Will the Cat Eat the Cat Food? Product-Market Fit.
I’m often asked what I regard as the key factor behind the success or failure of a new venture. No doubt, many factors are key, so pointing to one may be seen as rather simplistic. But, if you don’t get product-market fit right, there will be no sustainable venture. Will the cat eat the cat food? This is the ultimate test.
Defining and testing your value proposition among a carefully segmented customer base is the most critical step in marketing. Which are your the target markets? How are they segmented? What is the value proposition for each key segment? And rather than tackle them all at once, pick one and see if you can explore ways to make your product or service indispensable to that. Talk to prospective customers. How disappointed would they be if your product was not available? Is it just a “me too” product (a "nice to have") or does it solve a problem that nobody else is able to solve in the same way or to the same degree (a "must have")?
Rather than an “aha” moment, the process of establishing product-market fit, is one of discovery and iteration. Lot’s of experimentation and pivoting, based on real customer feedback.
If you assume there is product-market fit, when in fact there isn’t, you can make the mistake of trying to scale before the venture is ready. Hiring more staff to develop something which does not resonate sufficiently with customers will lead you nowhere. You are basically just burning cash. Most of your hiring needs to happen after you’ve established product-market fit, not before.