What is product/market fit, and how to find it?
There’s a saying in the startup world - 90% of new startups fail. Regardless of how accurate this is, most people would agree - the hardest in building a new venture is going from 0 to 1 - from an idea to an actual business with paying customers.
The problem is very often that founders jump straight from idea to solution, without validating the problem behind the solution. They go straight to building a Minimum Viable Product (MVP), without a proper validation process. It isn’t surprising that many end up building something people don't need, i.e. they don't have product/market fit.
Marc Andreessen, the father of this concept says: "Product/market fit means being in a good market with a product that can satisfy that market." Pretty vague, right?
First of all, you don't have a product/market fit if you don't have a product. This means an idea of a product doesn't cut it. You need something more concrete, which your customers can use.
Secondly, you need to know where your next paying customers are coming from. Friends and family don't count!
Product/market fit is the point when you have (repeating/recurring) customers AND enough data to predict growth.
So how can we bring that chilling 90% fail rate down? The answer is by gathering as much evidence as possible, right from the get-go. We call this early learning process: Product/Market Fit Discovery.
Product/market fit discovery is a systematic learning process for testing our assumptions, gathering unbiased data, and discovering early evidence of product/market fit (without a product). Instead of simply trusting our idea is great, we start collecting unbiased data, and build our product based on these learnings.
Finding answers to these questions can substantially increase the possibility of reaching product/market fit in the later phases of product development, and lowering the risks of venturing.
You can now watch the entire webinar recording on our website and listen to the interesting panel discussion where Riku Kokkonen is joined by Marko Oksanen from Coventures, Aki Soudunsaari co-founder of Naava, and Pauliina Lämsä, a venture capital investor from Evli Growth Partners.
Click here to download the webinar recording!