PRODUCT-­‐MARKET

 FIT  
FEDERICO  C.  GONZALEZ    
President/CEO  -­‐  PESO,  Inc.  
Lecturer  and  Columnist  
Technopreneurship  and  InnovaHon  
 THEORY  
1.  Wide  divergence  of  success  in  startups  
2.  Wide  divergence  of  quality  and  calibre  for  3  
core  elements:    
–  Team  –  CEO,  sr  staff,  engineers      
–  Product  –  impressive  to  user,  ease  of  use,  fast,  
extensible,  features,  bugs    
–  Market  –  size,  growth  rate  of  users  
 IF  YOU  ASK  …  
1.  Entreps,  VCs  –  the  team  
2.  Engineers  –  the  product  
3.  Writer*  –  the  market:    
–  unfulfilled  market  get  fulfilled  by  first  viable  
product  that  comes  along  (workable,  not  great)  
–  terrible  market  does  not  care  for  best  product  or  
killer  team  

*Marc  Andreesen;  Pmarca  Guide  

 Rachleff’s  Law  of  Startup  Success  
•  #1  company-­‐killer  is  lack  of  market  
–  Great  team  +  lousy  market  >  market  wins  
–  Lousy  team  +  great  market  >  market  wins  
–  Great  team  +  great  market  >  something  special  
–  Neither  stellar  team  nor  fantasHc  product  will  
redeem  a  bad  market  
•  What  will  a  great  team  get  you?  
–  Ok  to  great  product  
–  Markets  that  don’t  exist  don’t  care  for  smart  team    
•  Can  great  products  create  huge  new  markets?  
–  Yes,  in  best  case  scenario  
–  Infrequent,  but  don’t  count  on  it  
•  What  to  do  –  get  to  product-­‐market  fit    
•  Startups  fail  because  they  can  never  get  to  
product  -­‐market  fit,  and  use  up  their  funds  before  
they  get  there    
 THE  PROCESS  
1.  Start  broadly  
2.  Define  problem  in  words  of  the  customer  
(arHculated  or  non-­‐arHculated  need;  iPod?)  
3.  Go  deeper  in  problem  def,  narrow  the  segment  
4.  Test  the  hypothesis;  talk  to  customers,  resellers,  
gurus,  influencers,  etc.  
5.  Narrow  segments  –  psychographics,  ajributes  
6.  More  info  from  market  segments  
 Survey  for  Product-­‐Market  Fit  
1.  How  did  you  discover  the  product?  
2.  How  would  you  feel  if  you  could  no  longer  use  
the  product?  
3.  What  would  you  use  as  an  alternaHve?  
4.  What  is  the  primary  benefit  received  from  it?  
5.  Have  you  recommended  the  product  to  anyone?  
6.  What  type  of  person  would  benefit  from  the  
product?  
7.  How  can  we  improve  the  product  to  bejer  meet  
your  needs?  
8.  Can  we  follow  up  by  email?  (create  
evangelists)  
9.  (Get  qualitaHve  feedback  in  BPMF  stage)  
10. How  disappointed  would  you  be  if  you  could  
not  use  the  product  anymore?  
END