The following was our road to P/M fit. Sorry for the long post...
0.) Identify market
The short version is that one of our co-founders had very deep domain expertise in education and I had been developing a series of education apps for my daughter. We used this domain expertise to formulate our general understanding of the market. Then we spoke with customer after customer about our ideas, their current initiatives, budgets, problems, what excited them, and so on.
1.) Before trying to get P/M fit we created a way to measure P/M fit for our business. As we're a B2B company, we used the following as our top-line P/M fit metrics (a,b are quant, while c is a qual measure):
a. Length of sales cycle (shorter = closer to P/M fit)
b. Number of objections (fewer = closer to P/M fit)
c. Intensity of objections (weaker = closer to P/M fit)
2.) Building on #0, we eventually found an idea that resonated with the majority of customers. So, we built a first MVP. Bluntly, it was a complete piece of shit...and I'm the one who developed it.
However, there were customers who paid for this pile. So we started to try to sell more, but our P/M fit metrics were not good. Cycles were too long, objections were intense and numerous.
3.) Based on #2, we discussed what we thought would be the solution to finding P/M fit. There were two core directions, but we did not know which one would work.
So, we built a 2nd MVP that addressed the problems in our 1st MVP by adding the two groups of features we thought customers would want. We developed both ideas in the same MVP b/c it was a hell of a lot faster than doing two MVPs back to back.
One of the two ideas yielded substantial improvement in our revenue and P/M fit metrics. So, we pushed on this idea by emphasizing and selling only the features that looked promising.
However, we hit a point where our P/M fit metrics were better, but were not improving and were not good enough.
4.) We did not build a new MVP at this point. What we did was modify our sales collateral, our pitch, our emphasis to highlight the features and value prop that most resonated with our customers, while eliminating the areas that caused the most friction in the sales cycle. We kept tweaking the sales pitch until we found one that improved our metrics. Literally, we knew we were ready for our 3rd iteration of the product when customers were pushing us to deliver the product that we had sold them on, but that was not yet developed.
5.) Develop first release of product that a segment of the market clearly wants and is willing to pay for without wasting time or objecting too much.
6.) We continue to do all of the above, but in tighter/faster iterations. We are also using usage metrics to increasingly guide some decision making, but ultimately our P/M fit metrics are still working for us, so we continue to hone/improve them.
>>> Literally, we knew we were ready for our 3rd iteration of the product when customers were pushing us to deliver the product that we had sold them on, but that was not yet developed.
Good for you. I have found similar experiences , you know you have a hit product when people are complaining that you arent taking their money fast enough.
0.) Identify market The short version is that one of our co-founders had very deep domain expertise in education and I had been developing a series of education apps for my daughter. We used this domain expertise to formulate our general understanding of the market. Then we spoke with customer after customer about our ideas, their current initiatives, budgets, problems, what excited them, and so on.
1.) Before trying to get P/M fit we created a way to measure P/M fit for our business. As we're a B2B company, we used the following as our top-line P/M fit metrics (a,b are quant, while c is a qual measure):
a. Length of sales cycle (shorter = closer to P/M fit)
b. Number of objections (fewer = closer to P/M fit)
c. Intensity of objections (weaker = closer to P/M fit)
2.) Building on #0, we eventually found an idea that resonated with the majority of customers. So, we built a first MVP. Bluntly, it was a complete piece of shit...and I'm the one who developed it.
However, there were customers who paid for this pile. So we started to try to sell more, but our P/M fit metrics were not good. Cycles were too long, objections were intense and numerous.
3.) Based on #2, we discussed what we thought would be the solution to finding P/M fit. There were two core directions, but we did not know which one would work.
So, we built a 2nd MVP that addressed the problems in our 1st MVP by adding the two groups of features we thought customers would want. We developed both ideas in the same MVP b/c it was a hell of a lot faster than doing two MVPs back to back.
One of the two ideas yielded substantial improvement in our revenue and P/M fit metrics. So, we pushed on this idea by emphasizing and selling only the features that looked promising.
However, we hit a point where our P/M fit metrics were better, but were not improving and were not good enough.
4.) We did not build a new MVP at this point. What we did was modify our sales collateral, our pitch, our emphasis to highlight the features and value prop that most resonated with our customers, while eliminating the areas that caused the most friction in the sales cycle. We kept tweaking the sales pitch until we found one that improved our metrics. Literally, we knew we were ready for our 3rd iteration of the product when customers were pushing us to deliver the product that we had sold them on, but that was not yet developed.
5.) Develop first release of product that a segment of the market clearly wants and is willing to pay for without wasting time or objecting too much.
6.) We continue to do all of the above, but in tighter/faster iterations. We are also using usage metrics to increasingly guide some decision making, but ultimately our P/M fit metrics are still working for us, so we continue to hone/improve them.