A stepwise approach for your idea- to product-market-fit process
We always talk if or if not someone has product-market-fit. But what about the process of getting there?
When you’re starting out, your one and only aim is to reach product-market-fit.
To do that you need to talk to customers.
But when you are doing this “talking to customers”, it’s really hard to know if you are actually on your way to reaching product-market-fit.
Teams often end-up in a situation where customers are not getting excited and buying, but they don’t know whether their product is wrong, the target customer is wrong, or the person they are talking to is wrong. How do you know what to change?
To help in troubleshooting where the issue lies, in my experience, it helps to do your problem validation in different steps, so that you get a clear picture of your path to product-market-fit and you can troubleshoot and iterate.
Validate these things stepwise and you’ll know where your problem lies. If you can’t nail one of the steps, don’t move forward before you know why. Do all of this before building.
Problem & Pain: A problem has to be painful enough for a specific ICP
Value: Solving the problem needs to be valuable (=there’s money)
Explanation-problem-fit: Your customers need to understand that your solution solves the problem
Value-problem-fit: Your customers need to understand that your solution brings the value of point 2
Buying journey-fit: Can they buy, can you get all stakeholders to your side?
Now let’s walk through those steps in more detail:
1. Validate problem & Pain
The goal here is to make sure that someone has the problem you want to solve. Can you find 10 customers of a certain type (your ICP) that articulate the problem? This is iterating on type of customer and problem.
Here, it’s essential that customers themselves articulate the problem. You should not put words in their mouths. And you need to get the customers to explain their problems themselves.
A great book to read on the subject is The Mom Test by Rob Fitzpatrick.
For your business to grow fast you need this to be a top-of-mind issue that the customer is eager to solve. If it’s just somewhat interesting not enough customers will actually take the time to start using your product. It’s often said that it should be a top 3 issue but I’m not sure that’s entirely valid.
You will need to talk to customers for as long as it takes that you find a certain type of ICP* (ideal customer profile) that articulates the problem you want to solve. If you can’t get their, start again with something you’ve found.
2. Validate Value
So now you know that your ICP actually has the problem.
Next step is to make sure that the problem you are trying to solve helps your customer reach their goals and has a monetary value for them. This discussion is much easier and better to have before showing your product so that it’s not actually a pricing question, but try to understand how the customer views the value of solving the problem. When you know the value, that will help you set the right price. If you can price at below 50% of the value you should be good. You can increase prices later.
If an organisation can forego hiring 20 people over the next 2 years because of your product, that is very valuable. Or if they can directly see improvement in revenue, that's even better.
You need to
3. Validate explanation-problem fit
At this point you have validated that the customer has the problem and that there is a clear monetary value in solving it.
Now you can get to building your mockups for the solution.
Now, can you get the customer to understand what you are building will solve the problem? Do they get excited when you show the mockups?
“Do you think this solves problem X”? → You should get to yes here.
4. Validate value-problem fit
Now you have validated that they agree that your product solves their problem. Still you need to make sure they agree that it brings the value that was assigned to solving the problem in step 2. This might seem repetitive, but keep iterating and validating. These things are hard, and your company’s future depends on it. Keep focused.
“What do you think this product can accomplish for you”
Do they say “ok, with this product, I can see that we can do X”
so “Does that bring you the value we discussed before, will you be able to save Y/ make Z?”
You’re kind of already in the sales process here… but before you have the product.
5. Validate buying journey - fit
Ok, so now that your customer has validated that there is value with your product, are there any other things that would come in the way of buying?
Is there a budget for this? Could you buy this yourself? Who else needs to be involved? What would the process be like?
If your product really solves a painful problem for your customer, they will be eager to help you understand how you can get the product in their hands.
Summary
So now you have several customers you have validated your idea with, you’ve validated the value and how they would buy - Now you can start building.
And if you’re in Finland, Sweden or Estonia and you’ve gotten this far get in touch and we’ll be eager to hear about your validation process.
*ICP, Ideal Customer Profile, explanation of who your customer is that you start with, usually you want to be as specific as possible in the beginning to increase velocity then broaden out. For example “HR manager in an IT consultancy with 50-100 people” (role, industry, company size).
End.