The Product Market Fit Cycle

Carlos Eduardo Espinal (@cee)Partner | @seedcamp

Since 2007

Over 140+ Companies

Focusing on Product Market Fit

Pre-Seed & Seed Investments

It’s human nature to focus on what you are good at not on what you suck

atand…

Most Founders/Hackers love building productTherefore…

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

Let’s pause that thought & define some concepts

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.

Why do you want to create a company?

· What is your vision? · What are your values?

· What company culture do you want to instill?

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?

This is NOT just a cheesy catchphrase!

Your customer

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

Case Study: The Amazon Kindle

Your Positioning“how you differentiate yourself in the

mind of your prospect.”

In a highly competed market > Differentiate!

Position well, or Re-position your competitors

Case Study: Commuting - Airline vs. Car

Southwest AirlinesThe short-haul, no frills, and low-

priced airline

Case Study: Cars - Quality vs. Experience

Mercedes Benz vs. BMWEngineered like no other car in the

world vs. The Ultimate driving machine

Your ProductAn MVP is more than just about the

code

What Job does your product do for your

customer?

How does your product reflect your values and your customer’s needs?

· Quality· Packaging · Messaging

· Customer Service

Product Focus Case Study: Customer Service

Zappos

Your Go-to-Market Strategy

A Go-2-Market Strategy Includes

· Pricing Strategies· Sales Strategies & Partnerships

· Distribution Channels· Communication Channels

Your Analytics & KPIs

Picking up where we left off…

What can sometimes be the problem?

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

Define a “target” (MVS)Create a “bullet” to hit it

(positioning + product + go-2-market strategy)

The Product Market Fit Cycle

If (startup.status == product market fit) then startup.scale;

|

Else (inefficient_scaling);

Summary- Define your company’s core values &

hire accordingly- Identify a MVS + Define your ‘Bullet’ -

Positioning, MVP, & Go2Market

Summary- Test & Measure w/ Metrics

- Iterate on MVS or one variable within your Bullet

- Rinse & Repeat or Pivot until cash runs out

Thank you@cee

http://www.seedcamp.com