Any tech startup has a grand vision of launching a product that is cutting edge, never seen before, and transformative in concept/design/functionality in a digitally driven era. A product that they know will make the lives of consumers easier, or solve a problem they’ve been experiencing. This is true in both B2B and B2C markets.
However, the success of many tech startups hinges on being market-fit — the concept that you need to be in a good market with a product that can satisfy that market or all else will fail. It’s the key milestone that technology companies need to reach before they can successfully scale with any confidence.
The problem is, in an era of rapid digital transformation, products and services flood the market every week. As such, many startups simply don’t know – or find it hard to tell – when they’ve achieved market-fit.
These five signs will help you determine whether your product is fighting a losing battle or is market-fit for launch.
1. Repeated Early Adoption
Undoubtedly, the best sign of great market-fit is when beta prospects (from your handpicked primary audience) start purchasing and using your product without any prompting, and then follow up as repeat customers or refer you to others.
A great indicator is if people have bought your product or taken advantage of your service offering and continue to do so after a period of time. That period of time doesn’t necessarily need to be years or months, but it shouldn’t be just a few days either.
If nobody is buying your product when you have handpicked a target audience for early adoption, then alarm bells should start ringing. It may be as simple as a slight wording change in your initial reach out, website or landing page. It may be that the offer needs refining or promoting to a different target group.
2. Sign Of Organic Growth
Organic growth is a great sign that a product is hitting the right spot in its target market. If people feel compelled to share or distribute the product naturally – through word of mouth or social sharing – it’s a strong sign that your product has potential.
Of course, added marketing initiatives can amplify this effect – and should be explored to find secondary and tertiary audiences – but it should not be the burden of marketing alone to drive this growth strategy. A product that is a good market-fit will do this automatically in its early phases with very little extra marketing help. But as you look to scale in with secondary and tertiary audiences you will need to perform greater levels of A/B testing, persona profiling, measuring, tracking, and analysis.
3. Implicit vs. Explicit Need
Some of the most successful technological innovations of their time were the ones that solved a problem consumers didn’t even know existed (implicit need).
Take, for example, Facebook and Twitter. The former was founded in 2004 and was serving its purpose perfectly. The latter then bounced onto the scene in 2006 offering something slightly different. Up until this time, Facebook users hadn’t clamored for an alternative, but when one came along they embraced it with open arms.
The bottom line is that consumers don’t often cry for a specific new technology product or service because in an era of rapid digital transformation the goal posts (i.e. peoples’ needs) move so fast. As a result, they often don’t know what they need until they see it making a tangible difference in other peoples lives.
Not every technology product meets an explicit need, which is why consideration of industry pain points, trends and how they relate to your USPs are crucial to your initial product launch strategy. Think outside the box!
Many products and services achieve a great market-fit because they are released at just the right time and leverage much of the technology that’s available. Remember the above – market conditions, industry trends and pain points – and ask yourself how your technological innovation services a need, either implicit or explicit. Act in a timely manner and articulate tactically astute USPs for that time.
Times change and technology products or services that can adapt will always do well. For example, think about CDs, iTunes and Spotify. It wasn’t so long ago that people were still listening to music on CDs. Then came the convenience of digital downloads. Before long Spotify moved the goalposts again with cloud-based streaming. How long before Amazon, Apple or Google change consumer behavior again with further technological innovation?
5. Remain Open To Change
Many technology products will not find a perfect market-fit right away – or if they do, advancements in technology will change peoples’ perception of need too quickly for them to react. That’s why businesses need to be prepared to adapt to market demands and change their offering as appropriate.
Of course, it’s okay to miss the mark on your primary audience first time around. Many of the world’s most successful technology startups, entrepreneurs and business owners didn’t get it right on their first attempt, but they quickly reacted to signals in the marketplace to improve their appeal. It pays to be agile and responsive with your technology offering, so you can give consumers what they want, when they want it.
It’s all about delivering value based on need. In a crowded technological landscape being market-fit is a constant battle, but one that delivers huge rewards for those that make the lives of everyday people easier, more fun, more productive.