Here is an interesting Twitter thread on how She’s Birdie, personal safety alarms for women, started in November 2019 and is on track to hit $850k in August. Product-Market fit is the big reason. They are also killing it with Facebook Ads.
“There really is one goal, and one goal only: find a product that a few customers need and love, and ultimately will pay for, and evidence that there are many more similar customers.”
Slogging it out on a weak business idea is tough. You really notice it when you have the right product/fit because everything becomes so much easier. ‘An idea is bad when it takes too much effort and time to achieve (and sustain) the desired results.” ‘A good business idea has these characteristics:
- Has demonstrated strong market demand
- Multiplies your effort and returns healthy profit margins
- Is a fit for you as a founder (your skills, experience, network)”
Sometimes a great idea is just how you present it. The first name for Tim Ferriss’s Four Hour Work Week, was “Drug Dealing for Fun and Profit”. There is no way the book would have become a global bestseller for years without the genius name. Try a lot of ideas to find the good ones.
Reid Hoffman offers insights from his first startup that failed. Here are some of the mistakes he made:
- my decision to build my perfect vision rather than launching a less-refined product that we could adapt based on market feedback delayed finding product-market fit.
- Another mistake I made was to focus on hiring people with 10+ years of successful experience in a particular job…When people fail, they think, “I need to learn more.” I should have hired learners, not “knowers”.
- My final big mistake was picking the wrong investors… And when I went to them and said, “I’ve learned from these mistakes, and therefore we should do X,” they responded, “No. We just need to do television advertising, and that’s what we’re going to make the company do.”
“A classic but frequently misunderstood dictum for founders is that they should fail fast and celebrate failure. When I hear this, I think, “No, no, no!” The goal isn’t to fail fast – it’s to learn fast by tackling your most dangerous potential points of failure. By testing your investment thesis as quickly as possible, you give yourself more time to correct your mistakes and change your approach.”
I’ve mentioned the importance of product-market fit many times in this newsletter. It’s important to startup success simply because some business ideas are better than others. When you hit on the right idea, everything seems to work much better. Grinding through a weak idea burns cash and destroys your motivation.
Ann Miura-Ko, of VC frim Floodgate, offers her perspective on product-market fit. There are other important ideas in her video as well so I recommend watching it.
“A lot of people when they say I’m raising my seed investment, they’re saying I need to get to product-market fit. And the problem with product-market fit is it’s this really nebulous concept. And what everyone believes it means is traction. But there’s no like map for how to get to traction.”
“In reality, you know, product is more your value proposition. The promise that you’re making to your customer of why the experience with your product is going to be an order of magnitude better than anything they would have expected. And so on the market side, it’s actually an ecosystem. And it’s your customer. It’s the person who pays, it’s your manufacturer. It’s the distributor, it’s all of the different people in companies that need to buy into what you’re doing in order for you to succeed and what is your value proposition to all of those people? And then finally, the third leg of the stool is actually your business model. How do you make money and most people leave this to the last minute to answer and I would say that’s probably as important as your product because if you don’t think about pricing, if you don’t think about how much people will pay, or how they will pay for it, or how they want to find your product, then you haven’t actually thought about the totality of your product.”
Business Opportunity: Product-market fit is a really important idea that’s worth your time to explore for your own business. MarketExamples, from above, has great product-market fit. Most newsletters never find that level of traction.
IdeaEconomy is not there, yet. I don’t have a simple, communicable idea that clearly conveys value for a particular niche. How about your business? Have you found product-market fit?
Very comprehensive guide on how to make your business stand out in our hyper-competitive world. You can’t differentiate with price or features. With so much competition everyone is basically selling the same things.
“USPs (Unique Selling Propositions) originate from the 1940s and were created for TV ads. Back then, it was easy to have a unique proposition since there weren’t that many products around. Making one-of-a-kind claims was easy. Things have changed dramatically since then.” “Marketing is a game of attention. If you do what everyone else is doing, it’s hard to get it. ” “If your goal is to gain market share and awareness but you have no clear product differentiation, that’s a problem. Unfortunately, it’s not a problem that’s easy to solve.”
Great resource to help you develop and improve your business. I love visual frameworks like this. It really helps to structure your thinking about how to bet your business started and find early customers.
I highly recommend reading through the link. More importantly, do the exercises. That is the only way you will get clarity on your value proposition.
Business Opportunity: This MVP Canvas is based on the Business Model Canvas created by Alex Osterwalder. It was widely promoted in the best-selling book Business Model Generation. It was later used as the inspiration for the Business Model You Canvas. Both books have led to very successful consulting and coaching practices for the authors.
I think a personal development version of this canvas could be very popular if done right. A systematic and visual approach to improving your life could lead to a popular book and coaching opportunities. Think of it as a blueprint to sell to personal development coaches.
Rob Walling of Drip and TinySeed shares his advice on maximizing the chances of business success.
“One of the powers of running small companies is we have enormous amounts of options.”
“Debt reduces optionality.”
Instead of making $500 per month car payments, “you take all that money and you build a damn business.” Rob bought a company for $30k, that is less than what many professionals spend on a car.
Work remotely to cut out your office lease, rent a small apartment instead of buying a new home, cut luxury expenses, etc. and you’ll have a lot more runaway and options to grow your business.