What is the Main Goal of Reaching Product-Market Fit?
If you have been involved with startups it will not have been long before you heard the term product market fit. We are not going to discuss what product market fit is or how to get there. We have spoken about this elsewhere.
We want to spend some time focusing on a little asked question why do we need product market fit? What is the end goal?
You Have Market Fit but What Next?
The main goal of reaching product market fit is to move on to the next growth phase. This may seem self-explanatory but far too often there seems to be a desire to jump to the end and claim market fit achieved without having really demonstrated our success. This is a mistake and misses the answer to our question entirely.
The goal of market fit is to move to the next growth stage and begin preparing to scale.
Perhaps this is why so many are quick to jump to conclusions and get into the exciting stage of scaling.
To explain this point in more detail we should examine how having market fit achieves this goal.
To start we must provide a definition of what having market fit is and we will use the same definition as used in why product market fit is important
Product market is achieved when a business and product can successfully:
- Define a problem they solve for a specific market or market segment
- Demonstrate that the market or segment will pay for the product in order to solve the problem
- You have clearly defined what success means when using the product
- You can demonstrate customers achieve this success metric
- You have sold the product to multiple people with the same pain in the same market
- You know the numbers on acquisition and selling inside out.
When we examine any business that can achieve these steps it is possible for us to summarise their achievements into three statements:
- They have a clear market or segment who they can help in resolving a problem.
- They have proven they can solve this problem for the market and this market is willing to pay for the problem to be solved.
- They know how to sell and do so repeatedly
When a business has this knowledge within their team they are in an exceptionally strong position.
So the goal of reaching product-market fit is not just so we can begin preparing to scale but to do so with the greatest chance of success.