The Magic Bike Company

Product Market Fit

Full speed ahead Mr. Boatswain, full speed ahead. Full speed ahead it is, Sergeant. Cut the cable, drop the cable Aye, Sir, Aye Captain, Captain! —Yellow Submarine written by Lennon-McCartney
“Product/market fit [which] means being in a good market with a product that can satisfy that market.” - Marc Andreessen
A go-to-market strategy (GTM strategy) is an action plan that specifies how a company will reach customers and achieve competitive advantage. The purpose of a GTM strategy is to provide a blueprint for delivering a product or service to the end customer, taking into account such factors as pricing and distribution. A GTM strategy is somewhat similar to a business plan, although the latter is broader in scope and considers such factors as funding.
Chamath Palihapitiya a venture capitalist says that in addition to (1) finding product market fit and (2) identifying core product value, a business must (3) identify A-ha moments (sometimes called magic moments), which are based on positive experiences with the product.

    The Bain Company has compiled a list of product and service values. Below is a sample of those values.

  • Hope - Providing something to be optimistic about
  • Motivation - Spurring people to achieve their goals
  • Offering fun or entertainment
  • Providing an appealing form or design
  • Providing access to information, goods, services or other valuable items
  • Connecting with other people
  • Helping people become part of a group or identify with people they admire
  • Providing high-quality goods or services
  • Saving time in tasks or transactions

Customers purchase your product and pay you for value. If you have met their value expectations, you can expect they will purchase your product once again.

The sooner potential customers get to that A-ha moment the better for the business because every moment that passes before then increases the probability that person will not become a customer. A business which delivers a series of A-ha moments as part of feedback loops will “early and often” expose its customers to core product value, which drives growth. The A-ha Moment
Steve Jobs delivering an a-ha moment at the introduction of the iPhone.

 

The next step is to achieve Product-Market Fit with the value proposition you have created. Product Market Fit has always been a fairly abstract concept making it difficult to know when you have actually achieved it. Yet many entrepreneurs have highlighted the importance of creating a product that resonates with the target market. The mantra at Paul Graham’s successful startup incubator Y Combinator is “make things people want.“
Getting to product-market fit means building and iterating on your product until it achieves your intended people outcomes. The key in this phase is to define good hypotheses and get to conclusive results on those hypotheses as quickly as possible. To work efficiently towards product-market fit create a focused MVP(minimum viable product) for a target segment. Define bold success metrics that ensure your intended people outcomes, and assume you will learn. Retrieved from: The 4 Stages of 0->1 Products
And you can always feel product/market fit when it's happening. The customers are buying the product just as fast as you can make it -- or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You're hiring sales and customer support staff as fast as you can. Reporters are calling because they've heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck's. Posted by Marc Andreessen on June 25, 2007 on blog.pmarca.com

Testing your concept

Use Facebook polls to compare ideas. See how here: Social Media Examiner You can create a poll on Facebook that asks a question and lets people choose one of 2 options. To post a poll to your Facebook profile: Click at the top of your News Feed or timeline. Scroll down and select Poll. Next to your profile picture, enter the question you want to ask people. In the boxes with Option 1 and Option 2, enter the options for your poll. Click or to add a photo or GIF to your options. Click 1 week to choose when you want your poll to end. Click Post. To post a poll to your Facebook Page: Click See All at the top of your Page and then click Create a poll. Enter the question you want to ask people. In the boxes with Option 1 and Option 2, enter the options for your poll. Click or to add a photo or GIF to your options. Click 1 week to choose when you want your poll to end. Click Publish. Note: Polls on Facebook aren't eligible to be boosted. Another option is to conduct research by creating a survey with Typeform embed in a website. Learn how here: Typeform survey examples
How the Beatles created a product that resonated with their market.

 

Innovation and best practices are discovered by the experimentation of entrepreneurs who try to establish the evolutionary fitness of their business. Products and services created as part of this experimentation which have greater fitness survive and other less fit products and services die. Entrepreneurs are essentially running experiments in this evolutionary system when they create or alter a business. What is different today is that the tools and systems which exist which allow experiments to be conducted more cheaply and rapidly than ever before. It has never been so possible to know so much about so much. The trick is being able to use these tools to separate signal from noise. from: trengriffin
A Kano Analysis is cheap and easy to perform and provides clear vision into what users actually want and expect from your product. It also provides hard data, which breaks everyone out of the trap of biased or shortsighted thinking. There’s no need to argue and debate with internal stakeholders about which features are in or out. Read Brian O'Neil's article on Medium.com “The Kano Analysis - A Better Way - Discover What Users Really Want From Your Product.”
Quality Function Deployment (QFD) is a structured approach to defining customer needs or requirements and translating them into specific plans to produce products to meet those needs. The “voice of the customer” is the term to describe these stated and unstated customer needs or requirements. The voice of the customer is captured in a variety of ways: direct discussion or interviews, surveys, focus groups, customer specifications, observation, warranty data, field reports, etc. This understanding of the customer needs is then summarized in a product planning matrix or house of quality. These matrices are used to translate higher level 'what’s' or needs into lower level 'how’s' – product requirements or technical characteristics to satisfy these needs. retrieved from NPD-Solutions: Customer-Focused Development with QFD
After customer requirements are translated into technical requirements, a company develops the product purposely based on the ratings of technical requirements. The primary mission of House of Quality is facilitating the identification of improvement opportunities. Specific solutions can be obtained by the various innovative methodologies mentioned in the beginning. QFD can not only rate the technical requirements to get the targeted improvement, but also reveal the relationship between the technical requirements in the roof of House of Quality.

Julie Zhou, Product Design VP at Facebook discusses her perspective on how to create successful products that create valuable new intents for people at scale in this Medium.com article The 4 Stages of 0->1 Products.

How do you get from the plant to the customer? Selecting the right sales channel is critical for any business -- products often fail because the company chose the wrong route to market. Yet when designing a distribution strategy, one should never begin with the channel itself; a properly designed sales channel is actually a function of your product and your target customers or market. a16z general partner Ben Horowitz presents channel and distribution strategies in this video.

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