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When it comes to growing a start-up, your biggest objective is always guaranteed to be making sure that you build a product that is ‘fit for the market’. This means not only building a viable solution to meet a user's need, it’s building a product that your customers use so passionately that they recommend it to their peers at scale.
Yes, market conditions aren’t static, and nor are user needs. Because of this, reaching product-market fit can feel like a bit of a nebulous journey.
But truth be told, reaching product-market fit doesn’t need to feel like rocket science. And the waypoints along your journey to product-market fit don’t need to change either.
In fact, with a clear-cut roadmap at your disposal and a dependable team that’s done their research, you can measure your journey to reaching product-market fit almost as if you were measuring the distance between Earth and the moon.
And although reaching product-market fit is by no means a linear process, our team at Mayfly Ventures have charted out the best course to help your own ideas take flight. Here’s our step-by-step guide for reaching product-market fit swiftly and sustainably. Strap in your seatbelts and prepare for countdown because this process will see you venturing through the stratosphere and beyond.
Before we lift off or get into the nitty gritty of reaching product-market fit, let’s start with a base level definition of PMF and the role that this term plays in the process of developing a product and bringing it to market. Simply put, product-market fit is an aligning of the stars. It’s the sweet spot where your customers don’t just use your product, but use it so passionately that they recommend it to their peers.But attaining product-market fit is about more than garnering word of mouth growth. It also marks a change in momentum. It’s where your enterprise finds its own gravitational pull.
WP Engine founder Jason Cohen put it best when he said: If every day it’s a struggle to get customers, it’s not working yet. If every day it’s a struggle to keep up with demand, it’s working.
If you’re able to develop your product to a point where you’re not fighting for growth, but fighting to accommodate more growth, then you’ll know you’ve reached product-market fit. To put some more tangible metrics behind this definition we can look to what Brian Balfour (Former VP of HubSpot and CEO of Reforge) calls the PMF Trifecta.
Non-trivial top line growth
Non-trivial top-line growth refers to a significant increase in the revenue recorded by a company over a defined reporting period. If your profits from one quarter are astronomical when compared to profits from a previous quarter, then you can definitely consider this to be ‘non-trivial’ or ‘significant’ growth.
Meaningful usage
As for ‘meaningful usage’, this typically presents itself as your users not only revisiting your product on a regular basis, but completing dynamic actions that demonstrate the value of your product in real-time. Social media apps can define their ‘meaningful usage’ in a few ways, like the number of posts that are made or shared on their platform every day.
A flat retention curve
This is best explained by outlining how many of your users are actively taking advantage of your product. In other words, it’s the difference between Instagram followers and your Instagram engagement. Yes, having 20k people downloading your app is a massive feat, but if you’re only recording 2k users a day, it could point to a problem. There has to be some reason why only 10% of your users are actively using your app as the solution you’ve designed it to be.
Of course, the shift in gravity doesn’t happen overnight. Here are our 5 levels of atmosphere and heavy terrain you will have to pass to attain product-market fit:
Now that we’ve established our foundational understanding of PMF and its core components, it’s finally time to start building a rocketship that may fly (see what we did there?). But if you want your groundbreaking idea to be able to break through all the levels of Earth’s atmosphere and out into the final frontier that is product-market fit, it’s going to be a bumpy ride.
So let’s spacesuit up, shall we?
The first thing you’ll need to do is identify your ‘gap in the market’. But don’t approach this like a marketer, per se. Instead, approach it like a human being with a problem. After all, you’re building a solution for human users.
At the end of the day, every billion dollar idea starts by solving a problem. It’s our job as innovators to find those significant problems and think critically about how best they can be solved.And when we use the phrase ‘significant problems’, we’re referring to a problem that you’ve ideally experienced yourself, and have tried to solve yourself in the past. The reason why it’s always best to look for known problems (i.e. problems you’ve experienced yourself), is simply because logic dictates that if you’ve had this problem, then chances are a lot of other people like you have had a run in with it too.
It’s also a lot easier to design for yourself than it is to design for some faceless, intangible ‘user’. That, and you’re also better positioned to design solutions for problems that you’re more than familiar with.
Here are some other top tips to follow when seeking to find your problem:
it’s not worth reinventing the wheel, especially if you’re planning to build a rocketship. Do they even have wheels? Anyway, if your known problem already has solutions that have been well-received and well-researched, then your problem-solving skills will likely be more useful elsewhere. After all, it’s easier to maintain a blue ocean strategy than try to enter a more densely populated market.
When in doubt, it’s always best to find a pain point that you’d love to solve over one that you could solve. That extra sense of passion and purpose is usually what you need to see a viable solution go from utilitarian to utopian. And making your users happy is the key to accelerating your own journey towards attaining product-market fit.
Much like writing elevator pitches, you want to make sure that the problem you’re setting out to solve is as obvious as possible to describe, both to other people who’ve experienced that problem as well as people who may not have experienced it at all. A great example here is pulling a laptop out of your carry-on baggage when checking in at the airport. Everyone hates that, so there’s guaranteed to be a way to make it easier. Another example? You want to add some hanging pot plants to your rental property but you can’t drill holes into the ceiling.It’s also worth mentioning that specific problems are more likely to have specific users too. Think about the two examples provided above. What can you learn about the users behind those problems just based on the description of the problem alone?
Just because your user has gotten accustomed to dealing with a problem one way, it doesn’t mean that’s the best approach to take moving forward. Your job as an innovator isn’t to improve on what’s already there, but to imagine a future that could be. So don’t be afraid to ask the big questions and to think outside of the box all throughout this journey.
When Slack launched in 2013, they were entering a crowded field of major players of group messaging platforms, Slack’s has managed to carve out a strong UVP by focusing on creating a UX which simplifies having many conversations across many topics across a number of people in an organisation.
Founder Stewart Butterfield designed the Slack platform to be simpler than juggling private Facebook or Skype chats and easier than sifting through convoluted email threads.
Instantly, Slack developers recognised the app’s convenience to be one of its major value points. From here, they outlined what other potential benefits they could feasibly deliver to their corporate users and the unique needs that accompany maintaining channels for internal communications.
With Slack’s valuation now surpassing $1 billion, it’s evident that Butterfield and his team were able to maintain a solid understanding of their product’s benefits, and also aptly communicate those benefits to their users.
Once you’ve got your problem fully outlined and have a strong understanding of your target user and their own needs, it’s time to confirm that your problem actually exists.
This means asking other potential users if they have experienced that problem as well. At Mayfly Ventures, our version of "would you like to sign up for our rewards program?" (i.e. the question we find ourselves asking our partners most frequently) is
The process of attaining product-market-fit typically requires you to work with your target user quite intimately. Every step along the way of this monolithic journey will have you touching base with your user. So find a demographic and a psychographic that you actually like interacting with, and can communicate with easily. That is hands down the best way to ensure you can take full advantage of your user feedback.
Granted, it can be a little awkward to approach people with the sole intention of asking them if they have a problem. Especially when you’re not even going to present them with a solution at the end of that discussion. What do they get out of that exchange?
But more importantly, how do you even find these kind souls that are happy to talk to you just for the joys of conversation? Well, a little resourceful thinking can go a long way here.
To get you started though, here are our team’s top suggestions for finding more people to validate your known problem with:
Never underestimate the power of your social circles. You’d be surprised by just how many insights and brainstorming opportunities you can get by just speaking with your friends, family and colleagues alone. Get out there and talk about what you’re trying to do. Trust us, it’ll help bring your ideas to life in a variety of ways.
For quantitative data to be truly useful, you will likely need over 50 respondents to a poll. But don’t worry you don’t need to be flagging people down on your local high street. Pollfish is a tool in which you can write a poll, select the demographics of people who you want to answer (your ICP) and you can pay a surprisingly small amount to have hundreds of people answer your poll.
Sometimes your family and friends will just tell you what you want to hear and one way to test if the public will really put their money where their mouth is, is to make ads which advertise your soon to be made product. See what the click through rate is. This is also a great way to AB test different value propositions. Put the same budget behind two ads and let’s see which one has the most clicks. If you have the resources, you can even create a simple landing page, which website visitors from the ad can sign up to your mailing list to keep up to date on your journey.
Got a Twitter account? A Discord forum? A GitHub blog? Access to any other platform where you can expect your users to be congregating and perhaps even venting about your shared user problem? Then don’t just get involved in those conversations – start creating and facilitating them.
Here are some other tips we’d like to share on making sure your feedback forms, surveys, and general discussions are as focused and impactful for your preliminary research and market validation as possible:
Know what questions you want to ask and what types of answers you’re looking for before you even start putting your Google Forms together. That way, you can make sure that all your surveys are poised to deliver actionable insights that help guide the preliminary development of your viable solution.
if your messages have a personal touch, you’re more likely to get a personable response. And people can always tell if an automated message comes into their inbox. Digital communications are already diluted with that trash enough as it is. Don’t make your presence ‘direct to spam’ material from the get-go.
Not everybody responds to your messages, and that’s okay. Similarly, some people may let the discussion end before you’ve received the insights you’re looking for. In these cases, it’s better to focus your attention elsewhere.
On that same note, don’t leave anybody on ‘read’ or in a position where they’re waiting for your response. Your best asset as an entrepreneur is the ability to stay speedy. Besides, there’s no fun in being AFK, especially when you have the opportunity to forge meaningful connections with your users. Besides, staying prompt will also help you move from Stage #2 to Stage #3 even quicker. And responding to a user problem quickly can increase your chances of cornering that market niche.
Besides, staying prompt will also help you move from Stage #2 to Stage #3 even quicker. And responding to a user problem quickly can increase your chances of cornering that market niche.
Having discussions with other people that you can expect will utilise your solution is always going to be the first step you take in the process of market validation. Confirming that your problem exists and that the frustrations you feel as a user can be replicated makes it very clear that you have purpose-driven work to do.
And the users you validate your problem with are still getting their own value from their communications with you, that much must be said. At this stage on your journey to reaching product-market fit, you can actually offer the potential users you communicate with so much more than just wispy promises for a brighter tomorrow. You can ensure that they feel seen and heard. In other words, you can validate their own grievances alongside validating your known problem.
These discussions will also help you finetune your Ideal Customer Profile (or ‘ICP’). Every new insight you can gather can help paint a more distinct picture of what your user would need from a viable solution to their problem. So speak with your customers! Because the better you know them, the more confident you can be in your solution.
With your ICP on hand and your UVP validated, chances are you’ve already got some strong ideas about what features and functions your MVP will need. For those of you who’ve dabbled in product development (or at least development theory) before, you’ll know that ‘MVP’ stands for Minimum Viable Product. This is the first version of your product which is hopefully good enough to attract some early adopters.
How do you know when you’ve reached your MVP let alone PMF? Well, the answer here lies in understanding your product features and whether they’ve been developed to a standard where they could feasibly address the needs of your users (i.e. your known problem or problems).
So welcome to the mesosphere: the portion of your journey where the boosters of your rocket should start to fall away, leaving just the streamlined features that help deliver on your UVP and propel your product ever closer to PMF! A fair warning before we climb through the mesosphere even further – the terrain here is rocky, with lots of asteroids and black holes where a lot of founders get lost. But hold on tight as we help you navigate this treacherous territory.
Unsurprisingly, the number 1 black hole we see founders get sucked into here is actually all about features. We’re talking about founders spending too much time and money building a product filled with bells and whistles their customers don’t want.
In November 2021, QR code ordering platform Mr Yum raised a AU$89M Series A, the largest Australian Series A for a female-led Australian company. But what if I told you, the Mr Yum MVP was built at no cost, in 2 weeks?
Mr Yum was trying to solve the problem that people want to see what their food looks like before they place an order. At the time, the best way to do this was to try to match restaurant Instagram posts with menu items. Quite the tedious process!
The Mr Yum crew could have spent millions of dollars building a custom-built app which could do this exquisitely. But all they did was go to some of the local cafes around their Collingwood office and simply ask to take photos of all their menu items. From here, they loaded all the photos into an AirTable (essentially an Excel spreadsheet in the cloud) alongside the respective title of each dish. Then they used a free QR code generator to put some QR codes on tables which, once scanned, directed the user to the AirTable where they could see the menu in photo form. With this streamlined approach to building to meet their UVP, Mr Yum broke through the mesosphere in record time.
This doesn’t mean your MVP should be as simple as an AirTable and a free QR code, but it does demonstrate that you don’t need 2,000 features on version 1 of your product in order to reach PMF. And you also don’t need to be a design perfectionist.
So, how basic should my MVP be? Asking these questions can help.
If your development budget is on the modest end, you’ll naturally want to conserve your resources so you’ll have capital available for your GTM strategy (more on this later). So for founders operating with a minimal budget, it’s best to launch as soon as possible and test the commercial viability of your product right away.
Lower budget = Simpler MVP
If you have 4 kids at home, and are struggling to pay your bills, it may not be the best idea to remortgage your house to build a half a million dollar MVP. Ok, this is an extreme example, but you get the point.
Lower risk appetite = Simpler MVP
If you are a UI/UX designer or a developer, the Mesosphere is your playground. While your founder counterpart may not be able to afford $30K on app designs, you can do it yourself. This can allow you to flex up your MVP without it breaking the bank. But be careful, it’s still easy to overkill your MVP’s feature set.
No skills in design or development = Simpler MVP
How many prospective users did you speak to when defining your known problem? Did they say they would adopt your solution? Did they say how much they would pay for it? Do you have a waitlist of customers waiting to use your product?
If you can’t answer all of these questions with as much confidence as you’d like, then there’s a chance that the idea behind your product may not be as validated as it could be. So do you fall back to the stratosphere? Well, no. You can press forward by simply opting to launch your MVP earlier and then defining what shape your solution should take from there.
Less validated idea = Simpler MVP
Speaking of your ICPs, it’s important to consider how your users may react if your presented solution is simpler than they were expecting. For independent or individual users, a basic MVP can be enough for them to determine whether your solution meets their outlined user needs. For other users that may have higher standards (like larger organisations or enterprises), being presented with a simpler MVP could make for a bad first impression.
If your customers are eagerly anticipating a practical solution, you should launch as soon as you have an MVP that delivers on your UVP. It’s all about acting in accordance with your user’s priorities.
Lower expectation ICPs (not enterprise) = Simpler MVP
Going back to your risk appetite one more time, a lot of founders must naturally make decisions purely based on the actions of their competitors. If Uber Eats releases a new user-friendly feature, DoorDash will have to follow suit to stay ahead of the curve. So it pays to know not only what your competitors are doing, but where they are – as soon as they pop up.
If you have fewer competitors, then you’ll want to capitalise on the fact that if you act fast, your product could become the definitive solution to your known problem. So launch with a simpler MVP and dominate the conversation before any of your competitors even have a chance to put pen to paper.
Not many competitors = Simpler MVP
• Cheaper
• Quicker to build
• Faster iterations
• Harder to get traction
• Hard to scale
• Generally lots of manual process
One of the most potent tools that you can utilise in the race to developing your MVP is no-code or low-code app development platforms like Figma. As their name suggests, these no-code tools allow product developers to fasttrack the creation of their MVPs. But no-code and low-code tools aren’t just utilised for app development.
You can even use no-code apps to build websites. Website builders like Shopify, Wix, Squarespace, and literally any other site builders that allow webmasters to click and drag website elements also fall under the umbrella of no-code tools. These site builders have made eCommerce increasingly accessible for entrepreneurial minds that may not possess a knack for coding.
1991: First websites
2003: Wordpress
Today: Majority of websites are No code. (Shopify, Wix, Squarespace). Build a website in a day.
1997: First App (Snake on a Nokia phone)
2012: Bubble.io Launched
Today: Bubble.io is becoming a lot more popular but it still is a small percentage of the app landscape.
In 1991, the first websites were launched. In 2012, Wordpress came out making website development more cost effective and time efficient and today the majority of websites are no code. Now, the no code revolution is slowly taking over the app development space which means you can have apps which look and feel like native applications but get there in a fraction of the time and cost.
Simply put, with the emergence of no-code platforms in app and website development, you too can go to market at rocket speed.
Exercise: Define what the simplest version of your MVP could be which still delivers on your UVP. What is your Airtable and QR code tech stack? Then decide how much you want to scale up your MVP based on the above questions. Then leverage no code and other third party tools to get to launch and go to market.
All the days and nights in the lab or glued to the drawing board have finally paid off: you’re ready to launch. But how do you launch and when you are up in the air now – do you just sit back and enjoy the view?
Yes, the thermosphere is all about gathering your bearings after the long development sessions that accompany building up your MVP and developing your solution further. But the work isn’t over yet, and you’re still a whole atmospheric layer away from breaking through the PMF.Once you’ve been able to create an evolution of your MVP that both fulfils your user’s needs and delivers on your UVP, it’s finally time to take it to the market and share it with the wider world. This requires focused messages attached to a tailored marketing campaign – or in a nutshell, your go-to-market (or ‘GTM’) strategy.
The best process to follow here is actually quite simple, and could be considered a microcosm of your journey to PMF thus far. Just as you’ll be travelling through five distinct stages on your journey to reaching PMF, so too will you be progressing through a few key steps in the formation and finetuning of your go-to-market strategy.
Here’s what you need to consider when developing a killer GTM strategy:
1. Develop your message
2. Map out your buyer’s journey
3. Select your ideal marketing channels
4. Finetune your sales plan
Let’s start with developing your message. If you’ve been receiving great feedback from your current users, then you should have a strong understanding of the benefits that accompany using your product. This is your product value, as interpreted by your users.
You should also know what prompted them to consider using your solution in the first place (i.e. what problems were your users so ardent in resolving for themselves?). These are your user pain points.
Think about the many pain points of booking a taxi 10 years ago. On hold for 10 minutes, unsure if the cab would actually show up. Uber captured its UVP in a simple message: ‘Tap the app. Get a Ride’.
So we spoke briefly about your sales funnel when finetuning your messaging. Now is the time to start mapping out your ideal buyer’s journey in full, starting from the very top of the funnel (i.e. first engaging with your campaign messaging) to the bottom of the funnel, or where customers ideally convert and buy your product.
Here are the three sections of the buyer’s journey that you should be developing as the structure for your GTM strategy:
Top of funnel – customers are problem aware or becoming problem aware. Your messaging should focus on how your solution can fix their problem.Middle of funnel – customers compare your solution to other available options. Here you can go deeper into how you can solve their problems, explore other key benefits they can receive by using your product. Start introducing deals and explain ease of use. Bottom of funnel – customers are seeking commercial information to help them decide whether they will purchase your product. At the bottom of your sales funnel, you can expect customers to be looking up prices, packages, and special offers to denote that they are almost ready to convert.
Once you know what pathway you’d ideally like your buyers to follow in cultivating their own relationship with your product, it’s time to really start getting into the nitty gritty of marketing strategy and identifying which marketing channels will make the best setting for your messages and customer interactions.
Thankfully, picking your marketing channels should be simple enough if you’ve been able to fully flesh out your buyer personas. If you know where your buyers are likely to do their research, for instance, you can make sure that your marketing materials are right where they’ll be able to see them.
Are your buyers likely to do their research in the form of watching YouTube videos? Then make your own informative videos or even video tutorials. Will your buyers look to influencers for guidance? Then strike up some partnerships to get your product showcased on Instagram. Take out Facebook ads, YouTube ads, or whatever other channels that you could expect your buyers to be paying attention to.
It’s also important to note that a multi-channel approach is just logically going to be a lot stronger than using just one platform. Not only will you boost your enterprise’s web visibility substantially and create an interconnecting network of digital materials, but you can also monitor the efficiency of messages from platform to platform. This can, in turn, help you gain a deeper understanding of your different buyer personas. And the more you know about your users, the better you’ll be able to market to them.
With your messaging, marketing channels, and your sales funnel all mapped out, the final step is to finetune your sales strategy so that it’s prepped for success.
One particular element of your ICP that you’ll want to finalise as soon as possible is what your user is happy and able to pay to use your product.
Here are 3 steps to follow when finetuning your pricing model:
Step 1 – create an internal pricing model based on what you think your user’s are willing to pay for your product.
Step 2 – monitor customer engagement based on your internal pricing model. Reassess your original pricing model here to ensure that your product is ready for large-scale commercial use. This means thinking about the additional costs associated with maintaining your product for a growing number of users and ensuring that your pricing model is designed to cater to those projected operational costs. Test this revised pricing model.
Step 3 – if the revised pricing model has been deemed sustainable and aligns with your ICP, then now is the time to share that pricing model publicly. Showcase your pricing model as a key component of your product’s go-to-market strategy.
GTM is all about trying different things, getting data back and refining your strategy. You’re not going to get it all right on the first go, in fact you are going to get most things wrong. But that’s ok, use it all as learning experiences. Refine, refine, refine.
You’ve got a product, and through an effective launch campaign you have your first early adopters. Amazing! But are your users coming back? Is your product being used as intended? What are their sticking points?
Once you reach the exosphere, you’ll feel the air start to thin around you. You’ll start to feel the urge to become more reactive rather than proactive. That’s because monitoring how users interact with your product becomes a top priority. This means determining how many of your users are ‘active’ and delving deeper to find out what’s stopping your passive users from further engaging with your solution or integrating it as a fixture of their personal or professional routines.
Your best foot forward here is to set up analytics tools and feedback channels to track your product’s most valuable performance metrics. This includes metrics like your customer retention rate, average user session times, most common user activities, and other operational KPIs.
Quantitative Feedback: Use tools like Google Analytics and Hotjar to measure: Daily Active Users, Average Session Times, what functionality and pages your users are using the most.
Qualitative Feedback: Ask your users for feedback through the app or in email nurturing campaigns. This is where you can get a deeper understanding of why your users are using the product how they are.
Many investors are not quantifying runway in terms of time any more. Alternatively they are looking at how many product iteration cycles do we have? Use tools like PostHog to collate user feedback to prioritise feature updates as your venture toward PMF.
One of the best things about no code app development is it is a lot more scalable and easier to iterate on than a super basic MVP (airtable) but so much faster to iterate than traditional development.
“The law of compound growth being what it is: if you can get 2% better every iteration cycle, your iteration cycle is every four hours rather than every four weeks, and you compound that over the course of a few years, you’ll be in a very very different place. Make it one of your top goals to build one of the fastest iterating companies the world has ever seen.”
- Open AI cofounder Sam Altman.
The faster you can get user feedback and iterate your product the faster you can make it to the elusive PMF.
Have you finally reached a point where you’re struggling to keep up with demand? Then you’ll know you’ve made it to PMF. Take a moment to enjoy the shooting stars and fantastical nebulas that paint the skies up here. It certainly does feel like a completely different plane of existence – but it’s not home.
It’s important to keep in mind that PMF isn’t really a destination. Your business isn’t forever changed after reaching PMF, and nor are you as a founder. In fact, it’s entirely possible to lose PMF even after you’ve reached it. So where do you go now that you’re here?
There’s a reason we called this guide/itinerary ‘a journey to the stars and back’. We weren’t just trying to emulate Bilbo Baggins in a spacesuit. The simple truth is that PMF is an iterative process, aligning with the cyclical nature of a build-measure-learn approach.
Once you develop your product and launch it with great success, it will need to evolve, both to cater to your user’s own evolving needs and to maintain your traction in the market over your competitors. Travelling through all the phases of PMF when looking to improve on or update your solution, will help ensure that your ongoing development efforts stay well-informed and well-connected to your users back on Earth.
PMF isn’t just your ticket to peak commercial viability – it’s also your key to staying on top, namely by improving your product to make sure that it continues to be a dynamic solution for your users. So don’t be afraid to go back to Ground Control. Do what you do best as an innovator and keep on reaching for the stars. In doing so, you can make sure that your rockets continue to be built on solid ground. And is there any better way?