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10 Steps to Getting Your Software to "PMF" (Product/Market Fit)

Glenn Gow

Jul. 20, 2007


Marc Andreesen writes about startups in his blog, but his post applies to companies of all sizes. He states that "The only thing that matters is getting to product/market fit (PMF)."

I almost fainted when I saw this, because very few people involved in technology (except maybe Andy Rachleff) have ever publicly acknowledged this.

So HOW does a software company get to a PMF? THAT is the question.

I'm going to assume that the team in place has a decent understanding of the product they want to build. In fact, in most companies, the product is already being built (and sometimes is already built) when the question of "what market will we sell to" comes up.

Given that, how do we find the market that "fits" our product idea? Well, to simplify the process:
  1. Start broadly. Don't eliminate anything in this very early stage, as any market is possible.
  2. Define the problem being solved. What are we really trying to do here? Define this in the words of the CUSTOMER. The customer may or may not realize they have a problem (can you say iPod?), but they do.
  3. Define the problem being solved again. Go deeper. Really get to the root of what you are trying to do. As you know, most companies want to solve too much. Get really deep
  4. Based on the work above, narrow the segments that "appear" to be a good fit. This is a dangerous stage as you are still doing this without research and without hypothesis testing. Narrow the segments just enough, but not too much.
  5. Test the hypotheses. Talk to customers, suppliers, resellers, gurus, influencers, trend-watchers, etc. Don't test your hypotheses in Silicon Valley . Don't test it with your friends. Test it in the real world with research.
  6. Narrow the market segments again. Be careful not to think of segments only as industries. Segments are determined by common attributes that may or may not have anything to do with industries.
  7. Apply a relative weighting to the most promising segments so the input from those segments is appropriately considered vs. segments that are less likely to be a fit.
  8. Begin the MRD process. You are gathering information from potential target markets that are essentially telling you what to build.
  9. This stage is the stage where you want to fail! Test again. This time you can test more deeply. You can test storyboards, product concepts, prototypes, mock-ups, etc. Gather more information from your target segments. You want to get an enormous amount of feedback on what your (weighted) market segments think of all your ideas so you can see what isn't working, and what market segments are not interested in what you are offering. You want to fail now, before you try to sell a finished product!
  10. Narrow the segments, rinse, repeat.
Glenn Gow founded Crimson Consulting Group in 1991. He has consulted on strategic marketing issues for some of the most successful companies in the world including Adobe, BEA, Cisco, HP, IBM, Intel, Microsoft, Oracle, Seagate, Sprint, Sun and Symantec, as well as dozens of emerging companies. Under his leadership, Crimson achieved "Inc. 500" status when Crimson became one of the fastest growing companies in the United States. He can be reached at ggow@crimson-consulting.com





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