How will you know if your GTM strategy is working? Not having PMF is often easier to spot than having it. If your GTM is working, you will have a level of market demand pull and this is known as Product Market Fit (PMF). In some cases, seeing PMF will be observed quickly. In most cases, however, determining PMF will take 9 to 18 months. And, it may never be achieved. PMF can be seen across the stages of the customer journey (early stages highlighted in red), but you are measuring the excitement and value around your new product. Marc Andreesen’s classic definition of PMF is that if your product is no longer available, then a significant portion of your users would be very sad.
PMF is more than just about the product. It is an alignment between the GTM strategies and should consider the product, market, channel and business model. Consider the market first and the problem you are solving. Then, consider the channel you will use to sell your product. You cannot mold a channel for your product. You can only mold your product for a channel. Your channel is determined by your model and vice versa. Lastly, you need to consider your model with the market.
PMF is a point-in-time metric that will change over time — including the possibility of losing PMF. When evaluating PMF, consider if you are delivering your product through the right channel (product/channel fit)? if the selected channel is sustainable for a profitable business (channel/model fit)?, and if the customer is willing to pay for the value that will sustain your business (model/market fit)? Since these four aspects of your business are dependent upon each other, if one needs to be changed, then the others will likely also need adjustments.
PMF is a way of assessing (a) the ability of the market to sustain your business and (b) the ability of your product to meet the needs of the market. There could be two reasons for poor PMF. Either there may not be a market for your product and/or marketing is misfiring and there isn’t enough brand awareness of the company and product. Since the market plays a major role in the success of a startup, listening to the market is important to detect changes and for those changes to influence your business priorities. It is a kind of go/no-go decision (yes, I watched Hidden Figures again this weekend). PMF means that it is “safe” to scale your business.
Remember, you are creating the processes necessary for your business to scale. The size of the business — lemonade stand, food truck, storefront — is less important than laying the foundation for the next phase of growth.
Part 1 of this series can be found here.
