(This article is part of the MicroConf 2015 Recap. Want to explore more talks from the event? Go back to the Recap Hub)
Main Concept
Accelerating Growth: Grow Faster Without Working
Three Key Points
- You need product/market fit
- Strong Word of Mouth is a good signal that you have a good fit
- Create tweets and a blog post before you write code to understand the future state of your customer (or company)ย
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Talk Recap
Self-Funding vs Raising money
- Raising Moneyโ When you raise money, you can spend the money ahead of your revenue
- Self Funding โ When you self-fund, you can spend the money as you make it from your customers.
- Like Valve โ shape your own company in your own way (valve handbook)
What’s In It For Me (WIIFM)
- How to determine if youย have product/market fit and analyze it
- An early stage product hack to get closer to product/market fit
- How to build something people want by workingย backwards
Long, Slow SaaS Ramp of Death
- You have limited resources.
- You have limited time.
- You have to focus.
ย Top 20 reasons startups fail
- No market need (#1)
- Ran out of cash
- Not the right team
- Got outcompeted
- Ignoring customers
- Really, it’s all about a poor product.
Thesis: You Need Product/Market Fit Before You Can Grow Your Business
“Product/market fit means being in a good market with a product that can satisfy that market” โ Marc Anderson
- Customers are a great product/market fit
- Word of Mouth โ Strong Word of Mouth is a good signal that you have a good fit
- Customer Addiction โ How passionate are your customers?
Finding Product/Market Fit
- Step 1: Find out why an important part of an existing product or category stinks.
- Step 2: Make it 10x better
CrazyEgg
- Started by asking “What sucks about Google Analytics overlay”
- Tested on CrazyEgg, learned you wanted to track every click
- They figured out the pain point โ and that resonated with the customers
- Doubled down on what they knew. Continued to dig deeper into the pain and solving that pain.
KissMetrics
- Built in one month
- Used EC2, S3, SQLite, etc
- Horribly slow and ugly code with bugs
- Took 7 servers for just 30 customers
- Started with a single question: What’s wrong with Google Analytics funnels?
If it’s good for customers, it’ll become the norm…
Or, everyone fucking copies you
[mc_tweet]”If it’s good for customers, it’ll become the norm. Or everyone will copy you” (@hnshah)[/mc_tweet]
How to Analyze Product Market Fit
- Product/market fit survey
NPSRetentionEngagementChurn
I ask existing users of a product howย they would feel if they could no longer use the product โ Sean Ellis
How would you feel if you could no longer use Google Analytics?
- One of the product/market fit responses you get is people afraid that your product will go away
- If enough people are very disappointed, you’ll see product/market fit
- Using these questions gives you a signal on if you have product/market fit
- Aiming for ~40%+ of people saying ‘somewhat disappointed’ โ that shows that some folks are experiencing a need
- “I can go and try and improve my product / value prop to move them up to another category
- When the majority of people can’t live without it, prepare for growth
Alternative solutions…
- Ask people what they would use if they couldn’t use your product
Primary Benefits…
- Ask what the primary benefit that people receive from using….
Have you recommended….
- Asking to learn what language they use to describe the product and how they pitched it to a friend
Minimal Viable Product
- Focus on building a ‘skateboard’ โ it can be ghetto.
- Every part of the process right, but just worry about getting people from Part A to Part B
Do Research Up-Front
- Take the time to do the research up front
Working Backwards
We try to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it. โ Amazon (Quora Post)
- Create tweets and a blog postย before you write code
- Get a discipline around writing the blog post first before you write the product
- …what do you need to know about the customer to write the blog post?
- Amazon takes their goal and then backward plans / works backwards (Amy Hoy on Backwards Planning)
- “If I have to provide this specific product experience to win, this is how I can get started”
You Are Not Your Customer
- You can start with the problem you have, but you need the customer
- You need their input
- You need their feedback
- You need the product/market fit feedback fasterย beforeย you start buildingย
Speaker’s Slides
Recommended Resources
Links to Speaker’s Websites
- Twitter: @hnshah
- Product: KissMetrics
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(This article is part of the MicroConf 2015 Recap. Want to explore more talks from the event? Go back to the Recap Hub)