the product market fit cycle (updated to v. 2.0)
DESCRIPTION
This presentation was used for my talk at HowToWeb 2014 in Bucharest Romania and is the updated presentation to my blog post on the subject - http://thedrawingboard.me/2013/05/03/the-product-market-fit-cycle/TRANSCRIPT
The Product Market Fit Cycle
Carlos Eduardo Espinal (@cee)Partner | @seedcamp
Since 2007
Over 140+ Companies
Focusing on Product Market Fit
Pre-Seed & Seed Investments
It’s human nature to focus on what you are good at not on what you suck
atand…
Most Founders/Hackers love building productTherefore…
Founders Sometimes
· Get stuck optimizing a product’s features· Have metrics, but not deriving the right
conclusions· Failing to hit Product Market Fit before cash
runs out
Let’s pause that thought & define some concepts
What is Product / Market Fit?Poor conversions, no word of mouth, slow usage
growth, long sales cycle, and high churn
|
“Customers are buying the product as fast as you can make it, or usage is growing as fast as you
can add more servers.” - Marc. A.
Why do you want to create a company?
· What is your vision? · What are your values?
· What company culture do you want to instill?
Other than for making money…
· On what basis will you make decisions?· What will you be looking for in people you hire?· what will motivate you through the hard times?
This is NOT just a cheesy catchphrase!
Your customer
Identifying a Minimum Viable Segment
· Allows for better differentiation with out-group competing products
· Allows for easier referrals in-group· Allows for efficient capital use in reaching your
market
Case Study: The Amazon Kindle
Your Positioning“how you differentiate yourself in the
mind of your prospect.”
In a highly competed market > Differentiate!
Position well, or Re-position your competitors
Case Study: Commuting - Airline vs. Car
Southwest AirlinesThe short-haul, no frills, and low-
priced airline
Case Study: Cars - Quality vs. Experience
Mercedes Benz vs. BMWEngineered like no other car in the
world vs. The Ultimate driving machine
Your ProductAn MVP is more than just about the
code
What Job does your product do for your
customer?
How does your product reflect your values and your customer’s needs?
· Quality· Packaging · Messaging
· Customer Service
Product Focus Case Study: Customer Service
Zappos
Your Go-to-Market Strategy
A Go-2-Market Strategy Includes
· Pricing Strategies· Sales Strategies & Partnerships
· Distribution Channels· Communication Channels
Your Analytics & KPIs
Picking up where we left off…
What can sometimes be the problem?
It’s easy to miss one/all of these:1. Identifying a Minimum Viable Segment
2. Defining a clear positioning strategy + MVP that represents it
3. Testing of a complimentary go 2 market strategy
4. Tracking the right metrics to refine your value proposition
Define a “target” (MVS)Create a “bullet” to hit it
(positioning + product + go-2-market strategy)
The Product Market Fit Cycle
If (startup.status == product market fit) then startup.scale;
|
Else (inefficient_scaling);
Summary- Define your company’s core values &
hire accordingly- Identify a MVS + Define your ‘Bullet’ -
Positioning, MVP, & Go2Market
Summary- Test & Measure w/ Metrics
- Iterate on MVS or one variable within your Bullet
- Rinse & Repeat or Pivot until cash runs out
Thank you@cee
http://www.seedcamp.com