Development, Digital, Marketing

What is Product-Market Fit?

Written by Paul Anderson

Start-up culture does not seem to get old. In fact, experts say after the dot-com bubble’s rise and fall, we might be looking at the beginning of a new age of start-ups in this decade.

Start-ups are no walk in the park. There are tons of obstacles for any company trying to make it in the market. Initially, every start-up would have to go at least 1000 days without a paycheck while still gambling on initial investments and further funding.

Releasing a new product is always a gamble. Many companies dedicate themselves to releasing products without really getting an idea of the market. This notion aligns with the 1000 days no pay agenda. Businesses assume that the product they release might not be  really exciting the market at the moment, but are convinced without much market research that over time they would eventually make it big.

This is where the product market fit comes into the picture. This is a well known modern management and market analysis concept in the start-up world. It is popularly used by many major companies but somehow hasn’t caught enough attention in the business world yet.

This model shows start-ups the relevance of their product through the reaction of consumers. It helps business owners achieve a shift in their perspective about their product, while giving them new ideas for business growth.

Business Meeting on Marketing

What really is Product Market fit?

The stage at which the start-up successfully identifies its market or target customer base, and releases a product that caters to their exact need. In other words, you would know when the start-up has been successful at achieving the product market fit when :

●       You hear talk about the product, through word of mouth.

●       When the reviews on the product are positive and indicate its popularity

●       You release the product and it gets sold out in no time.

When the product is positively accepted and popular amongst the target audience, the next move would be to scale up and grasp the attention of a larger market.

How can you measure product market fit?

Measuring product market fit is a little convoluted. There is no single metric that tells you the magnitude of how well your business has committed to the model and achieved it. But there are a handful of signs that can give you a brief idea of whether you are moving in the right direction or not.

  1. To figure out your position in the product market, you need to conduct plenty of surveys. When you survey potential customers by giving them a chance to use your product, does their reaction seem like they will be willing to switch to your product? This may sound a little strange, but customer reaction says a lot.
  1. Have the customers rejected similar products from other brands or companies similar to yours? If they have, are they willing to try your product at all?
  1. Do users understand what makes your product unique in comparison to others? Are they genuinely interested in knowing how you stand out and what more your products have to offer?
  1. Have a look at the retention rates to gauge whether the users will be willing to stick around.
  1. When you showcase your products to the users, do they compare it to similar ranking products of other brands or lower grade products.

The above signs are both quantitative and qualitative metrics. There are still many ways you can figure out the success of your start-up in accordance with the product market fit model:

  1. Churn rate
  2. Market share
  3. Growth rate
  4. NPS score
  5. Word of mouth (popularity and influence of the product)
  6. Calls and positive inquiries from media companies and industry analysts
  7. The overall popularity and coverage of your product in the media and on other social media sources.

Common misconceptions about product market fit

Many business owners are heavily misinformed about the model and at times do not really know what is product market fit. They are under the impression that they perform well despite low sales and bad reviews? Here are a few common misconceptions people have about product market fit.

1. First to market does not matter

First to market is a very important factor in the long run. It always leads to better and large scaled product sales. Though some might discredit this fact, arguing that Facebook, for instance, was not the first social media platform but it still found the product market fit.

However, Facebook took the most compelling features of tech and was sold in a manner that took the world by storm. So, in a way, it was first of its kind. Once you achieve the product market fit, it is very hard to break out of it. Almost all of the products will satisfy the model thereafter.

2. Once you are successful in the product market fit, you will not have to beat competition

Competition is what makes companies great. Although reaching a product market fit can set your company on a new and better path, there will still be a lot of competition. You will have to keep bringing out products that outperform your competitors.

3. Discrete product release is better

Product market fit is all about the outreach and acceptance of customers. You have to bring out products in an extravagant manner. This sends out the message that you are in it to win it. Discretion is not always the best choice, but if funding is a problem, one should consider cheaper alternatives that still are a little loud.

Conclusion

In the early stages of a start-up, earning money in a short period of time is very tempting. However, to create a successful and lasting business, you also have to realize that short term revenue is not the way to go.

Investing in outreach and understanding your products’ place in the customers’ lives is necessary. There is always room for better resources and methods to produce a lasting and widely accepted product. So, shift your focus there.

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Marketing, Startup

How To Know That You Got A Great App Idea?

Written by Paul Anderson

Among the millions of apps available worldwide, only less than 1% actually become financially successful. Although this fact can be disappointing for most people, in reality, knowing this can give you a very good idea of what works and what doesn’t.

More than 3 billion people use smartphones and an estimated 68% use apps on a regular basis. 

There are huge opportunities in the app market, but “success” will greatly depend on a variety of factors including your goals and objectives. A successful mobile game It’s not the same as a successful productivity app, for example. Both can be considered successful but their goals, market and revenue can be very different from one another.

Before going into the details of what makes a great app idea, let’s first take a look at why most apps fail.

Creative colleagues working on new app design

Most Apps Fail Because They Don’t Take Users Into Consideration

With such a huge market it is really surprising that the success rate remains so low. But, if you look at the market you’ll quickly notice that most apps fail to deliver an useful and enjoyable experience for its users.

Sure, it’s easy for most developers to fall in love with their idea. It’s an idea so original, so different than any other app that was ever created, on top of that, so much effort, time and money was invested that they simply can’t accept that probably no one will find good use for it.

At the end of the day, users are what keep apps alive. If your idea does not align with the user’s interests then the app will probably fall short.

Here are some of the most common mistakes:

Original Ideas

Sometimes it’s the lack of original ideas, and as counterintuitive as it may sound, other times the idea is just too original. There’s a saying that business ideas don’t have to be completely original, and it’s true.

Taking messaging apps for example, the reason why they’re so successful is because there’s a market for it. If there’s a market, there are opportunities. So, being original does not mean that you should avoid messaging apps at all cost, it just means that your messaging app will offer something different that the other apps lack.

User Experience

For many reasons, including personal preferences, time and money constraints it’s easy to fall into the mistake of delivering an app that offers a less than enjoyable user experience.

When you’re dealing with people and customers, going against the grain is not always the best idea. If your customers want a simple interface, why make it complicated? If they prefer detailed information and technical data, why offer them a simplified version?

It’s not about defining how your market should behave, it’s about letting market behavior define how your app should be, which takes us to the next point.

Feedback

Ignoring feedback is a big mistake that small entrepreneurs and big companies make. Feedback is the most direct way of knowing exactly what your customers want. It completely eliminates the guessing factor.

If your user’s are informing you that the app acts laggy when performing a certain action then you know what to improve. More often than not, when customers enjoy an app they will also leave useful feedback that can serve you as a guide to improve it.

Failing in these three aspects will most likely render an app idea useless, and you have to be careful with it because it’s easier to fall into the “top 10 useless apps” category than make it to the top.

How To Know If Your Idea Is Great?

Most of the time, great ideas are fairly easy to identify. Whether it is a subjective feeling that your idea can actually bring some value to other people’s lives or people are actively searching for something and you figure out a way to provide just that.

Doing this can help you know if your idea can be a success:

Market Research

Research is more than just browsing the marketplace for a few hours and convincing yourself that your idea is better than the ones available. The active process of research involves getting so close to your potential customers that you understand their needs and wants.

If you know how your future customers think, what motivates them and which of their needs are not being met, you’ll be able to quickly realize whether your app has potential or not.

Your Idea Is Aligned With The Market

Some people think that this takes away the originality of your idea, while in reality it just boosts its potential. It doesn’t matter if the app is for a banking platform, social media, instant messaging or financial news, as long as there’s a market for it.

Taking WhatsApp for example- as successful as it is, WhatsApp is not very original. If it wasn’t so well-known you could actually consider it just another instant messaging app. However, its success came from understanding their audience so well that they were able to stand out from the crowd.

Your Idea Is Useful

This is probably one of the most important things to keep in mind. Your idea must be useful in some way, it must have a purpose and be able to fulfil it.

If it is a productivity app, it must be able to provide value and solution for your customers. The best way to achieve this is by providing what other apps lack. 

For example, during your market research you might notice that a related app always receives some feedback about a feature they lack. If you’re able to provide a similar app which includes that feature, then you’ll be able to market your app to that audience.

In Conclusion

You have a great idea if it can address the needs of the market. From simple interactive screensavers to document editing and travel related apps, the market is huge and the available options are even bigger.

Although the vast majority of developed apps fail, you must be able to measure your success by your specific goals. Even if the app does not reach +10 Million downloads, if it serves its purpose and users feel that it makes a positive impact in their lives you can consider it a success.

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