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As an entrepreneur, you may think that some of your ideas are pure gold. In these scenarios, it’s easy to jump the gun and start planning your product’s name, marketing campaigns, various features, etc. But before putting in any of this work, there’s a crucial step that needs to be taken: determining whether there’s a need for your product in the first place.
Product-market fit can be tricky, especially for new entrepreneurs who are not used to doing extensive research. But unless you’re willing to waste lots of money, time and your reputation, you should take your product’s market fit seriously. So how can you know that your offering has value? There are two basic components.
Is there a need?
The first thing to determine is whether desire exists for your product. Is there a gap that your particular offering fills, or does it fill the gap better than competitors? The easiest way to know is to start communicating with anyone who you believe fits your target customer. Start with your network, who will be most likely to answer questions and give you their honest opinions. Get as specific as possible with your research.
For example, if your demographic is small, you’ll want to get to know them on a deeper level. Ideally, this will be done through interviews or some kind of direct communication. If the response is lackluster or you’re hearing crickets, it may be time to reconsider whether your offering meets a true need.
Once you’ve gathered that there is indeed a desire for your product, you can assess whether it is an unmet need. If competitors in your industry are offering similar products, it’s important to get clear on what makes yours unique. Look at reviews for similar products (especially poor reviews) and see what your competitors are lacking. Develop an in-depth understanding of what the gap in the market really is. Is it a customer service issue? A particular missing feature? Affordability or access issues?
If you’ve done your research and can see a definite need for your product but you’re still not getting results, it’s time to look deeper at your audience.
Is the target audience correct?
Even if your product is revolutionary and no one in your market is offering such a solution, you can still hit a wall. Oftentimes, this means you are targeting a demographic that either doesn’t need your product or can’t have it. For example, the people you aim to target may not be able to afford the product, or they are not the primary decision-makers in their company or family. It may take some deep digging to uncover these little incongruences, but once you do, you can tweak your offering or direct it toward an audience that is ready for it.
Use a funnel marketing approach to whittle down your possibilities. For example, list every aspect of your demographic that is unclear, such as age, gender, income level, career, relationship status, personal ambitions, etc. As you market your product, take note of who is responding strongly and start directing your message more toward those individuals.
In addition, look back on your exact value proposition and what makes your product stand out. Ask yourself, “Who exactly would value this?” If you thought your demographic was simply parents, for example, you may find that parents who homeschool are much more likely to latch onto your offering for a certain reason. It may seem like splitting hairs, but as you keep tweaking your marketing and observing the results, your true niche demographic will reveal itself.
Time to pivot?
If you’ve gone through these steps thoroughly and still can’t seem to scale your business, you may want to pivot. For many new entrepreneurs, this news feels like failure. However, some of the most successful startups pivoted in the early stages of development, like YouTube and Yelp. Here are a few tell-tale signs that it’s time to consider pivoting:
- Only certain aspects of your offering are a hit. In this case, customers may be raving about that one feature, but don’t really care for the product as a whole. In this case, your focus must be redirected toward what’s working.
- It didn’t strike a nerve. Sometimes, you just don’t know your audience until they surprise you. Your product may not be life-changing enough, and thus they can take it or leave it. How can you find their true pain point?
- You’ve lost passion. Sometimes a startup can stray from its own intentions, causing founders to lose faith and fall into people pleasing. While it’s important to serve your audience, it’s just as critical for startups to maintain their identity in the process.
In the early stages of product development (and especially during a pivot) it’s normal for founders to feel anxious and doubtful. But if you believe in what you’re doing and you see it through, your customer-base will gradually grow.