⚒️ Build an MVP to find product market fit 📈
Updating my own mental model on a very well-known concept.
“I am coming home…get my room ready…this gaming thing just isn’t working”
Jason Citron, founder of Discord (sold for €12B 🤯)
When building products (side-projects or PM hustle) the only thing that matters is that people want your product. But it's damn hard, even Jason didn't believe in it any more at some point. Luckily he pulled through and achieved his vision.
I am currently building a much humbler thing called https://kitemap.io/. This cute side project aims to solve my own itch: Finding the best kitespot for my next trip. But although people generally like the idea, usage is lagging.
To understand why, I need to create a mental model of what Product Market Fit actually means. And to do that, I need to write a short article. Here we go! 👇
What does Product Market Fit really mean?
Great start: There's no clear definition of PMF 💩. But as what most things in life, you'll know it when you see it. Marc Andreeson's defintion of PMF is as follows:
The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can…
Similarly you will also know if you don't have it; Users will not stick around or not even try the product or feature, and you are running out of budget (either ⏱ or 💰)
How to find it (process)?
Run experiments In the early stages of product development you do not yet know what problem. Therefore PMF can emerge only from experiments. Through a series of build-measure-learn iterations, PMF is discovered and developed during a process rather than a big bang event.
Run them fast As no project or startup has infinite time or money to find PMF it's best to run these experiments as fast as you can [see speed over precision]
Test value first, growth later Andy Rachleff VC and one of the main thinkers on this subject puts it like this: “First you need to define and test your value hypothesis. And then only once proven do you move on to your growth hypothesis."
The value hypothesis defines the what, the who, and the how.
What are you going to build
Who is desperate for it
What is the business model you are going to use to deliver it?
Startups should therefore start with the product and try to find the market, as opposed to starting with the market to find the product.
Here's a great example of how discord iterated itself to PMF worth €12B.
Find the early tells You will not have money piling up in your checking account within a couple months. Throughout your series of experiments you need to find lead indicators that can predict the lag indicator that is PMF. Reid Hoffman uses a poker analogy for this: "Product/market fit requires you to figure out the earliest tells.” Unfortunately, PMF can not be reduced to a nice formula.
Some potential lead indicators might be:
Growth (downloads, views, etc)
Strong word of mouth (referal links, indicated in onboarding)
Product usage (users that come back daily must be getting some value)
Note: If these lead indicators do not indeed lead (hence "lead incator" 😉 ) to people spending money on your product, they are just vanity metrics.
How to run your company in the meantime?
Sam Altman (president of Y combinator) makes things very simple: “In general, hiring before you get product/market fit slows you down, and hiring after you get product market fit speeds you up. Until you get product/market fit, you want to a) live as long as possible and b) iterate as quickly as possible.”
What do you do after it?
Back to Marc Andreesen's definition of PMF. Once you have achieved PMF customers are pulling the product from you. Your job is to give it to them. This seems easier than it is, because once you start scaling, everything that was previously good enough will break. You will need to add more servers, you will need to add more support staff or automate all manual processes. And you need to do it while flying the plane ✈️
Congratulations! You have now proven your value hypothesis (for now, as nothing lasts forever).
Now you have captured and endured the first stage of growth you can move on to validate your growth hypothesis, the engine that drives your companies growth in a profitable way. You will spend more time on thinking about distribution than about improving your product. Don't worry, this shift will likely happen for naturally, as it's the logical thing to do.
Okay back to work! I think this is all the theory you need. Let's build, iterate fast and keep an eye on early tells. I will do so at Picnic and with kitemap.
For now I will focus on improving the underlying data of https://kitemap.io/, and on
improving the experience of finding new spots.
What are you going to work on? Let me know in the comments! 👇
As always, please share your feedback! I am very much a white belt at writing newsletters so it would be super helpful 🥋
More stuff you might enjoy
Stuff I enjoyed with a focussing on product metrics:
Andreesen Horrowitz launching their own media business, with 🔥 content from the one and only Lenny San https://future.a16z.com/north-star-metrics/
https://twitter.com/shreyas very informative tweet storm on product metrics:
https://twitter.com/levelsio illustrating why membership models are superior (also for the user, as his page views (= attention) is spend on more valuable stuff) )