The Flaw in Product Market Fit: What they don't tell you
At CognitiveClouds, we tend to meet and interact with many clients who are waist-deep in their search to find product/market fit for their startups. In this past decade, we’ve worked with multiple fortune-500 companies and early-stage startups. With the early-stage startups, it’s been interesting over the past year to reconnect with the founders and try to ascertain what led to some of their incredible success where some of our clients had to re-think their business models.
Almost every successful founder story behind the scenes is the same: work relentlessly on an idea, try out all kinds of ideas that don’t scale, struggle to gain consistent traction, iterate and pivot before finally landing on the idea that has product/market fit. As we ourselves transitioned from a services-only company to a services and product-based company, there’s so much we got to learn from the messier moments when we were in the trenches with our clients, helping them scale from zero to one. These are the inside stories you read about in the press releases that often polish off the initial few years of constant struggle, boiling it down to one small hiccup before the flashy success.
But the hard-won lessons do tend to become fuzzier as a startup grows, and the further away the founders get from that early turbulence. That’s why we were thrilled to be able to connect with multiple founders right when they saw marked success and acceptance of their product by the target market. But we did learn a lot from startups that had to pivot after multiple iterations too.
Early on, you’ll be confronted with many points where you either need to persist or pivot - this dilemma usually falls on the Founder. It’s easy to measure product-market fit after you’ve achieved it.
But how do you identify product-market fit before it exists?
Technically, you can measure product/market fit with surveys that categorize what percentage of your users think your new product is a ‘must-have.’ As an early-stage startup, your product/service will probably only cater to a small segment of the market. But hopefully a good market.
In 2020, at the start of the pandemic, our developers worked closely with a health-tech startup in Singapore to build an online marketplace for holistic healthcare. We worked on a tight deadline to get it in front of the customers as quickly as possible. The first version of the app helped the team raise pre-seed funding. However, after a year of trying every trick in the book to get customer traction, the product was just not taking off. They tried everything from one on one problem solving of customers to help find the right doctor, hosting in-person meetups, partnering with high-profile doctors from across the world, and numerous product iterations. By 2021, the health-tech marketplace was flooded with competition. In many ways, it also meant there was significant market validation. But why wasn’t it working?
So how do you know when to push through and when to pivot? Looking back on this experience, the Founder decided to trust her gut and recognize that she had hit a wall. The chance of a marketplace working for the kind of product they were building was slim. When customers are looking for a specialty doctor, it’s an extremely high-trust situation and is typically done through word of mouth. And unlike Airbnb, with medicine, you’re looking for one doctor that works for you. Here you’re not looking to come back to the platform over and over.
Product/market fit is often less about meeting specific numbers and percentages and more about a tangible understanding of who your customer is. Finding product/market fit can end up being identifying that one problem that you weren’t able to see early on that will seem so simple and obvious in retrospect.
Setting her sights on the pivot to virtual clinics, the Founder of the online marketplace for holistic healthcare downsized her team to just herself and her co-founder and worked with us to move as quickly as possible. Every product iteration launched brought us closer to the right answer. So the faster we put products out in the world, the faster we’d get to something that works. No one was convinced that it would be possible to build and launch a fully-functioning virtual clinic in one month with an outsourcing partner and without a full-time engineer on the team, but we did!
Within two and a half months of launch, they went from supporting three doctors in the Bay Area to powering tens of clinics in nearly every state across the country. After years of pushing towards product/market fit, the gears had finally clicked into place.
In pre-PMF days, lean on contractors before building your full-time team. Even with a small in-house team, there is a high chance you’ll find it exponentially harder to move and pivot fast, as opposed to when it’s just you, your co-founder, and the outsourcing partner. The people you hire will expect more structure than you can offer in the early few stages. If any of this sounds interesting and you’d like to hear more, reach out to our team here.
Our product development experts are eager to learn more about your project and deliver an experience your customers and stakeholders love.