
Because after talking to prospective users
When talking to users,
you're not doing market research
market research is about researching current markets
these current markets are groups of users with needs that are already being met by companies
using market research is the most difficult road to becoming a market leader and getting product market fit
instead you should do prospective customer interviews
and be listening for undiscovered unmet needs of a new market
a new market is a group of users with an unaddressed need
once you find one, you'll be the market leader by default
yes, you'll be copied,
but by then
you'll have achieved product market fit
finding an unaddressed need via customer interviews is like finding a needle in a haystack
if it was obvious,
lots of competitors would be solving it already
this can take months or years of prospective customer interviews
You may talk to the same customers for many months
even when you discover this new market
and make a product that meets the unaddressed need
you still have to convince the market that your product solves it for them
they might not believe that it's possible for their need to be met
Weebly is a web hosting service that made it easy for people without coding experience to make and host websites.
Weebly was founded in 2006 by David Rusenko, Chris Fanini and Dan Veltri at Penn State.
In 2007, Weebly joined Y Combinator and launched a "WYSIWYG" editing interface.
PR:
It took four years
for Weebly to convince their prospective customers
that anyone can create a website
without knowing how to code
Weebly got into the best seed accelerator in the world, raised $650,000, was in Time as the 50 best websites,
and they still didn't have product market fit.
it took them time even with discovering an underserved market with a product that could serve them what they needed
Unlike Weebly, Airbnb didn't have to convince people much
because the timing of a major recession helped them a lot,
Timing is everything to get product market fit.
people were desperate to make money and desperate to save money in the recession
While interviewing prospective customers,
you're updating and re-evaluating your market thesis
Your market thesis will look like this
Acronym: WEMP
Remember, you're just filling in this data based on what you hear during the interview
Hubspot Sidekick was a business that generated $100M ARR (Annual Recurring Revenue).
The product would track emails you send out and when the recipients opened emails, it would notify you through a chrome extension.
I was one of the first premium users of this product. I used it when I was doing business development for INRTracker.com, a startup I founded in 2014.
This is Hubspot Sidekick's Market Thesis
If you don't have a ton of repeat usage
You don't have product market fit
Who you think your target user is
may very well be false
so don't be too rigid on
who your target user is
You're not pitching, selling your product.
You're not convincing this person of anything
You're here to listen.
You're extracting data out of them that will improve your
Restrain from talking
you're listening for the
when you find a hidden need
figure out what ONE feature would meet this need
then ONLY focus on that ONE feature
and make it 10x better than anything out there
Virgin airlines (virgin atlantic airways) was a startup airline
the name was licensed from richard branson
Richard Branson has nothing to do with this airline otherwise
Virgin airlines knew they couldn’t compete on price and availability,
but from doing customer interviews AND DIGGING FOR CONTEXT
they realized that when people are flying,
it is absolutely awful
So virgin airlines made the best possible experience for customers
Their "airline experience" feature was 10x better than other airlines
they ignored other features they couldn't compete on
through customer interviews, virgin airlines discovered a NEW MARKET
their core consumer insight
flying experience sucks, build a product with the best flying experience
their NORTH STAR
fabulous lighting, cool routes, cool staff, all pr is done on plane to show that the experience is 10x better than the competition
You'll hear a lot of problems from users
but which one should you focus on?
look out for these two types of problems
ask if you can record the conversation
you won't know until later which key facts of the interview will be useful
capture as much information as possible
feel free to react
keep yourself in check
Limit interviews to 10 - 15 minutes
that's all you need
Don't ask them,
"if we made [insert feature], would you use that?"
"if we made [insert feature], would you pay for that?"
Instead
Ask them about specifics from the past
everything else is just hypothetical garbage
Ask them about specifics around what they have already done to solve their problem(s)
Talk about specific things that have happened in the prospective user's life
dig deep into features/solutions they want you to build
if they tell you what to build
"you should build [insert feature] into your product"
dig deeper into the job(s) they want you to do for them
Ex. Imagine Henry Ford is in the process of inventing a car,
and he's doing customer interviews
so he asks a propsective customer
Ford: "What do you want?"
Prospective Customer: "A faster horse."
Ford digs deeper to find out what job he's being hired for
Ford: "Why do you want a faster horse?"
"so I can get to places faster"
that's the job Henry Ford is being hired for.
that's EXACTLY what Ford's car should do.
that's the exact language, Ford should use in his marketing and advertising campaign
So you can get to places faster.
What improvements can you make
to the questions you asked
to get the prospective customer
to talk more about specifics from the past?
were they good potential customers?
good potential customers
if they are not good potential customers then DO NOT take their interview seriously
were they bad potential customers?
bad potential customers
If the majority of people you interview ARE NOT TRYING TO SOLVE THE PROBLEM
then reconsider trying to solve this problem
Or change the target prospective customer you're interviewing
If they offer a solution that's good enough
then reconsider trying to solve this problem
Example: mismatched socks are a universal problem, but no one is getting rich fixing it.
organize the notes from your interview. You can use this template I made.
have a meeting with your team and share what you learned.
This question is meant to extract a user's pain points
Dropbox was founded in 2007 by MIT students Drew Houston and Arash Ferdowsi. They received seed funding from Y Combinator.
Imagine it's 2005. Put yourself in Drew's shoes.
you're in the college computer lab
you want to learn about how other people are sharing files
are there potential users here?
what are the problems I can help solve?
you're sitting in the computer lab, you turn to your friend and ask
"so what's the hardest part about working on a group project with school computers?"
you begin open ended conversation, trying to extract information
trying to understand how this person CURRENTLY works on group projects with friends
hopefully you learn about pain points they have
Pain points:
This question is meant to extract CONTEXT around the circumstances
around how the user encountered the problem
who were the students in the computer lab working with?
what class was the project for?
was it computer science?
were they working on an english paper?
try to extract as much information as you can about the context in which they began solving this problem
so as you develop your product, you'll be able to reference REAL life examples of PAST PROBLEMS that potential users had,
and you can OVERLAY your solution on top of that
to see if it would help in that particular circumstance.
You're extracting the path that led the user to encounter this problem.
ask them questions about their life in broader ways
to extract context around how they arrived at this problem
You are asking this
because you want to extract
SPECIFIC minute details
that the user encountered
that made the problem difficult to work around.
you'll hear many different things from different people
the specific details might have included
duplicate work
because they didn't have the same version of a document at the same exact time
they submitted the wrong document in the end
because they have a ton of different versions
the benefit of this question
is not just to identify the specifics of the problem
but
you'll begin to understand how to you market your product
you'll get the
exact words to use
on how to explain
the value or the benefits of your solution
to new potential users
you can use these words into your copy for
Customers
DON'T buy THE WHAT
they buy THE WHY
find out the WHY with this question
AND USE IT
a prospective user
WON'T BUY the WHAT
so
don't pitch like this
"Oh I have this file syncing tool that can keep all your files in sync"
they WILL BUY the WHY
"Working on a group project? Never have your work overwritten again."
and when they hear that or read that
they'll think
this product will help with the exact problem i had two weeks ago
when I was trying to work on that group project
you want to ask this question for two reasons
1. to figure out that the problem you're trying to solve IS EVEN SOMETHING PEOPLE ARE LOOKING FOR SOLUTIONS TO
Eric Migicovsky
is a Partner at Y Combinator
was Founder and CEO of Pebble, a smart watch company that launched in 2008. He raised $10.3 million on kickstarter. It was the most funded project in Kickstarter history at the time.
Eric said: "One of the biggest things that i've encountered while helping ycombinator companies of last few years is that if potential customers are not already exploring potential solutions to the problem, it's possible that the problem you're trying to solve is not a burning enough problem for them to even be interested in your better solution to this problem"
this question tries to get to the root of that issue
is the person who encounters this problem already trying to solve this
if yes
then you're talking to the right prospective user
if not
then you're not talking to the right prospective user
and
it's possible your solution isn't worth making
2. what will be your potential customers compare your product to?
ask what tools or strategies did they experiment with
maybe they solved it
this is what your prospective users will compare you to
these are the substitutes for your product
Before facebook,
people kept up with each other via
those were the only ways to get in touch with people and find out what they were up to
those were the substitutes for facebook
having trouble keeping up with what everyone was up to
was a hidden need
was the job facebook was being hired for
one more thing
don't ask them
what do you think will work
if they do give you features, solutions
stick with the PAST
things that the user has ALREADY done
not things that the user wants or will do
This is another way of asking
What are the problems with the EXISTING solutions you have ALREADY TRIED?
this is the beginning of your potential feature set
this is how you begin understanding what feature you'll focus on for your better solution to the problem
this question specifically extracts
what has the prospective user ALREADY TRIED
and the PROBLEMS with THOSE SOLUTIONS
DO NOT ASK THIS
what features would you want for [insert your product here]?
this is hypothetical
you need something concrete
users are awful at telling you what you should build
you need something concrete
You're extracting frequency of the problem
get the exact number
what you want to really hear is that they have this problem frequently
if they never run into the problem
then they're bad customers.
Perhaps you have to target a different user or the idea isn't something you should pursue.
You're extracting budget information
get the exact number
What's the severity of the pain?
this can include
do they have the authority to fix the problem?
do they have control over using the budget?
if they don't then you should do the interview,
but you should find out who is in charge
and get interviews with people like that
try to figure out what other problems they have
try to rank the problems they have relative to the one you're solving
what are they worried about right now?
what about for the future?
what are they doing to mitigate these worries, concerns?
ask them what costs them
ask: what are the worst parts of your job?
You should tell them what your product is at the end of the interview
you should do this at the end becuase you want to focus the conversation around the user, their problem and their life. Because that's where hidden needs lie in.
Telling a prospective user your idea will focus the conversation around your idea and NOT THEM.
you should tell them your idea
because in my experience
when you tell them your idea
it brings up details about their pain point that weren't extracted previously in the interview
I remember having a 30 minute interview with a prospective customer where they failed to mention a product his company was using to solve the very problem we were talking about the entire time.
it was only after I told him my idea, he brought up the product his company was using.