Here is my definition of product-market fit:
"Identifying a good market (category, audience, niche) and then creating a product that the market wants to buy, at a cost that generates good margins, and at a frequency that produces scale."
"Identifying a good market (category, audience, niche) and then creating a product that the market wants to buy, at a cost that generates good margins, and at a frequency that produces scale."
Identify a good market (category, audience, industry, niche)
A "market" is really the sum of customer behavior in a category:
- Number of potential customers
- How much they spend
- The frequency at which they buy
- Their willingness to pay
- The forces that affect demand
A "market" is really the sum of customer behavior in a category:
- Number of potential customers
- How much they spend
- The frequency at which they buy
- Their willingness to pay
- The forces that affect demand
Identify a product that the market wants to buy:
It's not enough to find a category with potential (web analytics, campaign tracking, UI components), you have to build a product that customers are motivated to buy.
justinjackson.ca
It's not enough to find a category with potential (web analytics, campaign tracking, UI components), you have to build a product that customers are motivated to buy.
justinjackson.ca
Produce and distribute your product at a cost that generates good margins:
You might be in a great market with a strong product, but you don't have a business if you can't build, maintain, and promote that product profitably.
Distribution costs are particularly important.
You might be in a great market with a strong product, but you don't have a business if you can't build, maintain, and promote that product profitably.
Distribution costs are particularly important.
At a frequency that produces scale:
"The software business is all about volume." – @ianlandsman
Customer acquisition & retention needs to be repeatable at a scale that supports your desired outcome.
You’ll need a steady flow of new + existing customers.
"The software business is all about volume." – @ianlandsman
Customer acquisition & retention needs to be repeatable at a scale that supports your desired outcome.
You’ll need a steady flow of new + existing customers.
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