The Product Market Fit Cycle (Updated to v. 2.0)
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Transcript of The Product Market Fit Cycle (Updated to v. 2.0)
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The Product Market Fit Cycle
Carlos Eduardo Espinal (@cee)Partner | @seedcamp
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Since 2007
Over 140+ Companies
Focusing on Product Market Fit
Pre-Seed & Seed Investments
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It’s human nature to focus on what you are good at not on what you suck
atand…
Most Founders/Hackers love building productTherefore…
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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
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Let’s pause that thought & define some concepts
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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.
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Why do you want to create a company?
· What is your vision? · What are your values?
· What company culture do you want to instill?
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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?
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This is NOT just a cheesy catchphrase!
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Your customer
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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
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Case Study: The Amazon Kindle
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Your Positioning“how you differentiate yourself in the
mind of your prospect.”
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In a highly competed market > Differentiate!
Position well, or Re-position your competitors
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Case Study: Commuting - Airline vs. Car
Southwest AirlinesThe short-haul, no frills, and low-
priced airline
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Case Study: Cars - Quality vs. Experience
Mercedes Benz vs. BMWEngineered like no other car in the
world vs. The Ultimate driving machine
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Your ProductAn MVP is more than just about the
code
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What Job does your product do for your
customer?
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How does your product reflect your values and your customer’s needs?
· Quality· Packaging · Messaging
· Customer Service
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Product Focus Case Study: Customer Service
Zappos
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Your Go-to-Market Strategy
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A Go-2-Market Strategy Includes
· Pricing Strategies· Sales Strategies & Partnerships
· Distribution Channels· Communication Channels
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Your Analytics & KPIs
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Picking up where we left off…
What can sometimes be the problem?
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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
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Define a “target” (MVS)Create a “bullet” to hit it
(positioning + product + go-2-market strategy)
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The Product Market Fit Cycle
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If (startup.status == product market fit) then startup.scale;
|
Else (inefficient_scaling);
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Summary- Define your company’s core values &
hire accordingly- Identify a MVS + Define your ‘Bullet’ -
Positioning, MVP, & Go2Market
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Summary- Test & Measure w/ Metrics
- Iterate on MVS or one variable within your Bullet
- Rinse & Repeat or Pivot until cash runs out
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Thank you@cee
http://www.seedcamp.com