How do you define Product-Market Fit?

Instead of showing you the definition of PMF, I will show you HOW to define PMF.

[To satisfy everyone] Here are the three standard definitions of PMF:

  1. To have PMF, you need to have both a good product, and a good market – both in terms of size and affinity to your product. In other words, neither a loose affinity in a huge market nor a lot of affinity in a very very tiny unviable market for a business to succeed in will do.
  2. Creation of a minimum viable product that addresses and solves a problem or need that exists.
  3. You have PMF when you have your first 10 customers outside of your network.

**I’d like to preface with – I am a product-first marketer. I do not believe in putting a single step (business plan, launch strategy, financials, hiring…) before your product development, both in time and resource allocation. Therefore, these strategies are meant to be the easy/cheap first steps to take so you do not sink time/capital into forcing your square product into a round hole.

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First, here are 7 Ways to help you prove viability of your idea (pre-PMF) before you have a final product:

Way #1

Create Quora ads on discussions about the pain point, and use a call to action similar to: “What if there was a solution to _____ in the form of _____?” Then describe your product in the description. The KPI for this is click-through-rate. The high CTR for your ad will be closer to 5% (yes, you can get high CTRs on Quora ads). Test out a few different value propositions (product description) below the headline. The winner is a good indication of the most valuable benefit or product description.

Way #2

Setup demo’s with the market leaders offering a similar solution to yours in the market and ask them why they do not add/offer the feature/benefit your product is going to include. You can find out price points for your competitors on these calls as well. Depending on your industry, you may want to continue the dialogue deep into the sale to get as much information as possible about their pricing and customer-base. Your PMF will be determined by (a) the lack of direct-competition to your main feature/benefit, and (b) the variation in pricing from those who do offer your core benefit, and (c) their answers to case studies related to customers in your target audience.

Way #4

Create a landing page with an offer to be included in the beta for your future product. Explain the product and it’s benefits very clearly (use an explainer video for best results) and embed a form with name + email + the question “How much time or money will this product save you?” Then drive some targeted traffic to it and if you can capture an email between $5-$10, and the messages are all pretty similar (how they would benefit), then you can feel confident you’re on the right track.

Way #5

Load an open-sourced version to GitHub and Hacker News – This is a strategy that has worked well for a lot of software/saas/apps. The goal is to gain feedback on you app/tool from fellow engineers and potential future customers. If your library gains a lot of interest on those channels, you have something. This step can be very strategic for recruiting purposes as well.

Way #6

Direct cold email to your target users. Don’t try to sell them. Make the email request solely about appreciating their feedback with a quick back-story to your product. This is an often overlooked path to user feedback, but cold emailing your potential users can be the best and most honest feedback you will get. This is because you are not welcome in their inbox, so if your product does not ‘wow’ them, they will replay with destain. And if it does make them both surprised/happy, they will give you some great feedback. The KPI for this test is total number of positive replies to total replies (obviously above 50% is your goal).

Way # 7

Use http://www.fiverr.com or User Experience Research Platform to order reviews of your mission/vision/product mockups – anything you’ve got. Put your plan onto a few pages of a website, then order multiple user-testing/feedback gigs on fiverr, or post the project to User Experience Research Platform for group feedback in recorded video and testimonial format from a target audience of your choice. The latter is the cheapest, but both will produce valuable feedback.

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Creating your PMF processes you can then use for better hiring decisions and marketing strategy

At a SaaS company I work with, I created a strategy to define PMF which was then used to execute launch strategy into each new market. Here it is:

Step 1: Scraping – Find URLs on directories or social site searches where your customers profiles exist. Either order a scrape for that URL, or hire VA’s to match their profiles with emails (use Linkedin + FindThatLead).

Step 2: Content creation – You are going to need something to keep these people engaged and convert traffic to demonstration requests, beta signups, early adopters etc… The way you build trust early on is through alignments and content. A great strategy is team up with others in your market (non-competitors) and produce webinars, ebooks, data-driven white papers… to build trust in your cold traffic, get click from your emails, and use as lead captures on your landing pages.

Step 3: Create a hook – Search Quora for top questions related to your pain point. Then do a search for your target audiences top needs related to “worksheets”, “templates” or any other type of content that is both valuable and timely-enough to be used as an email capture hook. Then, search keywords you would like to rank for, find authors /bloggers who rank, and start combining and spinning their content to make it more valuable for the readers. Finally, link to their posts in your content.

Step 4: Press and influencer outreach – Start by reaching out to those blogs you linked your content to and offer their admin’s a chance to (a) take that post for their blog in return for backlinks, and (b) collaborate on another post for their blog and/or yours. Then, begin press outreach to anyone who’s mentioned the pain point your product solves to the market you’re entering.

Step 5: Lead funnels – Using your new content hooks, and forms for product demo’s or webinars, create landing pages and capture interested buyer contact info.

Step 6: Cold emailing – Begin cold-emailing the scraped emails links to yrou lead capture landing pages. *Important: don’t email them from your primary domain, use a .co or another extension so your domain doesn’t get picked up by any spam filters.

Step 7: Retargeting Ads – Finally, create retargeting ads on Linkedin, Adroll, Facebook and/or Adwords (depending on your target audience) to get the last touch on these customers to get enough interest to push them through your funnel.

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7 steps to testing your PMF using paid ads:

  1. Define the “Markets” – Use Quora/Linked/Adwords/Facebook audience targeting to narrow some focused-but large audiences for you to target.
  2. Roll out multiple variations of copy/creatives for this market – Create a few variations of headlines/descriptions for these audiences to see what offer works best with which segment.
  3. Create a conversion – For this direct-response test, you will need a conversion step. This can be content upgrade, a demo request, a beta involvement form, an ebook, a webinar registration… it doesn’t matter. Just make it valuable, and get their email.
  4. Build your landing page – Use Unbounce, your CRM, WordPress landing pages, or other lead page provider to create something your audience will respect.
  5. Create a conversion page – This is a very important step for tracking – make sure you have a unique URL to use as a “thank you” page for your campaign.
  6. Run traffic – Use the copy/creatives as ads on Facebook/Instagram/Linkedin/Quora/Reddit/Adwords to see which sticks on which audience.
  7. Repeat on next audience…

I hope this helps. For some precise tips, please schedule a call with me here.

Best,

Alex

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