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What is Market Fit and Why Does It Matter?

Like in cards, when it comes to starting a business, an entrepreneur must know when to hold them and when to fold them.

One of the biggest differences between successful startups and those that fail is how soon they begin confirming that real demand exists for the product they’re offering. If you want to make sure you’re in the minority of startups experiencing consistent growth, give yourself the best start possible and make sure you have market fit before shipping the product. Keep reading to learn how to ensure a strong product-market fit.

*Product-market fit describes a scenario in which a company’s target customers are buying, using, and telling others about the company’s product*

What is Product-Market Fit?

The most simplified definition of product-market fit is in the name: your product fits into the market, is where it is supposed to be, and you grow your business because of it.

Product-market fit is when your customers become your salespeople. In business, it is a magical moment when three things happen:

Existing users recognize your product’s value.
They tell others about their great experience with the product.
Your company replicates the excellent experience for the new users.

After all, the end goal of likely every business is to provide enough value to customers that they become your advocates and help you grow your customer base.

Product-market fit is a well-known idea in the startup community. It 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 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.

The Importance of Product-Market Fit

Paying attention to market fit, sometimes called product-market fit, is what keeps us from selling dentures to people with teeth or snow shoes in the deserts of Rajasthan.

Like in cards, when it comes to starting a business, an entrepreneur must know when to hold them and when to fold them. In this regard, we cannot overstress the importance of product-market fit for entrepreneurs.

Product-market fit is important because, until that point, you don’t know whether or not what you are building solves a real problem that a large enough market has. Without clarity on this, you could continue investing in building something that is not commercially viable. Worse still, you could burn cash by hiring prematurely or investing in sales and marketing that will not generate a return (premature scaling is often cited as one of the main reasons startups fail).

The effort of confirming product-market fit has several upsides, many of which go beyond avoiding the time, expense, and raw pain of backing a poor idea. Benefits include:

You gain the opportunity to make changes and serve a real need in the market.
You gain a valuable tool that you can use to attract investment.
Confirming your assumptions is great for morale and can motivate you to keep going when things get tough.
If you have an in-demand product, you will have an easier time finding business funding that can help you accelerate your company.

*when it comes to starting a business, an entrepreneur must know when to hold them and when to fold them.*

The Downsides of Poor Market Fit

Failing to challenge your assumptions is highly risky. So, here are some downsides of a poor market fit.

Burning money and wasting time: However passionate you may be about your product, the sad truth is that potential users may not feel the same. Learning that sooner rather than later saves you resources (time, as well as the treasure) to pursue a project that can succeed. Give yourself that opportunity.
Wasted potential: Your product might have been transformative with just a few adjustments. However, by not doing the research and analysis to ensure a good market fit, you deny yourself the information you need to make vital changes (which might be small) to your product or target market that could lead to astonishing success.
Lack of a clear business case: The startup market is highly competitive. While it’s hard to quantify, there are potentially thousands of competitors for each segment of the market who are hungry for the funding they need to put rockets under their enterprise. So, when you go to an investor, don’t bring a knife to a gunfight. Instead, have real research in your pocket that shows you’re a winner, or be prepared to lose out to your better-prepared competitors.

Conclusion

Building a business is hard. Knowing you’re on the right path is motivating. When it’s good, it’s good. You can see your way to the finish line, believe in yourself, and have every confidence that your hard work will pay off.

We hope you found this guide helpful. Now it’s time to turn that knowledge into business results.

How to Approach Product Design?

When it comes to the product design process, there’s no one-size-fits-all solution.

When it comes to the product design process, there’s no one-size-fits-all solution. An entrepreneur must tailor the process to fit the business and functional needs of the project.

This article explores the concept of product design and outlines four widely used approaches to product designing.

The only important thing about design is how it relates to people.” – designer, educator and author Victor Papanek

What is Product Design?

Product design is the process of identifying a market opportunity, clearly defining the problem, developing a proper solution for that problem, and validating the solution with real users.

In simple words, product designing is creating and designing products that address a specific requirement and solve a problem. It provides a comprehensive understanding of what the final product would look and feel like and what problem it will solve.

Who are Product Designers?

Product designers are creative design professionals who use their abilities to develop digital products that address the unmet demands of users.

A product designer gets to wear multiple hats, which means your day-to-day will never look the same. As a product designer, you play the role of a problem solver, researcher, designer, product manager, data analyst, and marketer.

To create useful products, a designer experiment with and tests multiple versions of the same product. It helps a product designer identify improvements. Also, they understand the company’s products, user requirements, and production costs to execute high-quality product designs at an affordable rate. Usually, product designers work in smaller groups or independently to conduct market research and gather the information required to design a digital product.

Four Approaches to Successful Product Design

Designing a great product doesn’t happen overnight. An entrepreneur can take many product development strategies to reach a breakthrough design. Here are the different approaches to designing a new product.

Traditional Business Approach

The traditional business approach considers two factors when designing a product — Will the product be viable, i.e., how does it benefit the business? What is the operational and technical feasibility of the product design? Using the traditional business approach to design, a company would identify a problem (or a set of problems) and then derive what the company thought it could offer as a profitable solution.

The traditional business approach to product development strategy seems straightforward but doesn’t always bring success. It focuses on the how and what rather than the why. It doesn’t answer a key question, i.e., why does a customer need a product? The metrics for product design emphasized in the traditional business approach, namely viability and feasibility, are company-centric and inconsiderate of the consumer needs.

Design Thinking Approach

Design thinking incorporates the user experience into the design process, moving beyond the simple look and feel of product design. IDEO founder Tim Brown popularized design thinking. He describes it as a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.

One of the aspects of design thinking that makes it successful is the prototyping phase. Designers can help lower the risk of launching a new product by testing the product design with small groups of users throughout the development process. A prototype helps validate that the product is something a customer can understand and use and that the design is appealing before the product goes to mass production.

Lean UX Approach

The Lean Start-up and Lean UX approaches take design thinking further, putting the prototyping process front and center. Lean start-up is an approach to starting a business venture that takes an idea, translates it into a product or service, measures how customers respond, and then takes the learnings to pivot or iterate. Lean UX takes that same approach and applies it specifically to design.

This approach focuses on the human experience behind the design. The deliverables of the entire product development strategy are less important than the learnings the design process delivers. The core objective is to obtain feedback as early as possible to make quick decisions and improve. It’s a collaborative approach – as if the customer is designing the product alongside the company. The drawback is that this approach to design can ignore other factors related to development; Lean UX can lead to somewhat of a product design bubble.

Good design is good business.” – retired IBM CEO Thomas Watson, Junior

Design Sprint Approach

The design sprint is a subset of the design thinking approach. There are five phases to the design sprint process that takes place on five separate days: Map, Sketch, Decide, Prototype, and Test.

Design sprints focus on a small part of the problem, or one aspect of the design, rather than building a completely new product. The process allows designers to work with their customers in the prototyping and testing phases and to learn quickly – within five days – to continue to design a winning product. Design sprints integrate elements from the other approaches but with a more focused, disciplined aspect to product design.

Conclusion

The most important thing to remember when designing products is that design is for people. You must deliver the right features with the right user experience for the right people to achieve great product designs. Thus, define your target audience, then research their problems, and, finally, focus on building a product that solves those problems!

Five Steps to a Successful Product Launch

A well-planned product launch strategy can also help improve the company’s reputation.

So you have aced the task of identifying and developing a product you believe in. So, what’s next? Do you want to launch it to market? Well, launching a new product is no easy feat!

Countless new product and service ideas are conceived every year. But most ideas fail to succeed because they’re not brought to the market properly.

If you think having a recognizable brand name guarantees the success of a product, you’re most certainly mistaken. Many highly recognized companies failed the product launch step, including the Samsung Galaxy Note 7 and Amazon Fire Phone.

On the contrary, other well-known brands have been a raving success with product launches, including Apple, Google, and Under Armour. Then there are brands we had never heard of before but suddenly became household names due to successful product launches. These include Magnum Icecream and FiberOne.

*Planned Product launch strategy can also help improve the company’s reputation*

Product Development Process: A Step-by-Step Guide

The six stages outlined above will get your team through all steps of the process, from initial idea screening to the development phase.

Bringing your vision for an original new product to life is frequently one of the biggest hurdles for aspiring entrepreneurs.

However, it has become crucial for businesses to keep updating their products to conform to current trends. The business environment is dynamic and competitive, and new product development is one of the best ways to withstand competition.

What Is the Product Development Process?

Product development encompasses all steps to take a product from concept to market availability. It is the overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product.

Product development requires the work and input of many teams across a business, including Development, Design, Marketing, Sales, Finance, and Testing. Product managers act as the strategic directors of the development process and oversee the progress.

Bringing your vision for an original new product to life is frequently one of the biggest hurdles for aspiring entrepreneurs.

Conducting Market Research: A Guide

Today, we live in a consumer-driven world, and businesses face cut-throat competition to survive and succeed in the market.

A company cannot succeed without understanding the consumer’s needs and behavior, so it relies on intensive backend market research. Market research not only tells a company what to produce, but it also tells how to present the product to the consumer. Work doesn’t end here. Once the product is out in the market, market research is conducted to gather information about customer feedback so that the company can make necessary changes to increase its reach.

If you’re new to market research, this guide will provide a blueprint for conducting a thorough study of your market, target audience, competition, and more.

Ways To Get Funding For a Business Idea

Lack of funding is attributed to be one of the common reasons behind failed businesses.

You just came up with a great new business idea – great! But is a great idea enough for a successful business?

If that’s what you believe in, it’s time for a reality check, my friend.

Coming up with a great idea is the first step to becoming a successful entrepreneur. Now you need to work on turning that idea into a reality by funding it, taking it to market, and letting your business change the world. According to a recent study, over 94% of new businesses fail during the first year of operation. Lack of funding is attributed to be one of the common reasons because money is the bloodline of any business.

Top 5 Government Schemes For Funding Startups in India

The Indian government has launched the following schemes to promote and support entrepreneurs in their startup journey.

Introduction

For entrepreneurs, the easy availability of capital is an important factor that affects the enterprise’s growth. Many business ideas do not come into existence because of a lack of working capital. To curb this situation, the Government of India has launched several schemes for funding startups. Through these schemes, the government provides financial assistance to entrepreneurs.

About Startup Funding

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. Instead of raising funds from third parties, some startup founders go for bootstrapping (to prevent debts and equity dilution). However, most startups raise funding, especially as they grow larger and scale their operations. A startup here means a company built to grow fast, and a high-growth company almost always needs to burn capital to sustain its growth before achieving profitability.

India is gradually on its mission to build a robust startup ecosystem by launching government schemes for funding Startups.

How to Get Funding for a Startup?

Diversifying your sources of financing will allow your startup to meet your specific needs.

Introduction

To grow a startup business, it is inevitable that you will need funding. Launching any business requires capital investment. 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.

If you’re wondering how 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.

About Funding

Without startup funding, the vast majority of startups will die. A startup here means a company that is built to grow fast, and a high-growth company almost always needs to burn capital to sustain its growth before achieving profitability. There are, of course, exceptions who successfully bootstrap (self-fund) themselves.

An entrepreneur without funding is a musician without an instrument.”

Steps to take an idea to market

While a good business idea will have an impact on all phases of a company’s development, other entrepreneurial efforts also play a role in shaping the future.

Everything begins as an idea. Whether you’re in business, school, jail, or debt, that’s how it all gets rolling. But what is the true significance of an idea? An idea is a thought or collection of thoughts generated in the mind. Ideas often form during brainstorming sessions or through discussions.

All world-changing events and great success stories can be traced back to a single idea. But don’t fall into the belief that having a great idea is all you need. If you have a great idea, then you’ve completed the first step of becoming a successful entrepreneur. Now you need to work on turning that idea into a reality by taking it to market and letting your business change the world.

A business idea is a starting point for any current or future entrepreneur. It is necessary because it marks the start of a new life – the life of a business and an entrepreneur.

While a good business idea will have an impact on all phases of a company’s development, other entrepreneurial efforts also play a role in shaping the future.

This post covers all the necessary steps for an entrepreneur to take an idea to the market.

A business idea impacts the overall development of the company.

How to Know if a Product is Marketable?

You might think your product or service will sweep the market away, but without having a foundation of information about your customer’s wants and needs, you can’t know if your product will do well.

Thousands of new products launch every month. Yet only a fraction of those gets enough traction to be considered successful.

Knowing whether or not your product will sell is one of the biggest questions in marketing. You might think your product or service will sweep the market away, but without having a foundation of information about your customer’s wants and needs, you can’t know if your product will do well.

In this article, we explore the concept of product marketability and ways to know whether your product is marketable.

Conducting market research can help you learn how many consumers or businesses could use the product

What Is Product Marketability?

Marketability is essentially a measure of whether a product will appeal to buyers and sell at a set price range to generate a profit.

Marketing techniques include public relations, advertising, trade shows, collateral production, and other functions such as product quality assurance and documentation.

Product developers should complete a marketability evaluation before attempting to market products. Doing so helps marketing managers and other executives determine whether the product is marketable in the current and future market.

4 Ways to Know if Your Product is Marketable

When starting a business one of the big questions you’ll want the answer to is, “How can I know if my product will sell?”

There are several ways to know if your product will sell before creating it. These methods don’t guarantee success but will dramatically increase your odds.

Conduct Market Research

Researching to determine if there is a market for your business is key to successfully selling your product.

We recommend you do some market research before devoting too much time and money to the business. Conducting market research can help you learn how many consumers or businesses could use the product. Once you’ve determined the demand for your product, ensure that it can be made and supplied at a low enough cost that your retail pricing is affordable. It can also help you assess your competitors, which will exist regardless of how unique you believe your innovation is.

Listen to the Market

If you are in the business world, you need to accept that customers in the market determine the fate of your company’s success. Customers have the final word when determining whether an item is purchased or not. Getting to know the market before you begin selling your product can give a clearer outline of what you will experience.

Once you have a better understanding of the market you are about to dive into, you can make better business decisions on how to approach the market.

Your target customer should serve the base upon which all other concepts are built. After all, your consumer determines your product’s success.

Test Your Product

Some of the biggest companies test their products before introducing the product to an entire market. You can create a prototype and begin with small testing either online or in select stores. It will help you answer questions to a degree that research may not. Getting customer feedback can help you tweak your product or idea before mass producing something that might fail.

If your target customer enjoys your service and offers good feedback, you know you’ve got a marketable product.

Find the Right Price

One of the most impactful product marketing tactics is pricing. Product price gives your product a status (affordable or high-quality), an audience (based on disposable income), and competitors. Use your product, audience, and competitor research to identify the perfect price point for your product, considering product costs and profit margins. Keeping up with market trends will help you determine if you should raise your lower your prices.

The key to determining your price is that it needs to sustain your business. If you price your products at a loss or an unsustainable profit margin, you will find it challenging to grow and scale.

There are other important factors that your pricing needs to account for, like how you’re priced in relation to your competitors, and what your pricing strategy means for your business and your customers’ expectations. But before you can worry about anything like that, you need to make sure you’ve found a sustainable base price.

Product price gives your product a status.

The Product Manager Roles

The product manager is in charge of determining a product’s marketability and is ultimately responsible for its success in the market. In terms of determining the marketability of a product, the product manager’s responsibilities include product conception (product market and market research), product development, product launch, product sustaining, and product discontinuance.

Wrapping Up

People often laud entrepreneurial risk-taking. Indeed, starting a business requires a leap of faith. However, it is important to remember that people who took a risk and lost it all tend to keep their failures to themselves, and thus we only hear about those who have succeeded.

We recommend that you start your own business only when you’ve done your research and are confident you will succeed instead of underestimating the risk involved in starting a new business.