Follow the river, not the bulldozer — a marketer’s advice on product/market fit
The concept that a startup needs to find product/market fit before it can start to scale (and ultimately be successful) is considered to be almost self-evident these days.
Yet part of what makes getting to PMF such a difficult and elusive concept for is that it is only defined as an observed state — there is no way to define it for a particular product or company in a way that has diagnostic usefulness.
Marc Andreesen’s definition of product/market fit as “being in a good market with a product that can satisfy that market” is almost a syllogism. It’s also basically a rehash of Paul Graham’s “make something people want.”
While it’s correct, it’s not useful by itself for identifying good businesses.
You cannot work backwards from PMF and identify the variables and levers you need to move as an entrepreneur. You can only identify broad-based characteristics and behaviors that (potentially) some have predictive power in the aggregate.
The problem with the lean startup
Eric Ries’ Lean Startup method has built a large following around the concept of a highly systematized, quick iteration process of identifying market problems and developing solutions to get to PMF.
One of the chief complaints with his method is the lack of focus on finding worthy problems to solve. This results in finding local maxima that are insufficient for PMF or worst case, global maxima that peak on top of tiny ant-hill, vs a startup-worthy mountain.
Entrepreneurs looking to build big companies that can grow at the rates that are worthy of VC investment need to pick a big enough market — period. “No market need” is the number one reason why startups fail.
Picking a bad market is one of the primary drivers of this; the other side is picking a bad solution. Solving for the first problem is a much easier exercise than the second.
Identifying a worthy solution to a worthy problem — whether by skill or by chance — is the most important thing for a startup’s success.
While the lean startup method is a major step in the right direction for many companies in helping them identify real problems and to not fall in love with their solution, it doesn’t help them think through how to identify what that good solution actually looks like.
And this is where a marketer’s sensibility about customer behavior comes into play.
Chesterton’s Fence
One of the most useful heuristics I’ve come across is the concept of thinking about the problem space (e.g. the market) as one of a complex, foreign, natural landscape.
The quirks, oddities, crevices, and idiosyncrasies of that landscape are often endemic to the nature of the system and simultaneously mysterious and foreign to outsiders.
When entrepreneurs are trying to understand the problem space, they often come across some sort of barrier — typically some sub-optimal user behavior or market inefficiency — that if addressed, will blow open a market.
This is the functional equivalent of finding an apparent fence in the middle of bridge crossing a river that blocks one’s path.
A rough application of lean startup principles may lead to a “eureka” moment where the entrepreneur decides to take down that fence and break through to the other side.
More often than not, in unfamiliar landscapes, these are Chesterton Fences — a construct derived from the British writer GK Chesterton who wrote:
“In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.”
An in fact — there is often a good reason for this fence. That irrational user behavior or apparent dysfunctional market may have hidden forces behind it.
That the most important thing in identifying solutions to worthy problems is understanding why a problem space has the shape that it does, and until you fully understand all the dynamics at play, you don’t have a solution.
Think like a marketer
Unlike a company searching for PMF and looking to develop new solutions, a marketer accepts the product dynamic as-is, and instead seeks to reshape the mind of a prospect and ultimately the market. The terraforming that occurs is not in insisting that a prospect or market segment derive value from a solution, but rather in following the contours of how they think, how they act, and present the product as a better way of doing the job.
If this sounds a lot like jobs-to-be-done theory — that’s because it essentially is. In fact, there’s a significant amount of overlap (as you might expect) between building a product to solve a job and marketing that product.
This process that is typically undertaken in thinking about marketing an existing product can be applied to understanding the dynamics of a startup problem space
Here’s a quick 2-part test to determine if you fully understand the dynamics of a problem space:
- Can you explain the overall problem and all actors in the system in a way that does NOT paint any of them as irrational? E.g. without resorting to cliches or dismissals like “marketers are lazy” or “users don’t want to click buttons”
- Can you explain this problem from the point of view of your customer — e.g. what would amount to an effective sales pitch for the product — that is different from the pitch for the company
This is a classic marketer’s approach that both respects the customer and their inherent rationality, and seeks to truly understand whether there is an actual solution for a real live customer.
The first test ensures that you understand the system and are not relying on bad stereotypes or hand-waving away real issues.
The second test ensures that you have identified a solution that people want — vs just identifying an interesting market space or problem. This trap is what Dave Bailey calls “solving an industry’s problem.”
It’s easy to parachute in to a problem space and iterate your way to a naive, local maxima solution that is based on a major misread of the landscape of the problem space and mindset of the actors in the system.
It’s much harder to identify a problem worth solving where truly understand why there is an opportunity to do a job done a better way.
If you can do that — you can follow the river of the actual customer problem to find the real solution. Don’t bulldoze a fence until you fully understand the implications.
Matt is the VP of Marketing at SimpleReach and blogs at bringthedata.com
