You found a problem worth solving and wonder whether you can build a company around it. Today I share some of my favourite articles about product-market fit and tie them together. The links can be found at the bottom.
The Minimum Viable Testing Process
Gagan Biyani explains the pitfalls of minimal viable products (MVPs). Instead of diving in head-first, test your riskiest business assumptions and focus on your atomic unit. These minimal viable tests (MVTs) should not span end-to-end and instead work towards validating a small hypothesis by ducktaping together manual work, spreadsheets, partial developed software, etc.
MVPs also make for horrible core products. Most engineers have made rudementary proof-of-concepts ending in production with a mountain of technical debt. Instead take your learnings and start from a fresh slate, the build phase goes much faster than you’d expect once the riskiest assumptions are out of the picture.
Minimum Viable Company
Ann Miura-Ko points out that a MVP is insufficient. Instead true product-market fit is the magical moment where value proposition, ecosystem and business model click together into what she calls the minimal viable company.
While all three are equally important, I’ll highlight value proposition. For startups, your value proposition becomes product-market fit when it can promise a 10x improvement and it can promise that this improvement will outweigh the cost rather sooner than later.
Once you’ve built some features, stop adding yet another one and instead look at what’s the most promising to deliver on your promise, then iterate on that until it becomes not good but great. Some founders see this as premature optimization but it’s actually part of reaching your product-market fit.
Wants, needs and chasm-crossing
Avery Pennarun compares strategies in addressing wants and needs. The idea is simple, you must at least address one want and all needs of a market segment. Subsequently he describes a MVP as a product that fullfils one want, but none of the needs.
In practise you can use this advice in your user interviews, it isn’t uncommon for prospects to see something they want followed by great feedback, yet traction from these same individuals ends up missing. Next time consider to explicitly ask what they need to get started - you’ll be surprised by the trivia that is holding back your product.
Bringing it together
You got your problem worth solving. Start by running minimal viable tests to get a sense of the market and reduce risk. Instead of building a full-fledged product, ducktape together some key features in isolation to see which one is most likely to deliver on your promise to solve the problem.
Take your learnings and start from a clean slate, iterate on your most promising features until you got a value proposition that can promise a 10x improvement that outweight costs quickly. Simultaneously find your spot in the ecosystem and develop a sustainable business model.
All this hard work leads towards true product market fit and having a MVP that fullfils one very delightful want, but none of the needs. Use your learnings from your MVTs to address the needs of the most promising market segment. Afterwards scale, scale, scale by strategically alternating wants and needs to increase your total addressable market and unblocked customers.
You can read these articles yourself - they're filled with golden nuggets that will give you several aha-moments along the way: