Dan Olsen, Author of The Lean Product Playbook, shares his five phase approach to finding product market fit, and how to differentiate your product from competitors.
The term “product-Market fit” was first coined by venture capitalist, Marc Andreesen in 2017. Ultimately, the success of any product is predicated on finding product-market fit.
Every product team wants to find it, but there hasn’t been a lot of definition about what it is or how you know if you’ve reached it. Dan shares a simple and actionable framework and process for finding product-market fit and measuring it.
He describes product-market fit in terms of a five-layer pyramid that includes the following:
- Target customer
- Unmet need
- Value proposition
- Feature set
- User experience
The five layers build on each other. Dan’s process for finding product-market fit starts with a target customer (the bottom of the pyramid) and builds up to the user experience (the top of the pyramid).
He recommends conducting qualitative research with individual users at the beginning of the process and quantitative user research that considers aggregate product usage data once you’ve reached the top of the pyramid.
I asked Dan how product managers can apply his process in competitive markets. He emphasizes the importance of solving needs that aren’t already met by competitors.
Dan adds that differentiation is primarily a matter of prioritization. You can stand out in a competitive market by prioritizing needs that are of high importance to your users but aren’t already being met by your competitors.
You’ll learn a lot from this episode about user research, discovering opportunities and measuring success.
Here are the highlights:
- Dan’s approach to finding product-market fit (5:33)
- Dan explains the best techniques for conducting user research (11:15)
- How product managers can find product-market fit in competitive markets (15:30)
- Dan discusses the best KPIs for measuring product-market fit (20:43)