Finding and keeping product market fit is not an easy task, and companies that end up winning large markets often do it at lightning speed. In a large market, you have to move swiftly to prevent fast-following competitors from copying your product and winning, instead of you!
The big question is, how do I find and keep market fit at lightning speed in order to win?
At Jana, we grew at tremendous speed because we had great product fit in the incentivized advertising market in India. Here’s what I learned.
Make the loop between revenue and product development as short as possible
Things get tricky when you have a sales team and a large engineering team. The sales team has quarterly revenue targets, while the engineering team has too much on their plate in order to scale.
Making the development loop short is crucial for survival in a fast-growing company. A fast product iteration loop empowers you to learn from the market, and develop a product-market fit solution rapidly, outstripping your competitors. If you find out that your product has “lost fit,” for example a mean competitor has entered the race, a fast loop also enables you to realign your product quickly.
Loop efficiency is important, because it releases time to do higher-value activities and learn faster. There are lots of books on how to make the development loop efficient with automated tests, daily releases, small autonomous teams and documentation.
Focus on effectiveness, i.e. on the user story that has the highest value
Last week, I was advising a startup on how I prioritize stories. They told me they were prioritizing stories by effort first, and then by value.
I recommended: the single best way to make their development loop effective, is by focusing effort on figuring out what is the one thing they find most valuable for the market going forward.
Building the right product will win every time. You don’t need tons of features, you just need the right features. Using the the highest value items first creates domino effects over time.
First things first: Revisit the customer pain points and core value proposition periodically
Never assume you have the perfect solution for your customers. Revisiting your customer’s pain points and your core value proposition is crucial for your survival. This an important part of optimizing the development loop.
Periodically, observe your clients onsite and summarize where they struggle and how they currently accomplish their most important tasks. For example, I like videotaping my interactions and summarizing the videos with tools such as iMovie. Then, analyze further whether your product fulfils its mission. You can write your findings in an internal wiki and share it to the rest of the company.
Optimize figuring out what is of highest value while minimizing the risk of estimation error
The main problem you might face when looking for the highest-value story is the data you have may be sparse and noisy, making it likely that your estimation of what is of high value is wrong. For example, your customers may not tell you the full story, may be lying, or your customer contacts may not be the decision makers. You need to account for this.
Here’s the development loop that I recommend. This is just a guideline. You can skip steps if you feel you have enough data or if the step is not relevant. But make sure you understand why.
Be careful about what you skip. One company I was advising once told me, ”Because I talk to customers every day, I don’t need to show marketing one-pagers to my clients.” I suggested otherwise. Here’s why:
- Until the clients see the product, they may not realize what they’re asking for.
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Showing the same product to each client gives better data, which will help you iterate faster later.
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You create a relationship with your customers.
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You want to find out how much they are willing to pay for the product.
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You may not know how to sell the new features. Say the client is willing to pay 10 times the current price, should you create a new product bundle?
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You may find out that the people you are talking to are not the decision makers.
As I’m writing this, I’m realizing that this can become very complex. Stay tuned for my next blog posts! Also see my previous post, product is about market fit and not about individual customers.
Reach out to me on Twitter (@yvancastilloux) if you want to discuss product challenges you’re having!
Yvan Castilloux is an entrepreneur and former Director of Product at Jana. You can follow him on Twitter: @yvancastilloux.
Image courtesy of Unsplash.