Dreamers with big goals rarely start out knowing where their path will take them, but most have the urge to change the world in some form or another. It can be a groundbreaking invention that revolutionizes your niche or it can be a simple solution that contributes to your community. Big or small, businesses strive to make an impression in their given market.
But inventions that don’t have any real-world applications won’t flourish on a massive scale, especially since different industries focus on solving problems and improving people’s lives.
Brands that only offer services or products with a steadily growing consumer base may get short term success, but the foundation of every company’s long term success lay in its ability to leave a lasting, positive impact in its target markets.
After all — it’s your understanding of your audience and your venture’s role in providing something of value to your community that solidifies your potential market share. That’s where testing your product-market fit comes into play!
Originally coined by one of the biggest household entrepreneurs/investors in the world, Marc Andreesen defines ‘product-market fit’ as the only thing that matters in the world of marketing. It essentially represents your role in the market and whether your product can satisfy customer needs in a deeply meaningful way.
Product-market fit proves that it doesn’t matter how sophisticated your concept is if it doesn’t benefit anyone in one way or another. This can translate into a big loss if nobody is willing to pay for your offer.
So, for startups wondering the secret to making a ‘dent in the universe’, the first step to propelling ahead of a saturated market is to test whether your products or services achieve strong product-market fit. To that end, these are the questions you should ask to measure your product-market fit:
1. Do your customers care about your company?
2. How would your customers feel if they could no longer use your products?
3. How many customers stay loyal to your product, and how many leave? If they do choose a different brand, how soon do they switch to your competitor’s products?
4. What makes your product a must-have?
5. What is the main benefit your customers get from using your product?
Another way to assess your product-market fit is to consider two types of data: quantitative, which looks at your NPS score, churn rate, growth rate, and market share. Companies like Monkeylearn and Lexalytics help in performing such intricate analysis. On the other hand, you can go for a qualitative method by focusing on your market’s word of mouth, brand awareness, and even media coverage to gauge the success of your brand.
Trying to sell into too many demographics at once can make your efforts less effective as it spreads your team thin.. It’s important to consider that not every group will benefit from your products or services; that’s why it’s best to focus on building a meaningful relationship with a focused audience.
By segmenting your market, you can identify potential customers and define their “buyer personas,” which can extensively lend to your strategy in the long run. With a clear understanding of who will be interested in your business as it grows, you can tailor your production, services, and campaigns throughout your pipeline with a more data-driven approach.
Use tools like Google Analytics, SEMrush, and Google Search Console to easily identify your target audience based on their interaction with your product and service. There is no blanket rule for how to identify your audience, but the following steps offer a helpful framework:
1. Assess your products or services;
2. Get to know your competitors;
3. Choose your segment criteria;
4. Conduct market research.
When you can characterize your business based on the criteria above, you can reach a well-defined understanding of the role you play in a fast-moving marketplace.
Now that you know who will want to purchase from your brand, the next best step is to take the relationship to a deeper level by uncovering your target customers’ interests, behavior, and pain points.
It’s one of the most critical phases in the process of testing your product-market fit since it reveals hidden challenges and recurring problems you’ll have to address as you scale your business. Uncovering your market’s underserved needs also creates opportunities to improve your products or services, paving the way for a spot in your industry where you can establish your credibility and value.
With that in mind, here are some key pointers that can help you discover your customers’ underserved needs:
- Conduct customer-centric and discovery-driven interviews, surveys on social media groups, and questionnaires to build user persona and real-world stories; like Linkedin Outreach, Facebook Group research, and talking to SMEs.
Now that you have a clearer definition of who your customers are and what kind of problems you’ll need to solve for them, both factors can help develop your value proposition; a promise that a company makes to their customers if they buy their product. This includes what services or goods are provided as well as the price point at which these items come, and how long it will take for them to be delivered. It describes the uniqueness of your products or services compared to the competition.
With a strong value proposition, your brand can win people’s trust despite hundreds to thousands of like-minded businesses fighting for the same attention. Some of our favorite companies that display a great value proposition for their customers are:
1. Uber- The Smartest Way To Get Around
2. Apple iPhone- The Experience IS The Product
3. Slack – Be More Productive at Work with Less Effort
Your value proposition should appeal to your audience and showcase all the most compelling drivers that will nudge customers in their decision-making process. From highlighting exclusive features, innovative ideas, and other exciting ways to grab the buyers’ attention, your value proposition is a critical component of your entire marketing pipeline.
A value proposition puts the spotlight on what your products or services can distinctly offer, but now it’s time to break down the fundamental components of your offering. This part clarifies your products’ functionality, which should include features that generate the promised results for your business.
A minimum viable product (MVP) is a minimally designed offering that tests your proposed solution against the market’s needs and willingness to fill those needs.. When you develop an MVP, you can use customer feedback as a metric that reveals areas in your delivery that need improvement.
Different industries can have come up with different MVPs that work best for their segment. For example:
- SaaS companies can have a Prototype Design or No Code MVP
- Product-based companies can come up with Mockups, Samples, or Branding details for their product.
- Companies that focus on the invention can create CAD Design as an MVP.
When done correctly, a minimum viable product can set the stage for future iterations of your products’ development moving forward.
Before you can completely release your products to the market, you have to test your MVP by releasing it to a few groups of potential customers. Releasing a prototype of your product is the best way to test its functionality and ability to meet user needs, which you can do in the following ways:
- Customer Interviews
- How-to Videos
- Pre-Order Landing Pages
- Social Media Surveys
- Paper Prototypes
- A/B Testing
- Product Demonstrations
- Software Testing
The methods above are just some of the tests you can do to judge whether your MVP prototype can deliver its promises and function to its intended design. The data you collect after testing your MVP prototype also serves as strong evidence that your development is going in the right direction, leading to a high chance of success with your first official product launch.
In its simplest definition, achieving product-market fit ensures your business can deliver something valuable to your customers. After all, it’s important to have willing customers who can truly benefit from your business before you pour all your time, resources, and effort into developing your products.
When you have a consumer base who desire your products above your competitors, then you’ve achieved every company’s dream of having a strong product-market fit. Every startup needs to strengthen this to build a foundation to scale up and succeed in their efforts.
Every household name in their industry earned their recognition by caring for their audience, so before you leap, be sure to have a good idea of your product-market fit. With this in mind, you can be on your way to catapulting your growth in your industry.
You will never know if you can make your dreams a reality until you try. The only downside is that sometimes, trying is not enough to grow and be successful. Every startup needs funding to bring its ideas to fruition but finding the right support can be tricky.
In just six weeks, Beanie & Blazer’s Test The Waters program can help you prepare and launch a trial investment crowdfunding campaign. We leverage the best practices from dozens of successful investment crowdfunding efforts and hundreds of investor discovery calls to help creators build investable companies.
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Beanie & Blazer does not provide investment advice and is not a registered investment advisor or broker-dealer. Investing in startups is risky, never invest more than you’re willing to lose.
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