Product-market fit (PMF) is a scenario in which a product is in strong demand within its target market. Customers buy it, use it, and tell their friends about it – because it’s exactly what they need or want.
We asked Damien Garot (Co-Founder and CEO at Stellar) if there’s one thing he’d advise all startups to do in order to test product-market fit, and he said that while there are many steps required, there is something that’s absolutely essential:
“We need to identify Champions: people who feel the pain of the problem the startup is fixing, and who can convince their organisation about the benefits of our solution.”
This process of identifying Champions can start with the very first company or customer adopting your product or service. They set off a chain reaction – and product-market fit can emerge from this early pool of customers.
“Some people say startups need ‘early adopters’,” Garot added. “I prefer to say that we need Champions, as our success stems from the personal endorsement of key people for our vision.”
You can work on identifying Champions for your tech startup before you go to market, by launching a private beta testing program.
This involves gathering a group of potential users (who you think your product or service will be ideal for) and giving them access to your offering before you release it to the public.
The primary purpose of this type of test is to collect real-world feedback on how your product works. You can gather user perspectives on every functionality, UX, design, branding, and more, from a controlled group that is representative of your broader market. And then you can action this feedback by iterating before your public release – ensuring your product or service meets (or exceeds) the expectations of your target audience, and giving your startup the best possible chance of a successful launch.
Don’t underestimate the other opportunity that beta testing brings, though: to connect in a meaningful way with customers who could become authentic, enthusiastic Champions for your product.
They’ll get to try it first, and that creates an immediate sense of connection. And then their feedback will influence the development of your product or service – which deepens that connection even more, and facilitates a sense of ownership and loyalty. This means that your beta testers could be the ideal Champions to help spread the word about your startup, before and after your official launch.
If there’s one mistake tech startups keep on making, it’s the assumption that you have to test product-market fit once, and then forget about it and never do it again.
Actually, you should continue testing PMF as your business grows – it’s a living thing, a changing thing, and you need to make it a part of your long-term strategy.
Elnaz Sarraf (Founder and CEO at ROYBI Robot) said:
“One key step for startups to find out if their product fits the market is to launch a simple version of it early on and see how customers react.”
But it doesn’t stop there. She added that “by regularly gathering feedback and making changes based on what customers say, startups can ensure their product meets the needs and wants of their audience.”
When you have PMF, your customer retention rate should be high, and your churn rate will be low. Keep an eye on those numbers and combine that quantitative data with regular qualitative research – by asking customers about their experience with your products.
Product-market fit changes over time because markets change over time. So be proactive and move with your market, not against it.
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