How to build a product that people want - Product Market Fit Methodology

Faster Track to

Product Market Fit

FEB 13, 2016

BY JEFF SAFOVICH

All Rights Reserved 2017 [email protected] www.Navigabiz.com

Era of daily breakthroughs

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Smart Transportation

Virus-sized computing devices

Quantum computers


What is Product Market Fit (PMF)?

“Product/market fit means being in a good market

with a product that can satisfy that market.”

Marc Andreessen

“Product/market fit is a precondition for effectively

scaling marketing for a company”

Sean Ellis

“Product/market fit is a step in between customer

validation and customer creation”

Steve Blank


Why PMF Methodology?

Fail fast: Failure is a cousin of creativity

Scientifically measure if there is progress over time

Be frank with yourself: know where you are to choose your next step

Identify “the most promising” concept; Verify a concept potential

Avoid waste: greatest waste is doing efficiently what should not be done at all Peter Drucker

Identify the most important improvement to focus on

Prioritize product features

Speed up business evolution: most startups do not fail, they just run out of money


PMF Methodology - Intro

• What trick am I about to show off?Trick

• What response do I want?Valuation

• Try this with different peopleExperiment

• Watch results, improve, retryLearning

• If the trick is not working, try another oneValidation


5 Steps to Product Market Fit

Concept

Metrics

ExperimentLearn

Validate



Describe Your concept:

◦ Need

◦ Solution - Value

◦ Solution - Growth

◦ Solution - Monetization

Concept

Metrics

ExperimentLearn

Validate



Assessments◦ What do you need to know to predict

success?

KPIs◦ Translate Assessments into KPIs

(*) KPI = Key Performance Indicator

Concept

Metrics

ExperimentLearn

Validate



MVP ◦ Build a MVP to measure your KPI

Measure◦ Run an experiment and measure your

KPI

(*) MVP = Minimal Viable Product

Concept

Metrics

ExperimentLearn

Validate



KPI vs. Goals◦ See what works, and what doesn’t

Compass◦ Focus improvements on highest risks

Concept

Metrics

ExperimentLearn

Validate



Progress◦ Analyze KPIs over time

Convergence / Pivot◦ Are you on track? Be frank with yourself

Concept

Metrics

ExperimentLearn

Validate


Let's take a closer look


Making people want your stuff Making stuff people wantVs.


Solution

STEP 1 - Concept

• What’s the need? Who needs it? Painfulness? Context?Need

• What value will your clients gain?Value

• Distribution method: viral? sticky? paid?Growth

• How will you monetize?Model

• Promise, Players, Use cases, Funnels


STEP 2 - Actionable Success Metrics

Solution

Need

Value

Growth

Model

Assessments

KPIs


STEP 2 (cont)- Actionable Success Metrics

Solution

Need

Value

Growth

Model

Do they need your solution?

For example:

• Assessment:

• KPI:

(*) CTR = Click Through Rate

Do private users want to sort out the mess in their contacts?

% CTR on invitation emails


Solution

Need

Value

Growth

Model

Do they appreciate the value you provide?

For example:

• Assessment:

• KPI:

Do users see value in your smart contacts management system?

# Returns per user



Solution

Need

Value

Growth

Model

Is your growth method working?

For example (assuming viral method):

• Assessment:

• KPI:

Are users inviting their friends to try out your product?

# Invitation sent per user



Solution

Need

Value

Growth

Model

Is your monetization effective?

For example:

• Assessment:

• KPI:

Are free users upgrading to a paid version?

% of free users -> paying



STEP 3 - Experiment

MVP

Measure

Try

• Minimal possible scope to measure KPI

• Embed measurements into MVP

• Run your experiment


STEP 4 - Learn

Analyze

Compass

Progress / t

• Current KPI compared to your holy grail

• Focus improvements on highest gaps

• Did you improve?


STEP 5 - ValidateGoal

Goal

Are the KPI converging?

A

B



Concept

Metrics

ExperimentLearn

Validate

• Need, Solution (Value, Growth, Model)___

• Need, Value, Growth, Model___

• MVP, Try, Measure__Analysis, Progress / t, Compass

KPI Converging?

Repeat


More to explore

BooksLean startup, by Eric Ries

Toyota Production System: Beyond Large-Scale Production, by Taiichi Ohno (Kaizen)

Lean Thinking: Banish Waste and Create Wealth in Your Corporation, by James P. Womack and Daniel T. Jones

Crossing the Chasm, by Geoffrey A. Moore

The four steps to the Epiphany, by Steve Blank

Linkshttps://en.wikipedia.org/wiki/Product/market_fit

http://www.startup-marketing.com/the-startup-pyramid/

http://blog.pmarca.com/2010/03/20/the-revenge-of-the-fat-guy/

http://theleanstartup.com/

http://paulgraham.com/startupmistakes.html

TechniquesAgile / SCRUM

Rapid prototyping

Continuous deployment

A/B Testing

The 5 Why

https://en.wikipedia.org/wiki/Product/market_fit

http://www.startup-marketing.com/the-startup-pyramid/

http://blog.pmarca.com/2010/03/20/the-revenge-of-the-fat-guy/

http://theleanstartup.com/

http://paulgraham.com/startupmistakes.html


Points to remember

Failure is a cousin of creativity. Fail fast!

Making stuff people want vs. Making people want your stuff

Greatest waste is to do efficiently what should not be done at all.

Follow the trail wherever it leads… Most successful startups end up doing something different than they originally intended

Enjoy along the way!

Paul Graham

Peter F. Drucker


Thank you for attention!

If you are wondering how to apply this to your own company,

Or if you would like to discuss an interesting idea,

I’ll be happy to meet for a coffee.

Jeff Safovich

[email protected]

www.Navigabiz.com

mailto:[email protected]


Special Thanks!

A big thanks to everyone who attended this event!

It was a great pleasure to meet you. We hope you had as much fun attending as we did organizing it.

Thanks to Google Campus that invited us to host the event in their offices!

An invitation from Google Campus: If you enjoyed this event, there are many more tech/entrepreneurial related events at Campus Tel Aviv.

Special thanks to Opher Brayer who inspired and encouraged me to arrange this event!

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How to build a product that people want - Product Market Fit Methodology