Demystifying Product-Market Fit
Product-market fit has been widely accepted as this mystical thing that you know when you reach it but the best you can do in advance is good research to improve your odds of finding it.
Good news: That belief is wrong.
PMF is not a probability game. It is knowable in advance if you know what to look for.
For business leaders, this means that you can know in advance if your product will take off (or not). But you won’t know by running market studies or detailed (and expensive) customer surveys and segmentations or creative sessions that generate something “truly unique and differentiated”.
We developed the 0-1 Sprint to help founders of leading Silicon Valley startups find product-market fit. But in doing so, we also developed an incredibly powerful tool for business leaders in established companies to know if their product is on track to take off or be a flop, and identify the often tiny changes that cause a customer to rip the product out of your hands.
I have a great product, why isn't it selling?
In the course of advising hundreds of startups on their 0-1 journey and reviewing more than 4,000 sales calls, an interesting phenomenon emerged to Rob Snyder:
The founders were almost uniformly intelligent, thoughtful, hard-working and hyper-aware of their customer’s pain point. Customers were interested and willing to talk (even giving glowing, promising feedback about the product). The product was thoughtfully and professionally developed and presented, often showcasing impressive features that far outperformed the competition.
But customers were not buying. Or if they were, they were buying slowly, after a lot of pushing, follow-ups, promotional pricing, long trials, etc.
And the founders were left scratching their heads: Is this what the first step toward product-market fit looks like?
(The short answer to that question is “no.” In our experience, slow or painful sales cycles rarely become “easier” or faster even as you get more experience. Products that “fly off the shelves” do so basically from Day 1, not by some magic that happens on Day 239.)
The crazy thing that kept surfacing, was that many startups did have a product that could have product-market fit. Sometimes, they were a simple tweak away from their product taking off. The hard part: knowing what to change.
We’ve seen small tweaks to how a product was positioned, often in counterintuitive ways (in one memorable case, by increasing pricing by 10x) and without changing a single thing about the product, literally cause a product to go from “yawns” one day to “millions in ARR” within a matter of weeks (such as Muuktest).
As we established, these weren’t dummy founders. They were smart and hard working. But by following a traditional startup methodology, they were focused on the wrong things, and were missing the very clear feedback that customers were giving them about their products.
“The customer rarely buys what the business thinks it sells him.” -Peter Drucker
A traditional, thoughtful, disciplined approach to product development has (until now) been focused on answering important-sounding questions like:
- What is the customer persona we are serving / designing for?
- What is the pain point that we will credibly solve? (pain killers vs. vitamins, etc)
- What is the compelling business case for our product? (ROI, cost savings, performance improvements, …)
- How does our product differentiate from the competition, and how do we make the differentiation clear? (technical features, pricing, positioning, …)
As literally thousands (or tens of thousands) of product leaders and startup founders can attest to: You can do all of these correctly - outstandingly, even - and your product still flop.
Instead of this approach, business leaders should be hyper-focused on two things, which, if understood correctly, are the closest thing to guaranteeing product-market fit as possible:
- Is there a Project on a human being’s to-do list that they cannot avoid or delay?
- Are there acceptable options out there already for that project? Including the option to do nothing. (And don’t underestimate a person’s ability to endure big pain points for long periods of time.)
Two example methods that we often use to hold ourselves accountable to these:
- The “social-security-number test”: What is the project on a single, real human-being’s to-do list that causes them to purchase? (not a company’s priorities, not a persona, not an abstraction of any kind. A single human being with a real social security number.)
- The “weirdly-fast” insight: What was going on in the life of one customer who purchased weirdly fast?
These sound simple because the ideas are simple, but they are radically different from traditional product launch methodology and have massive (positive) implications for what you bring to market and how you sell it.
Seeing products through this lens is one of the hardest things in business until you really get it. And then it will revolutionize how you develop and launch products.
Running a 0-1 Sprint when you already have a product
So you’ve already decided that you are going to commercialize a product. Good for you! The goal is to move heaven and earth to ensure that it is a success.
Every business, before launching a new product, should run a 0-1 Sprint. In less than a month, this will tell you if your product is likely to take off, and even more valuable, will tell you almost definitively if it will not take off (and why).
In this case, you already have a product that you’re getting ready to go to market. So the goal is very simply to validate or invalidate a specific hypothesis:
Hypothesis: When I put this product in front of a customer, they will rip it out of my hands.
(One note: This test can be postponed but it is ultimately unavoidable. You can either learn it in a 1-month sprint in advance, or you can invest perhaps millions of dollars and months-to-years of time preparing to go to market and run the hypothesis “live,” at scale, and hope it works out.)
The simplest approach to running a 0-1 Sprint is this:
Create a 0-1 Hypothesis, which includes:
- Who your customer is (as specific as possible)
- What the project is that they are trying to accomplish and when it is their #1 priority
- The existing options they have, and why they are unacceptable / disqualifying
- How your solution allows them to accomplish that project, without the limitations they experienced with other options
Line up 5 customer meetings where you expect some of the customers to purchase.
See if they buy what you are selling (e.g., pre-order, they initiate a sales process, co-invest in development, etc).
There is a specific methodology to this, but this is in essence what it boils down to.
What you will learn from the 0-1 Sprint
You are answering the “big product-market fit question” by answering the “small product-customer fit question”: Did this product fit a specific customer in a way that caused them to purchase?
There are four key insights that are likely to come from this:
- Situation: Something specific was going on in a customer’s life that led them to rip the product out of your hands (and that you should be focused on when positioning your product).
- Feature: There is a specific feature that is more important than everything else because it helps them accomplish their #1 project, and you should basically make your sole focus that feature.
- Confusing elements: There are parts of your product that are confusing or distracting that are getting in the way of your customer buying your product.
- Pricing: Your customer has a specific way of thinking about pricing and if you present in any other way they won’t understand or won’t be willing to buy.
We recommend repeating this sprint for a new product until you can predict when a customer will rip the product out of your hands. That is the moment to scale and fully go to market. (for startups, it is the moment to fundraise, start writing code, scaling a sales team, etc).
You aren’t waiting to have the perfect product (like I said, your product might actually be the exact same as it was, no changes!).
You are waiting for the successful complete 0-1 Sprint because it is how you learn what your customer is trying to accomplish but can’t, and how to talk about your product in a way that results in that customer ripping the product out of your hands. That, at scale, is product-market fit.
Implications for your next product launch
This is the 0-1 Sprint that we wish had existed when we launched our first companies and products. We believe every single company (from startups through large enterprises) should be running this Sprint before every product launch. (A smart capital allocator would require this as an early stage-gate to their business’ product development pipeline.)
You can start to DIY 0-1 Sprints in your organization (and we recommend you do this. You’ll be surprised how your speed of progress changes as you implement). Here are the essential resources to get started:
- Read: The Pull framework, in detail (20 min), or listen in podcast form
- Watch: Notes on the Physics of Startups
- Read: The Power of PULL (Amazon, Barnes & Noble)
- Follow: The Physics of Startups (Substack, Podcast)
Get us involved
We have run 0-1 Sprints with dozens of startups and are being pulled into enterprises to begin to apply this methodology. If you want to work with us, reach out.
About us
Rob Snyder: Creator of the PULL framework and author of The Power of PULL, who has guided 50+ startups from $0 to $1M+ ARR.
Robert "RC" Carpenter: Two-time founder and former Bain & Company consultant, Harvard Business School MBA, who leads The 0-1 Sprint with companies.
