Why do you think products fail? One of the most obvious reasons behind product failure is that they don’t meet customer needs as much as other alternative products do.

The Pyramid

The ideal way to achieve product-market fit is to look at a model to understand it well. In Dan Olsen’s book, he created a Product-Market Fit Pyramid. His pyramid consists of 5 layers, starting from the bottom (the base layer) which is the target customer that you’re aiming at.

Moving upwards, the layer above that is the underserved need of the target customer. So, basically these two layers consist of the market. The remaining 3 layers are concerning your product. The first product layer is the value proposition (which customer needs are you going to target and how are you going to meet them better than other competitors?). The next layer is the feature set (the functionality that labels the need of the customer). The top layer is the user experience (UX)- which is basically what the customer links with to use the functionality.

With this structure, product-market fit you’ll be able to clearly see how well the decisions you make in the top 3 layers late with the market (the 2 bottom layers).

To achieve product-market fit, you must have a solid thesis across all of the 5 layers, so that you find the pyramid as a way to document the main thesis that you need to get right.

 The Process

A product process is what guides you through how to test the thesis by going up the Product- Market Fit Pyramid. Dan Olsen also had a very useful guide in his book which consists of 6 steps:

1.    Determining your target customer

2.    Identifying underserved customer needs

3.    Defining your value proposition

4.    Specifying your MVP feature set

5.    Creating your MVP prototype

6.    Testing your MVP with customers

 Other Random Tips and Tricks

  • Again and again, I will never get bored of asking startups to focus on the problem before thinking about the solutions. This method helps you identify your target customers’ needs.
  • The Kano Model (shown below) is a great structure that would help you categorize your customer need into 3 main categories: performance, basic, and delight.
  •      It’s highly important to be able to decide on which customer needs offer the most suitable opportunities for you to create customer value. Dan Olsen also has a very useful diagram about that (Importance Vs Satisfaction).