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THE PRODUCT MARKET FIT CYCLE

Carlos Eduardo Espinal @cee

A QUICK JARGON BUSTER...

What

is Product / Market Fit

What

is Positioning?

What

is an MVP? and an MVS?

What

are Pirate Metrics?

What

is a Go 2 Market Strategy?

@cee

PRODUCT MARKET FIT

When

it is not happening:

Poor conversions, no word of mouth, slow usage growth, long sales cycle, and high
churn
When

it is happening:

The customers are buying the product just as fast as you can make it or usage is
growing just as fast as you can add more servers. - Marc Andreessen

@cee

POSITIONING
What

is Positioning? - It is how you

differentiate yourself in the mind of your
prospect.

What

is RePositioning? - It is how you

adjust perceptions about you and/or about
your competitors.

..And... Its

not just about a positioning

statement

@cee

POSITIONING
Avis We Try

@cee

Harder

Positioned around customer service & experience

vs. car count or availability which Hertz led

Re-Positioned the leader as not caring about you

Success = In 1 year, Avis went from -$3.2 million

to +$1.2 million for the first time in 13 years.

MVP & THE LEAN STARTUP

Build

a good enough product that fits

the minimum criteria to test out your
hypothesis

Measure
Learn

interactions with the product

from the results and generate

new ideas

@cee

MINIMUM VIABLE SEGMENT (MVS*)

Building

an MVP for a small segment

(vs. the whole market):
Allows

for better differentiation with

out-group competing products

Allows

for easier referrals in-group

Allows

for efficient capital use in

reaching your market

@cee

* Defined by Michael J. Skok (Northbridge Ventures)

PIRATE METRICS* - AARRR

@cee

*As defined by Dave McClure

GO 2 MARKET
Includes

key partnerships and key

distribution channels to reach your MVS

Includes

pricing strategies, sales

strategies, and marketing methods
(internet marketing, direct marketing,
PR, etc)

Note: Make

sure to include cost

assumptions

@cee

RESUMING THE BROADCAST...

What

has been going wrong?

What

is the solution?

@cee

HACKERS ARE REALLY GOOD AT

BUILDING
It

is human nature to focus on what you

are good at not on what you suck at
and...

Most

Founders are hackers and love

building
so....

@cee

FOUNDERS CAN SOMETIMES:

Get

stuck at the MVP stage

Build

and Measure quickly but not

necessarily be Learning

Not

find Product Market Fit fast enough

(before the money runs out)

@cee

THE DIAGNOSIS

The

identification of a specific Minimum Viable Segment

The

definition of a clear positioning strategy that shapes their MVP

The

testing of a complimentary go 2 market strategy

@cee

DEFINE THE TARGET

Minimum Viable Segment

You cannot be
everything
to everybody
so pick something
for someone

@cee

DEFINE THE BULLET

The

Positioning Strategy = The Shell

The

MVP = The Projectile

The

Go 2 Market Strategy = The Powder

@cee

The Product Market

Fit Cycle

@cee

SCALING PRODUCT MARKET FIT

Find

Product Market Fit THEN Scale

Otherwise

= Inefficient Scaling

Shouldnt

optimize around growth

(growth hacking) until you have found
product/market fit
Sean Elliss Growth Stage Pyramid

@cee

THE PRODUCT MARKET FIT CYCLE

SUMMARY
Identify

a MVS

Design

your Companys Bullet Positioning, MVP, & Go2Market

Test

& Measure w/ Pirate Metrics

Iterate

Bullet

Rinse

@cee

on MVS or one variable within

& Repeat or Pivot

THE SEEDCAMP LEARNING PROGRAM

New

Companies go through each part

of the cycle with mentors starting now
& cover the basics of cycle in first week

Our

Program is designed around the

Product Market Fit Cycle

Annual

Program focuses on each aspect

of the cycle but in depth

@cee