The above video is from an earlier talk from a year ago and tends to have a slightly different focus than below.
The term Product/Market Fit was coined by Marc Andreesen back in 2007 and it’s been a key goal for any new product or startup ever since. But like any buzzword, it is often oversimplified and misunderstood.
For the next month I am spending as much time as possible addressing #3:
While each company and product is obviously different, this is a framework covering the universal conditions and patterns that have to hold true to achieve product/market fit. Each layer in the pyramid is a key hypothesis that you need to get right in order to build the next layer and ultimately achieve product/market fit.
1. Target Customer – who are we trying to create value for?
2. Underserved Needs – for that target customer, what are their needs?
3. Value Proposition – your hypotheses about which customer needs your product addresses, how the customer benefits from your product, and how you meet their needs better than other products
4. Feature Set – the functionality that conveys those benefits to the customer
5. User Experience – what the customer interacts with in order receive the benefits
Taken together, the first two layers – target customer and underserved needs – are the market. You don’t control the market – you can choose which customers and needs to target but you can’t change those needs. What you do control are the decisions you make at the next three layers in the pyramid – the product.