…. And what comes next?
Product-Market Fit
How to achieve it….
1

The Challenge!
“The number one problem
I’ve seen for start-ups, is they
don’t actually have
product/market fit, when they
think they do.”
Alex Schultz
Facebook Growth Marketing
2

Nick Coster
Co-founder and
Head of Training
@nickcoster | Nick@brainmates.com.au
www.Brainmates.com.au

About Brainmates
• We teach and consult in Product Management.
• We developed a Product Management
Framework to help us and our clients
• deliver products to market faster and
• manage in-life products with greater success.
• We’ve trained over 3000 product professionals
in Australia, New Zealand and Singapore.
Ideate
Explore
Focus
ImmerseDefine
Build
Prepare
Launch
Product Strategy
and
Lifecycle
Management

Australia’s only dedicated Conference for
Product Managers.
Sydney – 23rd October
Melbourne – 18th October
LeadingTheProduct.com

What is
Product Market Fit?
6

What is Product Market Fit?
Product/market fit means
being in a good market with
a product that can satisfy
that market.
-- Marc Andreessen
8

What is Product Market Fit?
Product Market Fit means that a sizable
group of people have found enough
value in your product to exchange
something for it.
--Nick Coster - Co-Founder, Brainmates
9

Product Market Fit
10
Development
Introduction
Growth
Maturity
Decline
ValueMetric
Time
Product
Market Fit
Achieving Product Market Fit is the inflection point from
“Introduction” to “Growth” in a Product’s Lifecycle
BEFORE
AFTER

11
For Product Market Fit
you need “Traction”

“Traction”
“Traction is a measure of a
products engagement with
it’s market.
Investors care about traction
over everything else.”
-Venture Hacks, “Pitching Hacks”
http://venturehacks.com/pitching
12

“Pirate Metrics” - AARRR
13
Acquisition
Activation
Retention
Revenue
Referral Growth Metric
Growth Metric
Growth Metric
Traction Metric
Traction Metric
BEFORE PMF
AFTER PMF
AFTER PMF
See https://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version for more details.

Traction Metrics = Value Metrics
14
Retention Revenue
Created Value > Captured Value*
• Actively using your product over an
extended period of time
• Changing their behaviour around your
product
• Exchanging something of value more than
once (eg. money, time, attention, effort,
social currency)
Captured Value > Cost to Deliver Value*
• You are getting paid
• You have a business model that is working.
*Ash Maurya, Scaling Lean (2016) p25

Getting to
Product Market Fit

Before Product Market Fit
Optimise for fast
learning,
and pivot if required to
new markets, problems
or solutions.
16

How do you get Product Market Fit?
“Make things that
people want.”
-Paul Graham, Y-
Combinator
17

Product Market Fit = 2 parts
The Product
The part
you control.
The Market
The part you
don’t control.
18
Start
Experimenting
Here

Before Product Market Fit
Experiment …. Fail & Learn
Experiment …. Fail & Learn
Experiment …. Fail & Learn
Experiment …. Succeed & Learn
Repeat as required.
19

To create Customer Value, solve a problem.
Find a sizable market that
has a problem worth
solving.
Find out if they would
exchange value to have it
solved.
20
Ideate
Explore
Focus
ImmerseDefine
Build
Prepare
Launch
Product Strategy
and
Lifecycle
Management
Described in more details in the Essentials of Product Management Course
https://brainmates.com.au/training

Other Reading…
21
Customer Discovery Learn / Build / Measure loop
MVP
Lean Canvas

Understanding
The 2 Market Trap
22

Start understanding your market
What is the total
Addressable Market?
23

Start understanding your market
What % of that market do
you think you can
capture.
24

Start understanding your market
As a Start Up
You are here …
25
100%
0%
TimeNow

Start understanding your market
Except it is never a
straight line…
So you are probably here.
26
100%
0%
TimeNow
S-Curve

Start understanding your market
The Customer
Adoption Curve
27
100%
0%
TimeNow
Laggards
Late Majority
Early Majority
Early Adopters
Innovators
Product
Market Fit

Customer Adoption Curve
28Aka “Technology Adoption Lifecycle”. Geoffery A. More – Crossing the Chasm
Product
Market Fit

You have to “Cross the Chasm”
29Aka “Technology Adoption Lifecycle”. Geoffery A. More – Crossing the Chasm
Product
Market Fit
CHASM

There are really 2 markets here for start ups
30Aka “Technology Adoption Lifecycle”. Geoffery A. More – Crossing the Chasm
Product
Market Fit
CHASM

There are really 2 markets here
31
Product
Market Fit
CHASM
1) Early Adopter
2) Early Majority

Customer Types
Innovators
• Take Risk, often younger and can afford to fail.
These folk are crazy!
Early Adopters
• Careful risk takers,
They are the early Opinion Leaders.
Early Majority
• Considered actions,
Listen to the opinions of the Early Adopters.
32

Why is this relevant to getting
to Product Market Fit?
33Photo by Hans-Peter Gauster on Unsplash

You need to get Product Market twice!
34
Product
Market Fit #2
CHASM
1) Early Adopter
2) Early Majority
Product
Market Fit #1

Actions for Customer Types
Innovators
• Offer first MVP’s and get feedback.
Will soon lose interest and move to something else.
Early Adopters
• Optimise learning and iterate MVP’s to
establish Product Market Fit #1.
Early Majority
• Use success with Early Adopters to attract Early Majority.
Continue to iterate to gain Product Market Fit #2.
35

Keep Going!
36
Product
Market Fit #2
CHASM
Beware of a False
Product Market Fit (#1)
with Early Adopters.
Use it to get the Real
Product Market Fit (#2)
with the Early Majority.
Product
Market Fit #1

CASE STUDY – CHEFIN’
Chefin’ sold their first early
product to an Early Majority
audience.
“Feedback was horrible - we
had to refund, lost money, lost
a client”
- Petko Petkov - Founder
37
CHASM

CASE STUDY – CHEFIN’
Listened to this talk, then ….
“We repositioned the
Chefin product to the
Innovators and that is
what is fuelling our
growth today”.
38
CHASM

CASE STUDY – CHEFIN’
“We need the
innovators to actually
hit the early majority
later from a referral &
credibility perspective”
39
CHASM

Scaling beyond
Product Market Fit

After Product Market Fit
HANG ON!
Optimise for growth
and scale.
Don’t lose
Product Market Fit
to a competitor!
41

Product Market Fit
42
Development
Introduction
Growth
Maturity
Decline
ValueMetric
Time
Achieving Product Market Fit is the inflection point from
“Introduction” to “Growth” in a Product’s Lifecycle
BEFORE
AFTER
Product
Market Fit

“Pirate Metrics” - AARRR
43
Acquisition
Activation
Retention
Revenue
Referral Growth Metric
Growth Metric
Growth Metric
Traction Metric
Traction Metric
BEFORE PMF
AFTER PMF
AFTER PMF
See https://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version for more details.

Summary
Checklist for Product Market Fit
44

To Get to Product Market Fit
❑ Find a sizeable Market
❑ Identify a Problem worth solving
❑ Develop an MVP to solve it
❑ Find a business model to support it
❑ Test, Measure, Learn.
❑ Repeat!
45

Questions?

Nick Coster
Co-founder and
Head of Training
@nickcoster | Nick@brainmates.com.au
www.Brainmates.com.au
1800 272 466