i2mf Research Team, Author at i2mf.in blog

How to Validate a Product-Market Fit?

Have you ever thought about how to establish a business when you’re unsure whether your product will meet market demand? If you’re an entrepreneur, you’ve almost certainly done so. Finding the ideal approach is difficult, whether you’re disrupting the industry with creative ideas or tackling issues in your unique way. That is why the majority of businesses suffer in their early phases of development.

To bring your product strategy to light, every product must be validated for product-market fit before launch and through successive iterations. Every company needs to validate its product-market fit to go further in the product development phase.

In this article, we explore ways to validate a product-market fit. But before we do that, let’s understand what a product-market fit is.

The goal of a product-market validation is to reduce risk and validate a product concept within its intended market.

What is a product-market fit?

Product/Market Fit is a well-known idea in the startup community. While it is commonly used in discussions about new high-growth businesses, it does not appear to have caught on in the rest of the business world.

Product-market fit refers to a situation in which a company’s target consumers buy, use, and tell others about its product in sufficient numbers to keep it growing and profitable. It is the degree to which a product satisfies strong market demand. Product-market fit happens when you successfully identify your target customer and serve them with the right product.

What is product-market validation?

The most important milestone for a business is the confirmation of a Product-Market Fit (PMF). It entails demonstrating that the product has progressed to a point where the market is willing to purchase it. While founders are focused on consumer research and product creation before Product-Market Fit, but post it, they may attract larger investments, ramp up marketing operations, and accelerate the company’s growth.

Most product ideas sound fantastic in our heads, but many fail the moment they reach the hands of a client. Because entering the market with a new product is always risky, real-world user testing is an essential pre-launch duty. The goal of a product-market validation is to reduce risk and validate a product concept within its intended market.

When people are satisfied with the core product’s utility and usability, product-market fit is accomplished.

Ways to validate product-market fit:

Here we will look at some of the ways to validate product-market fit:

Look at similar market trends

If the market you’re evaluating is slightly comparable to another market that already exists, research patterns in the more established market. Determine what works and what doesn’t, and then include that format into your offering. For example, if you are developing a yoga app, look at popular fitness applications rather than attempting to discover something entirely different, such as an app for sports vehicles.

Listen to feedback

The greatest method to truly grasp what your target audience desires is to listen to their input. If you are confident about your product’s capacity to address an issue, you should not be afraid to invite people to offer comments on it. Hearing what others think about your product can help you discover its strong and weak features.

Conduct customer surveys

Conducting surveys is an excellent technique to get a large amount of information. Using Google Consumer Surveys is one solution that will help you to keep prices down while keeping accuracy. You may learn what your users/customers think about your product and why they like or dislike it.

A well-designed survey can quickly (and inexpensively) help you develop insights into the preferences and behaviors of your target audience. Sending your survey just to your most enthusiastic or engaged consumers, for example, can distort your results. If your budget allows, use a marketing survey firm to assist with outreach and identifying the best responders.

Focus on customer engagement

Customer interaction is the most effective technique to determine whether a product is suitable for its target market. According to studies, goods that can successfully engage their users/customers will prosper. If you are enthusiastic about your product, you should have no trouble attracting adoring admirers who are prepared to tell everyone they know about it.

When you can preview new products or products in development to existing clients to measure their reaction or degree of interest, the magic takes place. Existing clients are already advocates of your company and usually have a keen interest in what’s to come.

Focus on customer retention

The greatest approach to assessing product-market fit is via retention. If you can keep your users, you can be confident that they love using your product and will continue to do so for a lengthy period. A high retention rate indicates a consistent cash flow and long-term prosperity.

A few things to remember during this journey are:

A product will prosper only if it answers consumer needs and offers a compelling value proposition.
Many products don’t sell well because product managers fail to test them thoroughly enough before launching.
Too many organizations, especially during the post-launch phase, spend more on advertising a product than on guaranteeing its functionality, and as a result, the product fails.

When it comes to evaluating a product and finding a market fit, marketing is a valuable tool. So, take the time to investigate and test your theory before launching your big idea into the market.

What is a Product-Market Fit?

Product-market fit is a well-known idea in the startup community. While it is commonly used in discussions about new high-growth businesses, it does not appear to have caught on in the rest of the business world.

Product-market fit refers to a situation in which a company’s target consumers buy, use, and tell others about its product in sufficient numbers to keep it growing and profitable. It is the degree to which a product satisfies strong market demand. Product-market fit happens when you successfully identify your target customer and serve them with the right product.

How to Achieve Product-Market Fit?

One of the most crucial goals for a business is to achieve product-market fit, yet it is also one of the most misunderstood notions.

According to Dan Olsen, a product management specialist and author of The Lean Product Playbook, product-market fit is the point at which a firm has produced a product that provides significant value for consumers.

In his book, Olsen proposes a six-step framework termed the Lean Product Process that can help get your team started:

1. Determine your target customer

The first step is to determine the target customers. Target customers ultimately decide how well a product meets their needs. We need to use market segmentation to clearly define the target customer. The splitting of the entire market into market segments, which are made up of potential customers with similar wants and behaviors, is known as segmentation.

This process has four steps: Analyzing your product or service, Familiarizing yourself with your competition, Choosing segment criteria, and Performing research.

2. Identify underserved needs of that customer

Once you’ve created a target customer hypothesis, the next stage is to figure out their unmet needs. Determine the exact requirements for a solid market opportunity. In order to provide value to clients, address any needs that are not being satisfied appropriately.

3. Define your value proposition

A value proposition defines how a product will fulfill consumer demands better than the competitors. It helps to determine which client wants your product can meet. Determine which of your product’s distinctive characteristics will excite customers and how your product will surpass the competition.

4. Specify minimum viable product (MVP) feature set

After you’ve determined your value proposition, the following stage in the Lean Product Process is to select the feature set for your minimal viable product (MVP) candidate. You will not begin by building a new product that delivers on your whole value proposition since it would take too long and be too risky.

This strategy focuses on developing what is required to provide enough value to your target consumer to prove that your product is on the right track.

5. Develop your MVP

You’ll want to test your MVP candidate with clients once you’ve determined the feature set. To accomplish so, you’ll need to develop a user experience (UX) that you can display to potential clients.

The Minimum Viable Product, or MVP, is a development strategy in which a new product is brought to the market with basic characteristics that are sufficient to pique the interest of consumers. Only after receiving adequate feedback from the product’s early consumers is the completed product offered to the market.

6. Test your MVP with customers

Once we have created the MVP, the next step is to gather valuable feedback from the users.

Observe what the target client says and does while using the prototype during the test. To elicit deeper insights and maximize the value of user tests, ask clarifying questions.

Product-market fit is the degree to which a product satisfies strong market demand.

How to Measure Product-Market Fit?

In theory, you may test product/market fit through surveys that determine what proportion of your consumers consider your new product to be a “must-have.” However, product-market fit is more about an in-depth and realistic grasp of who your consumers are and how they feel about you and your product than it is about hypothetical statistics and percentages.

Is it creating organic growth, where people spread the word on their own? Are people willing to pay for your product? If they are, you have a product-market fit.

Your product/service will most likely satisfy a tiny part of the market as a startup or early-stage firm. If you want to acquire this knowledge in the first place, you must first establish a relationship with your consumers and communicate to them (over and over again).

Who is Responsible for Creating a Product-Market Fit?

We usually link product-market fit with product management and marketing, but, in reality, achieving it is a company-wide effort. All departments contribute to the company’s achievement of this significant milestone, including sales, business development, support, and finance.

What is a go-to-market strategy?

You’ve got a surefire idea. Maybe it’s for a brand new business, or perhaps just a new product or service at your current company. Whatever it is, to make your dream a reality, you need a go-to-market strategy.

The go-to-market strategy is an action plan that outlines the steps an organization will take to launch its product in the marketplace, achieve its key value propositions, satisfy customers, and meet its revenue and profit targets. It helps define the ideal customers and specifies how a company will go about releasing a new product, promoting it, and ultimately selling it to its customers.

The following elements comprise a product’s go-to-market strategy:

Methods and channels of sales
Training the sales and support team
Pricing strategy
Budget for product launch and marketing

The go-to-market strategy is an action plan that outlines the steps an organization will take to launch its product in the marketplace

Benefits of Using GTM Framework

How to Raise Money for Startup?

Even the most creative ideas or business plans can only help a startup business progress so far. To grow a business, it is inevitable that you will need funding.

Launching any business requires capital investment, whether the startup is any type of MSME or large enterprise. There’s a need to purchase equipment, rent offices, hire staff, and, most importantly, grow.

So unless you’re independently wealthy, you will require outside capital to do these things.

But where to start? If you’re wondering how and when to raise money for a business, you’ve come to the right place. In this guide to startup funding, we’ve compiled a list of some business fundraising channels you can take advantage of.

Fundraising is a necessary and sometimes painful task most startups must periodically endure.

Why raise money?

Funding refers to the money required to start and run a business. It is a financial investment in a company for product development, manufacturing, expansion, sales and marketing, office spaces, and inventory.

How to take a business idea forward?

While many people have great business ideas, a small percentage of those actually follow through on them.

You just came up with a great new business idea – so now what?

If you are intent on getting your idea off the ground, this article is for you!

While coming up with great ideas isn’t easy, putting those ideas into action is much more difficult. In order to turn your dreams about the next best service or product into a tangible, valuable reality, you need to take the right steps.

What is a startup company?

Is a startup a company that has just started? Is it a smaller version of a large corporation? Is a startup a tech company necessarily and is every new tech company a startup?

With some startup or the other raising eye-popping investments from big venture capital firms every other day, there’s a lot of interest in and noise around startups. And there’s an equal amount of confusion as to what they really are. This article takes a look at all the things that make a startup a startup, beginning with answering the question: What is a startup company?

Startup employees sitting around a table with laptops — **A startup is a young company with many unique features**.

A. Definitions of a startup (including under the Startup India initiative)

B. Difference between a startup and a small business

C. Difference between a startup and a mature company

D. Features of a startup

Innovation
Growth intent
Business model
Uncertainty
Risk
Funding
Exit

E. Common questions about startups

Are only tech firms considered startups? Is every tech company a startup?
How do startups get funding? Does every startup need external funding?
How many founders should a startup have?
What are the stages of a startup?
When does a startup stop being a startup?
What is a unicorn startup?

A Beginners’ Guide To Product-Market Fit: Meaning, Definitions And Examples

What’s common between Kodak and Micromax? They were both business leaders once – Kodak in the global film camera market, and Micromax in the Indian smartphone market. But then something changed and both the companies lost favor with the customers.

What changed was not the product the companies were selling. What changed was the needs of the customers. Where what the two companies were once selling matched with what their customers needed, there came a time when the market no longer wanted the product the companies were selling, and the companies failed to offer a product the market wanted. In the case of Kodak, it was the shift in consumer taste in favor of the digital cameras. In the case of Micromax, it was a change in consumer demand from 3G- to 4G-enabled devices.

Everything You Wanted To Know About Problem Statement for Startups

All startups solve a problem, but only a few talk about it when asked what problem they are solving. Counterintuitive but true. In their zeal for the solution to the problem, startup founders tend to become preoccupied with their product, so much so that they lose sight of the very problem that prompted them to find the solution in the first place.

Not remembering the problem you are solving is itself a problem. Your product may be your labour of love, something you attach a lot of emotional value to. But your target customers may not feel the same way about it as you do. For them, it has value only and only if it solves a problem that bothers them or fulfils a need they have. What they want is not a product that is up for sale but a solution that solves their problem.

This brings us to the question as to what a startup problem statement is.

How To Find A Problem Worth Solving?

Ideas are the raw material for innovation. But it doesn’t suffice merely to have great ideas. What entrepreneurship calls for is ideas that can work. What that essentially means is that your ideas are good if and only if there are any takers for them. Ideas that solve real-world problems always have takers. So, it’s not ideas that you base your business on. It is problems that need solving that you base your business on.

One of the most important things you can do to insure your startup against failure is to identify a problem before you create a solution. So, the question is: How to find a problem worth solving? Over the next few minutes, we will go over a series of questions which will help you find a problem that needs solving.

Top 10 Reasons People Become Entrepreneurs & Why You Should Become One Too

There is a special appeal about entrepreneurship. Starting a venture of your own, being your own boss, doing things you love… what can be more charming than living life on your own terms? So many people dream of becoming entrepreneurs; yet so few actually choose to become one. After all, giving up the financial security of a job to embrace the risk and uncertainty of entrepreneurship takes courage. But for those who dare to take the road less traveled, entrepreneurship offers rewards that are unmatched by any job.

There are dozens of reasons why people become entrepreneurs. Here are the top 10 ones that successful entrepreneurs cite as to why they chose entrepreneurship as a career.

Author: i2mf Research Team