How to Find Product-Market Fit [Guide]: From 0 to 100 customers
Practical guide to find product-market fit for early stage founders
👋 Hello and welcome to the 7th edition:
“How to Find Product-Market Fit: From 0 to 100 customers”
In the early stage of a startup, founders and marketers need to build momentum, find an audience, and turn them into happy customers.
I am writing this resource to help every business owner who is looking to:
Find their first batch of happy clients.
Secure and prove product-market fit (PMF).
How can I write about this?
In 2020, I went from 0 to $50K in 6 months. (Freelancer)
In 2021, we went from 0 to $100,000 in 3 months. (Agency)
In 2022, we reached 7 figures with our service business.
In the past 5 years, I’ve helped over 100 businesses in their quest to find product-market fit. I’m also advising Fortune 500 companies for their new product launches.
Here’s what you will learn in this edition:
What is product-market fit? And how does it feel?
The ‘not so secret sauce’ to build momentum
The 3-part formula to find and prove PMF
How to execute and find the formula in 4 steps
Ready?
But first, quick question…
1. What is product-market fit? And how does it feel?
Now that I answered the second question with one meme, I will move on to the first one:
What is product-market fit?
Here’s a simple definition of PMF:
You are solving a problem with a solution people buy, love, and recommend.
So it’s a mix of 3 elements:
You solve a painful problem in a given market
People are buying your solution
They are happy customers
Let me deep dive into the 3 elements by commenting on 3 Y Combinator quotes:
Everything starts from the Market
“Founders often hold too tightly onto solutions and too loosely onto problems. The problem, i.e. the market, is the real opportunity.” The real product-market fit Y Combinator
You need to find the right market problem to create a successful startup. Entrepreneurs turn painful problems into opportunities. That’s their role in society. Businesses are their vehicles for this purpose.
🦣 To go back to the basis of entrepreneurship - imagine your target market as a small prehistoric village. 100 people set up camp in a small area near a lake.
People get hungry → Entrepreneurs organize a squad to find food
People need housing → Entrepreneurs find materials and build houses
In 2023, it’s the same system but with much more complex problems. Because the economic system is more complex and interconnected.
So the first criterion of PMF is: your solution solves a market problem.
People are buying (with money) your solution
“Make Something People Want”
🧠 When people want something, they go through an internal assessment process, often subconsciously. They compare the value of what you are promising with the price attached. This assessment is contextual (it depends on their situation, pains, and location).
Bottle of water in a supermarket → $1 OK
Bottle of water in the desert after 10kms → $10K OK
The internal assessment is simple:
Perceived Value vs. Price
Perceived Value > Price → “Ok I buy now”
Perceived Value = Price → “Ok I buy later, maybe”
Perceived Value < Price → “No thanks”
So the second criterion of PMF is: a significant amount of people give you money for something they want (your solution).
People become HAPPY customers
Sam Altman, CEO of OpenAI and former president of Y Combinator, characterizes product/market fit by having enough users that “love your product so much they spontaneously tell other people to use it.”
🙁 If your customers are not happy and regret working with you; you don’t have a product-market fit yet. It is impossible to scale a company with unhappy customers; the foundations are not solid enough.
The good news is that you can fix that by improving 3 factors:
The value you deliver → Improve your offer
How you deliver the value → Improve your processes
How fast you deliver the value → Improve your processes
(Remember, “value” means solving a problem here)
So the third criterion of PMF is: people love your solution (and some recommend it to their peers).
Once you understand the components of PMF, you can start building;
2. The ‘not-so-secret sauce’ to build momentum
You cannot find product-market fit without creating momentum.
Momentum - "The quantity of motion of a moving body, measured as a product of its mass and velocity.”
In other words, it’s how fast your startup moves forward.
To create momentum you need to :
Launch fast
Make fast decisions
Execute a lot of actions
Meet as many people as you can
Rare Image of 2 co-founders on their way to product-market fit:
Especially in the first 90 days, you have to commit a lot of effort. This includes sales, interviews, meeting people, social media, calls, etc. It’s tiring. That’s why a lot of entrepreneurs get burned out.
Most founders I meet underestimate the quantity of actions you need to execute in a short period of time. Drastically. They shoot 10 messages per week, do 5 calls per week, and send 1 newsletter a month. The truth is that they should at least put in 10 times their efforts.
On a more personal note, I struggled a lot as a founder with rule 2 “Make fast decisions”. I tend to overthink and take time to make decisions. Hopefully, I am a disciplined and hard worker so the 1, 3 and 4 compensated the 2. But now, I know that making fast decisions is critical.
In my previous edition, I called it “The Reign of Velocity”
After analyzing hundreds of startups, I identified 3 momentum accelerators.
A hungry market
A hungry founder
A hungry innovation
Those will push the startup forward.
If you don’t have any of those 3, the growth will be slow and PMF will be long to find.
This analysis doesn’t apply to deep tech startups that have a long R&D cycle before entering the market (or maybe it does but I’m not qualified to say so).
But what I know is that: A not-so-painful problem, with a chill founder, and a standard solution will not build a unicorn.
Rare image of a founder after sending 7 emails in 1 day:
3. The 3-part formula to find and prove PMF
Now let’s get pragmatic at a marketing level.
To find your product-market fit, you need to answer 3 questions:
Who buys from you?
Where/How do they buy?
Why do they buy from you?
This will give you 3 key components:
Who → The audience
Where → The channel
Why → The message
Those 3 components, put together, will give you a combination:
Audience x Channel x Message
B2B SAAS Founders x Linkedin x Secure your data
There are multiple possible combinations. And the good news is you can make $1M with the right combination (and the right offer).
You should NOT try to theoretically answer to this formula. Well, you could, but that would be a conversation between you and yourself.
Instead, you SHOULD list assumptions with the most probable hypotheses based on research. And then, test your hypotheses on the market.
Rare image of a founder who knows everything about his market:
💡 Here is how to formulate a hypothesis:
Based on my research, (audience name) needs my solution to fix (problem);
They spend time on (channel);
They are interested in (message 1), (message 2), and (message 3).
You should list at least 10 hypotheses like this one.
Then, you can start executing.
4. How to execute and find the formula in 4 steps
Once you’ve listed 10 hypotheses based on research, it’s time to test them with humility.
I will guide you with a 4-step process on how to test 1 hypothesis. You should run multiple hypotheses at the same time, but I will explain only 1 for simplicity.
Let’s say the hypothesis we want to test here is:
Based on my research, B2B SAAS Founders need my solution to secure their data. They spend time on Linkedin. They want to secure their customers’ data, respect GDPR, and get insights on their data.
Here’s the process I will go through to test the hypothesis:
Build my experimentation plan
Produce my marketing assets
Launch and optimize
Analyze and iterate
1. Build my experimentation plan (2 hours)
Here I create a roadmap of what is going to happen and I list all the key elements of the experimentation. I answer a list of questions and add them to a document.
Who is the audience? → B2B SAAS Founder
What is the channel? → Linkedin ads
What are the messages? → securing their customers’ data, respecting GDPR, and getting insights on their data.
What is the objective → Get them on a discovery call
What is the CTA? → Book a free 30-min Audit
What is the funnel? → A/B Test a landing page and an in-app form
What are the dates? → Run this from 15 September to 30 September
💡 I like to add a simple funnel like this one in the experimentation plan:
2. Produce my marketing assets (12 hours)
Once the plan is crystal clear, I will create the assets listed in the funnel. In that case, it would be:
Copywriting, and design of 3 ads
Copywriting, and design of 3 landing pages
Automation between the pages and the Zoom invite
A tracking system for attribution
The process of creating should be as follows:
Strategy → Copywriting → Design → Integration → Automation → Tracking → Test
3. Launch and optimize (run for 15 days)
After creating the assets and testing the funnel, I will launch the campaigns.
After the launch, I will monitor the campaign every day:
Check the standard metrics (CPM, CTR, CPL)
Analyze what message performs the best
Make sure the funnel is functioning
Ask for feedback from the sales team about the demo quality
Based on this monitoring I will modify the campaigns ONLY if there is a problem. Otherwise, I will make them run the full 15 days to get leanings and insights.
4. Analyze and iterate (4 hours)
At the end of the testing period (often 15-30 days), I will analyze the following elements:
North Star metric → qualified demos
Cost metric → Cost per qualified demos (CQL)
Best message → Best CQL among the 3 messages
Best audience → useful if testing multiple audiences
A/B Test assessment → Compare the results between the landing page and lead gen form based on the CQL
Funnel assessment → Compare the funnel with other funnels on Linkedin based on the CQL
Channel assessment → Compare LinkedIn with other channels based on the CQL
→ Based on those 7 aspects, I will give a score to this experiment and asses if it’s a good method to acquire customers:
❌ If not, I will stop the funnel and write it in my backlog (to remember).
✅ If yes, I will iterate and relaunch the funnel to test more.
That’s the exact process I use to test a hypothesis and find the 3-part formula.
Alright, that’s the end of this 7th edition
How to Find Product-Market Fit [Guide]: From 0 to 100 customers
Thank you for reading. (I feel socially accepted by my peers, which is the 3rd level on the Maslow Pyramid)
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What's the key to balancing speed and precision in the pursuit of product-market fit?
The article emphasizes launching fast, making quick decisions, and executing numerous actions to build momentum. How can entrepreneurs strike a balance between rapid execution and ensuring the quality of their product-market fit strategies?