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Coming Up With the Perfect Product-market Fit

Updated: Mar 19

The following is an article “Coming Up With the Perfect Product-market Fit” by Marc Primo.


For startup entrepreneurs, having a product-market fit during the early stages of operations is vital in plotting the trajectory of a business’ success. Unfortunately, only a few really know what it really is and what it actually does. Here, we’ll be discussing the ‘whats’ and ‘whys’ of this business essential.



The term ‘product-market fit’ came from Betterment founder Andy Rachleff but was pushed at the forefront by Netscape founder Marc Andreesen when he claimed a startup can have optimistic chances when it is on a good market with a product that satisfies its consumers.


For startups who are still in the dark about the concept of product-market fit, here’s a guide on how you can grasp its true essence and finally come up with one.


The Concept. As a startup, you need to identify a strong market first and the best minimal-viable product or service you can offer to attract that market. You should then track and record the trends to come up with indicators for startup growth. This is achieved by auditing your products and services from the perspective of that strong market you identified. Do your product and service satisfy those customers? Andreesen said that product-market fit is achieved when a startup is able to make its customers happy who are in a good market, being those that are either sizeable with good profits or small with high demand for product.  


While it may seem pretty complex as you start, you’ll know you have achieved product-market fit once you are able to determine the scope of customer needs you are trying to address and how significant your product or service helps in providing those needs.


Realizing product-market fit. Every startup is unique for the next one and there is no one formula that you can follow to realize product-market fit. However, once you achieve it, you could be on your way to true startup success. Always keep your strong market in mind and how you can address their needs. And those needs should really matter to them and be significant, otherwise you won’t be able to achieve product-market fit.


First, you should identify your target market or those customers who show some potential in using your product or availing your services. For this you’ll have to do the usual market segmentation and research so you can identify your strong market and along with their preferences and interests.


Next, you’ll have to identify your market’s specific needs as these can create for you great marketing opportunities for your value proposition, or your unique selling point. After this, you can specify your product or service’s set of minimum viable product features which should only comprise of the most important ones rather than all fluff.


Testing the fit. Once you have come up with your set of minimum viable product features, you can proceed to creating a prototype with the many mockup tools available out there. Test these features by showing them to your target customers and gathering feedback and psychographic analyses which tools like UXPin, InVision and others can provide you with. Another way to test your product-market fit is to apply the 40% rule wherein you perform a survey of your customers and determine if 40% of them are either satisfied with your product or service or prefer to have them as an option in the market. If this is the case, then you are on the right track.


On the other hand, if you are able to measure the percentage of customers who visit your website but leave without making any transaction via Google Analytics, then you can determine product-market fit through bounce rate. A 60% bounce rate is considered high by standards which means you may have to tweak a few product or service features of your digital marketing efforts.


The best way to achieve product-market fit is to keep up with the latest trends and by knowing what your customers really need and prefer. Having these valuable insights about your target market and establishing relationships with them through social media, focus-group discussions, and efficient customer service leads you closer to realizing product-market fit.

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