Product/market fit: avoid these mistakes

product market fit mistakes

Product/market fit is the pillar on which businesses are built. It is also a term that you heard being thrown around a lot. But, building a product and “fitting” it into the market can be a tricky road. There are hurdles and as an aspiring entrepreneur you must avoid them.

Every company has had to go through this process. Regardless of whether it was the Australian unicorn, Canva, or a giant such as Apple, or an e-commerce phenomenon known as the Dollar Shave Club. Without product/market fit, those companies and the people who built them would have never succeeded.

This guide explores what product/market fit means and some of the common mistakes that you should avoid when trying to achieve it.


What is product/market fit

This part is simple – you have achieved product/market fit when your product fits the market.

I.e. it means that you have found a place in the market for your service or product. The very basic principle in any free market is that there must be demand which is satisfied by supply. When you come up with an idea for a product, if there is no demand (fit), your efforts have been in vain – no one will buy it from you. Believe it or not, people won’t even take it for free from you. They simply won’t need it.

There must be a space in the market that you can occupy with your product.


Starting with the product

All creative entrepreneurs suffer from a certain degree of “my head is in the clouds”. A wanna-be business owner has an idea one night, and decides that it must be worked on that same night. A few months later, with an empty bank account and no MVP (minimum viable product) to show for it the dream dies. This kind of entrepreneur is bound to fail. Keep your feet on the ground.

Reverse the process. Don’t start with the product. Figure out if there is a problem and a market niche that you could target. There are a couple of ways of finding a problem to solve:

  1. There is a particular injustice or inconvenience that bothers you on a daily basis. It is a personal battle that you wish to win and overcome the obstacle in question. If enough people face the same problem, you have your audience.
  2. Find something that others are complaining about. If you keep hearing the same complaint, that means that either:
    • The existing solutions are not good enough. You can improve on them; OR
    • There is currently no solution, and then you can build one.

If your friends are “content” with everything, have a look at what others are saying. Social media is a great tool to learn about people’s queries and problems. You can also always go on Amazon, and read all the negative reviews for a particular product. What are they saying? Is there a common issue that keeps coming up? Are you uniquely positioned to resolve it?

Solve a problem for those people, and you have your first adopters.


Don’t reinvent the wheel

While browsing the reviews, have a look at what solutions are already available in the market. That entrepreneur who had a “great idea” – they think it was brilliant and unique. However, market research is paramount when you are trying to achieve product/market fit. Avoid the mistake of not doing your homework.

While you are conducting the research, note down any useful features/marketing techniques that your competitors have implemented. Competition is the name of the game. Don’t shy away from it. Big companies certainly don’t – just look at Facebook (now known as Meta). Facebook either buys a company with a product that they like or they outright copy some of the key features and kill the competition.

If you see that customers like particular details/features (remember those reviews?), you have every right to implement them in your product, too. You don’t need to think of them from scratch – others have done a lot of the work for you, you just need to learn from them.

However, bear in mind that as a newcomer… you have to offer something new.


Invent

While it is helpful to look at existing products, taking a risk and innovating will more likely result in higher multiples on your returns when searching for that product/market fit.

Look to build new products that are 100x better than the closest competitor’s products. This is a number one recommendation by the legendary Silicon Valley entrepreneur, Peter Thiel in his book, “Zero to One”. The idea is that your business can only achieve true scale when you achieve the above result.

Having said this, you don’t have to imagine a unicorn right away…


Think small before you think big

Let’s bring it back to point one – finding your niche market. Do not target a large audience. Many entrepreneurs think, “if I have a million potential customers, I just need to sell to 0.5% of those and I will have my positive ROI and I will be rich”. In reality, the wider your audience, the more likely you are to fail.

Start by thinking small. If you sell pet toys, don’t target all pet owners. “Pet owners in New York” – that’s a good start. But, how about, “Labrador owners in New York”? Now you are getting close.

If you have a highly specialised product, landing page or service for that small group of people, they are more likely to appreciate your efforts. With that appreciation you can now start to sell to them, receive feedback and find your product/market fit.

When you find your golden goose product, and there is a product/market fit, then improve again and again. Use your clients’ feedback and never stop this process. That is the only way you will be able to build and grow a sustainable business.


Don’t forget to subscribe to the weekly newsletter so you don’t miss out on the new interesting business case studies, marketing guides & tips.

One thought on “Product/market fit: avoid these mistakes

Comments are closed.