Product-Market Fit: How to Find It and Measure It

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NoorJahan5
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Joined: Tue Jul 09, 2024 7:50 am

Product-Market Fit: How to Find It and Measure It

Post by NoorJahan5 »

You have a fantastic idea for a new product. You can’t wait for it to hit the market. Unfortunately, the odds of it being successful aren’t exactly in your favor.

According to Harvard Business School professor Clayton Christensen, about 30,000 new consumer products hit the market every year, of which 95% are destined to fail.

The extreme minority — products that succeed — are those that achieve product-market fit.

What Is Product-Market Fit?
Whether they’re launching a single new product or a whole UAE Phone Number new business, everyone wants to know whether or not there’s a market for their game-changing idea.

And while the statistics in the previous section suggest the overwhelming majority of ideas aren’t successful, there are lots of signs that can help you identify product-market fit.

In short, product-market fit means being in a good market, with a product capable of satisfying that market. It could achieve this by fixing a problem that previously didn’t have a solution, or by working better or carrying a cheaper price point than the alternatives.

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All too often, entrepreneurs and brands focus on trying to satisfy their market, without first clarifying that the market is “good”. Assuming the product is halfway decent and the team behind it is competent, choosing a great market will more often than not produce successful outcomes, whereas a poor market will generally end in failure even if the product and team are strong.

5 steps to finding product-market fit
Product-market fit can also be thought of as product-people fit. After all, a market is ultimately a group of people. It’s your job to target those people effectively with a product they actually want to buy.

In order to do that, you need to establish a deep understanding of the people you’re trying to reach, then use that information to figure out how your product fits in. Here are five steps to help you do it.

1. Identify your target customer
It all starts with your target audience — the people who will ultimately decide whether or not your product is worth buying, and therefore have the capacity to make it a success (or failure).

Research the scale of the market to understand how many people you will theoretically be able to reach and how much money you could make if your product captures the imagination. Then divide the people within that market into segments that share similar properties and traits, such as:
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