What’s your Route-to-market strategy?
Does your product meet market demands?
Why is your product not gaining traction?
These are B2B and largely B2C/D2C phenomenon’s that give product and marketing teams sleepless nights.
On a broader perspective, “Fintech companies in Nigeria are scaling-up fast and Telemedicine platforms are folding up quick” why is this?
The reason is simple; If a product offers a value the market does not need, the product dies. However, if the market requires a value the product does not exactly offer, the market starves and the product is atrophied. Whereas if a product offers a proposition that meets the needs of a starved market, something magical happens. I am here to talk about this magical concept known as the “product market fit”.
Product-Market Fit literally means being in a good market with a product that perfectly satisfies the markets needs. That is, you’re actually meeting the needs of a popular pain-point. This can be illustrated with a round peg that fits perfectly in a round hole or when you are handed a shirt and it fits exactly without any adjustments. A chilled bottle of coke on a dry scorching sunny afternoon. This is not essentially about how value propositions/POD’s are communicated or Marketing, this speaks directly to the product itself.
PMF is a useful mental model that has its roots from the Silicon Valley and it is used to describe the interplay between a business, it’s products, and customers. Learning about Product-Market Fit will help companies see the world differently, inspire new ways to create value for their customers, and generate growth for the business. The level of success a product records is entirely dependent on the relationship between the intrinsic value the minimum viable product proposes, how the market perceives it and the steps taken to ensure continuous improvement. However, writing on a topic like this without mentioning about the other different levels of relationships between products and consumers is a felony — to say the least.
There are essentially 4 ways a product and the market interface;
1) Product-Market Meet: Here, the market becomes aware of the product but is slow to adopt. The products are advertised, displayed & publicized but the market just stands, stares & does nothing. For instance, when Swipha launched their 80/480 A/L brand Arenax Plus into the Nigerian market, a lot of advertising was done deploying different Point of Purchase displays and guerrilla tactics. It’s obvious those tactics did not exactly deliver on ROI’s as the market is still yet to accept the Product with deserved use cases — the market share quotas are still the same. Many other novel products launched into new market categories are likely victims of this sort of relationship.
2) Product-Market Greet: When market adoption of product is driven by “artificial stimulants” e.g., free samples, promos, deals & discounts. When the product owner has to incur significant losses to catalyse patronage. Many technology companies, that prioritize growth over profit, fall under this category — e-commerce giants Jumia would be on the spotlight here. PMG is often mistaken for product-market fit and as a matter of fact, many Nigerian brands, particularly in the Pharma sector are on this table.
3) Product-Market Fit: When the market is driven by the product’s intrinsic value-add. When the product’s utility is enough incentive for patronage. But PMF is transitory. It can be achieved then lost & vice versa. Coca Cola is a great PMF example. This also explains why the Telco and FMCG sectors are very lucrative in Nigeria and also why a section of these companies’ kitchen cabinet is made of “government-prenures”. It is important to state here that PMF should not be confused with brand-fit, which is a concept synonymous with a companys brand image.
4) Product Market Hit: When customers are beyond deeply satisfied. When they become unpaid evangelists. When they market the product more than the company itself. When their sense of identity is deeply wound in the product. Apple devices & Baba Ijebu stakes are examples.
How then do you know your product has a reasonable PMF?
You can always feel product-market fit when it’s happening. The customers are buying the product just as fast as they are available— or usage is growing as quickly as production is increased. Recommendations are coming from all directions and other companies are trying to imitate your product and processes.
Your products are disrupting the industry -throwing the status quo off kilter. There’s a constant need for expansion and you’re attracting investors from far and near. Inserts Paystack’s exponential growth since 2018 and the current boom in the fintech space.
The PMF is not exactly easy to achieve as a lot of start-ups never reach it and it’s not for want of trying or lacking of competence. Many start-ups fail because they run out of money before achieving PMF.
So, how do you hack for product-market fit? I would say it is not about having a flawless-killer MVP or employing a battalion of growth hackers. It’s about feeling the pulse of the market, Mark Anderseen once said “a market that doesn’t exist doesn’t care how smart your product is”. This statement doesn’t exactly hold true for the developing African business landscape as several markers reveal that many brands disrupt because they had the foresight and grit to innovate “market-creating platforms” in uncharted territories. Some other companies have gone ahead to offer intrinsic value by concentrating on an existing solution — making it a lot better and easier by improving on its form and function (UX/CX). Automation is even the secret in some cases.
Product-market fit however, is never a sprint but a marathon with several iterations. The reality here is that how a company actually generates revenue and how it thought to generate revenue are concepts that are sold separately —the magic only happens when your solutions meets underserved needs and desires. I hope to dissect this further in another issue.
Before then, round peg or square hole. How does your product fit?
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