Which Is More Important: The Product Or Market?
The question of which is more important, product or market, is an ongoing question, and the answer depends on who to talk to. It’s a question every entrepreneur has to address before and during the development of a startup.
Author Tren Griffin at 2sig.com (Andreessen Horowitz et al.) put together some great “answers” from people who would know.
Why markets matter more than anything else. (Investment approach).
“Give me a giant market, always.” You find a great market, and you build multiple companies in that market—author Dan Valentine.
Looking at all three parts: people, market, and innovative products. All three are required for success. Note, you can’t change a market, but you can change your product. “By Andy Radcliffe
Founders have to choose a market long before they know whether they will reach a product-market fit. Chris Dixon.
What is product-market fit?
It’s a verified Value Proposition. Customers buy your product and like it so much, they tell others, giving you organic sales.
“To reach delighted customers isn’t just product-market fit, but product-market scale” Casey Winters.
“getting the product right means finding product-market fit. It does not mean learning the product or launching the product. It means getting to the point where the market excepts your product and wants more of it. Fred Wilson
When you are not at product-market fit, focus on getting to market-product fit. Change whatever you need to do. Forget everything else until you get product-market fit.
Marc Andreessen argues that any startup’s life can be divided into two parts: Before product-market fit and after a product-market fit.
How do you reach product-market fit?
You can reach product-market fit serendipity, but the process to get to serendipity is incredibly consistent. Andy Radcliffe First, you need to define and test your value hypothesis. Once proved, move on to your growth hypothesis.
“ in the early days of a product, don’t focus on making it so robust. Find product-market fit first, then harden“ Jeff Lawson.
Product market fit is not a magic elixir. It signifies an important milestone that is necessary but not sufficient for success. Once you have product-market fit, you must still find a sustainable growth model and create a moat against competitors.
Until you get product-market fit, you want to live as long as possible and iterate as quickly as possible. Sam Altman.
How can you tell whether you do or don’t have a product-market fit?
You have product-market fit if you have organic sales, media attention, cash building up, etc. Sales without advertising require huge word-of-mouth, which requires delighted customers.
A problem for entrepreneurs is “they don’t have actually have a product-market fit when they think they do. Alex Schultz.
Is first to market critical?
“ first to market seldom matters. “ “First to product-market fit is usually the long-term winner. “ Once a company has achieved product-market fit, it is challenging to dislodge it, even with a better or less expensive product“ Andy Rachleff.
Note: Neither Apple, Google, and others were first to market.
What are some product-market myths?
Product-market fit is always a discrete, big bang event.
It’s plenty obvious when you have product-market fit.
Once you achieve a product-market fit, you can’t lose it.
Once you have product-market fit, you don’t have to sweat the competition.
Markets and competition are always changing. Constant adoption is therefore required to retain product-market fit. Ben Horowitz.
What problems are caused when you only think you have product-market fit?
One of the most common ways startups fail is premature scaling. This means spending money on growth before achieving product-market fit. Sales from the early adopters are not the mainstream market. Startups need 2 to 3 times longer to validate their market than most founders expect. Steve Blank
Product-market fit is a critical goal for every startup. While the definition appears simple, the ability to get there, know when you have it, and how to exploit it is complex. Where are you at in this journey to product-market fit? Before, on the way, or After?