This is the only way to ensure your startup does not die
Finding product market fit is the one factor that will determine whether your startup graduates into a sustainable business, or whether it simply dies out.
Sometimes it’s tough getting through to the market…
You have taken the time, effort, and expense to develop the perfect solution for them, but they just
don’t get it. You have presented it to potential customers and/or clients, and they still don’t get
Finding product market fit is not easy or quick. It is a process of trying different experiments, failing, and then trying again. To help you solve this critical problem, we have the advice of Uri Levine who was our guest at this month's fireside chat. He knows exactly how to solve this problem because he has taken 2 companies over the billion-dollar mark.
As the cofounder of Waze—the world’s leading commuting and navigation app with more than 700 million users to date, and which Google acquired in 2013 for $1.15 billion—Levine is committed to spreading entrepreneurial thinking so that other founders, managers, and employees can build their own highly valued companies.
Here is what he says about figuring out product market fit.
THE PROCESS OF FINDING PRODUCT MARKET FIT
The first part of the journey for any startup is figuring out product market fit. If you don’t figure out product market fit, you will die, it’s as simple as that. It is tempting to think that you will find this fit overnight, but it’s actually a very, very long journey. It took 3 and a half years for Waze to figure that out.
It was 5 years for Microsoft to figure out that they don’t want to build a computer, but they want to build software for that, right? It was 10 years for Netflix to figure out this is what they want to do. So figuring out product market fit is a long journey.
It is only once you have found your product market fit that you buy yourself a ticket to the next part of the journey for your startup.
THE METHOD OF FINDING PRODUCT MARKET FIT
With the underlying assumption that there is any sort of multiple use cases, or higher frequency of use than once in a lifetime, then there is really only one indication that you have found product market fit: retention!
Before you get retention, before you get users coming back, you are not a product market fit.
At the beginning, your users are going to be new users. New users experience your product for the first time. Your team cannot experience your product for the first time anymore. So the only way to learn is actually to watch new business. Watch them and see what they are doing, and then ask questions. Ask them why you are doing this, and why you are doing that. That will give you the feedback you need in order to improve, and the next iteration of the product is going to address that issue.
Your method is essentially that you are going to ask people that fail, that are not using your product. Those that are using your product, for them you are a product market fit. For those that are not, you need to ask them a very simple question: "Why?"
This means that you need to watch them, and you need to reach out to them in order to be able to speak to them.
THE VALUE OF FAILING WHILE FINDING PRODUCT MARKET FIT
In order to increase the likelihood of being successful, you need to fail fast.
You need to think that this way:
- Failure is an event and not a person. If you think of failure as a person, you establish the fear of failure within the DNA of the organisation.
- The faster you fail, the more you uncheck experiments from the list. You are actually making progress with finding the one that is correct. Even if the experiment you tried is not the solution, by removing it from the list, you increase the likelihood of being successful.
You can watch the full fireside chat below. Uri shares his proven insights on product market fit, hiring and firing, and other valuable startup advice.
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