Product Market Fit and Minimum Viable Product
How to set up your international expansion strategy and find Product Market Fit and Minimum Viable Product.
It is a starting point before designing your International Digital Marketing strategy
Start-up vocabulary related to Growth and Scaling
- PMF, MVP, Traction,
- Grind, Growth Hacking
- LifeTime Value, AARRR
- Early adopters, Net Promoter Score, Scorecards
- Method ICE, OKR, Churn & CAC
- Blue Ocean , ABM
- Series Seed ABCD, Deal Flow, Bootstrap
In contact with Tech entrepreneurs, or VC’s (Venture Capital), we are each time surprised to see how much the marketing language but also management practices are changing. This until becoming totally odd for the uninitiated.
But if there are concepts to perfectly master to develop your business internationally, check the Product Market Fit and Minimum Viable Product
What is Product Market Fit (PMF)?
This is one of the first steps, certainly the most important in the life of a Start-up. It will consist in designing your core product or service so that it can meet the market needs (its consumers, its buyers, its targeted users).
A good PMF is the natural, spontaneous or even viral adoption of its product.
Does your business idea respond to a strong need, an undeserved or new demand?
Is this product well understood, is it able to trigger a quick purchase.
Is it likely to “scale” or grow. In other words trigger a repetition of use or a recurrence to create enough value?
In short, the Product Market Fit is a Crush between the Product and the Market
Product Market Fit is the matching, one might say, a “love affair” between a product or service and its market. The best “Product Market Fit” are at the origin of the greatest entrepreneurial successes.
Summary: PMF = Understanding + Buying + Sharing
The 6 steps building your Product Market Fit
- Determine your target customers
- Identify underserved customer needs
- Define your value proposition
- Specify your minimum viable product feature set (MVP)
- Create your MVP prototype
- Test your MVP with target customers
Some tips to do these steps well:
- Your value proposition is your blueprint for how your product will meet customer needs better than alternatives
- Customers will assess your product against alternatives, so the relative degree to which your product meets their needs depends on the competitive landscape
- Iterate to improve product-market fit
How to evaluate and measure your Product Market Fit ?
To measure PMF, the Net Promoter Score (NPS) method is often used.
a panel is asked: “how likely are you to recommend company/brand/product X to a friend/colleague/family member?
For example: if you have 25% Promoters, 55% Passives and 20% Detractors, the NPS will be +5.
A positive Net Promoter Score (>0) is considered an indication of good adhesion to your product.
Another method developed by Sean Ellis is to ask about the level of frustration of users by asking them:
“How would you feel if you could no longer use this product?
The Ellis Test
According to the Ellis Test, if 40% or more of your users say they would be “very disappointed,” then you’ve probably achieved Product Market Fit. This score is the result of a study of several hundred Start-ups. The other proposals are “a little disappointed”, “not disappointed”, “N/A do not use this product”.
Product Market Fit validation
PMF validation process is not limited to statistical or economic indicators. It is above all the review of “cultural” factors that is decisive.
These factors are related to Geography, the targeted Generation (in BTC and Persona in BtB) and their behaviors.
We thus see the proposals for new products and services built specifically around the different generations (Millennium, Generations X, Y, Z, etc.). They are often the early “adopters”.
If American companies remain masters in the art of imposing their innovations, it is of course partly because the US culture is standardizing. It is relayed by a financial power which makes it possible to project this culture and its uses on a world level very quickly.
This is one of the reasons that drives many of the Start-ups to quickly open an office in New York, Boston or LA.
Delaware is also very interesting in terms of taxation and administration.
It is also necessary that this incorporation is not guided by a fantasized vision of the American market. Our many years in the USA have taught us both the difficulty and the potential for acceleration on this market.
The Good Product Market Fit
The good PMF is one that leaves no room for doubt, whether you are positioning yourself in a niche or in a mass market. If necessary, it is required to pivot quickly, that is to say to change the value proposition or the economic model.
Top Strategies and Resources of Product Market Fit
The best practices and strategies to set up your Product Market Fit with following resources
Recommended 10 best readings on Product Market Fit
- The only thing that matters – Marc Andreessen
- The Revenge of the Fat Guy – Ben Horowitz
- How Superhuman Built an Engine to Find Product/Market Fit – Rahul Vohra
- 12 Things about Product-Market Fit – Tren Griffin
- Using Product/Market Fit to Drive Sustainable Growth – Sean Ellis
- The Idea Maze – Chris Dixon
- Zero to Product/ Market Fit – Andrew Chen
- Do Pivots Matter? – Steve Blank
- The Never Ending Road to Product Market Fit – Brian Balfour
- Product/Market Fit: What it really means, How to Measure it, and Where to find it – Eric Jorgenson
Top 7 Product Market Fit videos
- How to Find Product Market Fit – Peter Reinhardt
- Finding a Compelling Product Market Fit – Andy Rachleff
- A Playbook for Achieving Product Market Fit – Dan Olsen
- The Foolproof Formula for Finding Product-Market Fit – Rahul Vohra
- The Art of Pivoting Towards Product/Market Fit – Hiten Shah
- The Real Product Market Fit – Michael Siebel
- Product-Market Fit Redefined – Ann Miura-Ko
The Top 3 Books on Product Market Fit & Minimum Viable Product
- The Lean Startup – Eric Ries
- The Lean Product Playbook – Dan Olsen
- Competing Against Luck – Clayton Christensen
Minimum Viable Product (MVP)
Behind this term, hides a broad product development process.
Defining your MVP is a methodology which consists in using the minimum of effort and resources to propose to the user a solution that will fit the unique and essential features he needs. A basic solution for a maximum adoption by early adopters.
Definition of Minimum Viable Product
Experience and Evaluation
This is how customers receive an idea. But this assessment, rather than being based on opinions, is based on behaviors.Th behavior translating into an intent byuing decision.
It consists of quickly validating that the idea, the product, the service offers a unique and essential characteristic. The given features ultimatly solve the problem, the use or the need of a user. And if it’s not the car allowed to develop this product and this service before deploying a later or final version. This will eventually lead to “pivoting” to another solution or feature if the user’s response is not satisfactory.
The Grind, a technique to find its Minimum Viable Product
The Grind is the action to sift through all the characteristics to keep the only essential ones. There is a lot to learn from American SaaS start-ups. They have the art of simplifying to focus on efficiency over functionality.
A methodology to define its value proposition is to apply the 4 Blue Ocean lines of action:
Ocean Blue Grid
Most products and applications, are used for a very limited part of their functionalities. These “expert” functionalities essentially have a marketing role (who can do more can do less).
Technological and Cultural Aspects
The revolution of collaborative and digital economy is both technological and cultural
New methods bring a new language imported from Silicon Valley. New generation of founders contribute to a new art of management that is more dynamic, more agile, more direct.
To find your way around, some essentials: Agile mode, Test & Learn and Fail Fast.
The Ipanovia team is at your disposal.
Ipanovia, your International Development
Emmanuel Facovi – Managing Partner