What is the resource-efficient way to test whether or not one’s idea hypothesis has product-market fit? For the hypothesis to be validated, what needs to be true?
Introduction
In order to find the resource efficient way to test whether or not one’s idea hypothesis has product market fit, is to first have a good but small startup team/ idea. After finding a market space to drive a wedge in, a team who is going to help you do it, the next best thing you can do is achieve MVP (minimum viable product), if you do not have this, you are not operating in the most resource efficient way and any growth would be a waste. After you figure out what your MVP is going to be you can figure out whether your hypothesis has PMF by, engaging in deep customer discovery and simply feeling a pull for your product, both of which could be done by 1-2 people.
What is MVP and how to achieve it?
MVP is a complete product, it satisfies consumers and is the very basic product which does not necessarily need to be improved. An MVP should be able to scale by itself and should be as satisfactory as the 4th iteration. It is only when an MVP is achieved should a startup think about scaling, recruiting, advertising etc… but without the MVP, a startup is nowhere. It is the foundation block of any startup. It should be emphasized that an MVP is a complete product, not a prototype, it has to work and be good at the problem which it solves.
Why the MVP is important?
The MVP is the foundation from which a startup can begin to take over a market space, it becomes the wedge within the particular market that MVP is in. Many successful companies would start by having this wedge and then growing from it, Tesla provided wealthy individuals who were obsessed with driving green, luxury electric vehicles, Musk was still able to provide a wonderfully working car, with luxury leather seats and handles. This was a good MVP.
All the companies above after finding an MVP were able to dominate the larger market, most markets have sub sets which if dominated before can make scaling a lot easier. Though this is not necessary as seen with Zoom, Spotify and Peloton who each attacked their respective larger markets and won.
Though this is the potential that comes with an MVP, it is important to ask yourself further questions in order to validate your product, Have you engaged in deep and intimate customer discovery with your early users? And Do you feel a pull in the market for your product? Answering these questions will be the most resource efficient way to validating your idea.
Have you engaged in D&Ms with your customers?
If the answer is no, then start doing so! It is super important to just have conversations with your early users, it provides you the opportunity to iterate continuously until you satisfy those users needs and then pivot if needs be. Chances are if you satisfy a couple of users you will also satisfy many more with your MVP.
How have you engaged with your customers?
While it may be time consuming, talking to people, writing thank you emails, regular checkups on your customers are just as important as working on/ iterating your product, it is also resource efficient. You want early users to feel like they are special, have an inside knowledge and go from there, this is what Spotify did by creating a company as invite only, it drummed up the hype but also allowed early users to be able to voice their opinions to the founders without flooding their inbox. Your MVP has a relationship to the market, in the same way, founders have a relationship with the consumer, in order to achieve PMF you need to ensure that there is regular engagement with your community. Netflix founders had infiltrated community group chats and were able to test the idea of Netflix out to potential users, cinephiles!
Do you feel a pull for your product?
Why is your app only on iOS? How much does your product cost? Why are the servers down? All these questions are wonderful questions to be asked as it shows a pull for your product. Most startups feel the need to push their product when the most resource efficient way to validate your product for PMF is to figure out whether or not you are feeling a pull. Do people really want your product so much so they are wiling to pay for it? They get annoyed that its not working? Or that it is not easily accessible on all platforms then you have a strong sense that there is PMF for your MVP. Most founders naturally feel this, Netflix had said ‘I’ve often felt that product market fit is not unlike hard core pornography: hard to define, but you know when you see it’. A resource efficient way of finding out whether you have achieved product market fit or not is by just asking yourself whether you feel this way!