How to get to Product-Market-Fit for your SaaS?
How to get to product-market-fit? A question on the mind of most #SaaS #founders.
Product-market-fit or PMF is a loosely defined term- There is no industry standard definition, but in simple words- "A LOT of customers need what you are selling at your offering's price point and would be deeply disappointed if you discontinued your product".
Getting to this (PMF) summit of your Seed stage startup can be tricky. As an advisor to many early-stage startups, i've personally observed founders struggle with this. Many are trying to fit a square peg in a round hole- either it's the 'right market wrong product' or a 'good product, wrong market'.
Here are some strategies to help you conquer the ascent towards PMF:
✅ Lay the Foundation right: Define who your ideal customer profile (ICP) is in clear and specific (domain, industry, revenue etc) terms and validate your minimal viable product (MVP) with this customer segment. Iterate aggressively till you have gained sufficient insights and see traction in terms of growth. Also, start with the market NOT the product- What does your market need? Where is the gaping hole that your product could potentially fill? What are the alternatives? What will it take for users to adopt your product?
✅ Know your metrics: Ensure you are collecting and measuring the key metrics such as customer acquisition costs (CAC), conversion rates and adoption/engagement/usage (e.g. no of daily active users), NPS, Referral rate and also switch rates (from competitors). Also track key revenue growth metrics- Market share, Monthly recurring revenue (MRR) or Annual Recurring Revenue (ARR). IMHO, exclude revenue earned through "Affiliated" sources e.g. friends/family/investor introduced/board referrals- While these affiliated sources are helpful to build your initial version of the product, it's not a true driver of PMF.
✅ Refine your secret sauce: Every founder believes that they have the most unique solution in the market & their "secret sauce" is what sets them apart from the competition. Your differentiator aka secret sauce as defined during your MVP stage may get you some early traction, but will NOT help you sustain the market momentum. In a market where there are many players, expect that "fast-followers" will also tout similar capabilities in short order. For you to get to "We ❤️ your product & can't live without it", you will not only need to think about "features" that differentiate you (your unique value proposition USP) but also strategies around how to embed yourself deep into their daily-life to a degree where NOT leveraging your product becomes unproductive/detrimental for them
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