10 STEPS TO

PRODUCT/MARKET FIT
Hashtag: #leanstartup
ASH MAURYA
@ashmaurya

spark59.com
PracticeTrumpsTheory.com

products

9/10 startups fail

66%
drastically change their
original plans

Not a better Plan A but a path to a

plan that works before running out of
resources.

A plan that works = Product/Market Fit

What

is
Product/Market Fit?

... customers are buying the product just

as fast as you can make it - or usage is
growing just as fast as you can add
servers ...
-Marc Andreessen, The Pmarca Guide to startups

If you have to ask whether you have

Product/Market Fit, the answer is simple:
you dont.
-Eric Ries, The Lean Startup

Getting to Product/Market Fit can

be done systematically.

AGENDA

01 Problem/Solution Fit

02 Early Traction

03 Product/Market Fit

AGENDA

01 Problem/Solution Fit

02 Early Traction

03 Product/Market Fit

AGENDA

01 Problem/Solution Fit

02 Early Traction

03 Product/Market Fit

Do I have a problem worth

solving?

01 Document your Plan A.

Reasonably smart people can rationalize

anything but entrepreneurs are
especially gifted at this.

Business Model versus Business Plan

Business Model versus Business Plan

A document investors make you
write that they dont read

Business Model versus Business Plan

A single diagram of your business

Problem

Solution

Top 3 problems

Top 3 features

Key Metrics
Key activities you
measure

Unique Value
Proposition
Single, clear,
compelling message
that states why you
are different and
worth paying
attention

Unfair Advantage Customer

Segments
Cant be easily
copied or bought

Channels
Path to customers

Cost Structure

Revenue Streams

Customer Acquisition Costs

Distribution Costs
Hosting
People, etc.

Revenue Model
Life Time Value
Revenue
Gross Margin

PRODUCT

Target customers

MARKET

Lean Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com) and is licensed under the Creative Commons
Attribution-Share Alike 3.0 Un-ported License.

Problem

Solution

Unfair
Advantage

Key Metrics

http://runlean.ly/why-lean-canvas

02 Formulate an implementation strategy.

Facebook won on strategy not vision.

03 Hone in on early adopters first.

Problem

Solution

Key Metrics

Cost Structure

Unique Value
Proposition

Unfair
Advantage

Customer
Segments

Channels

Revenue Streams

Your early adopters define the business model

Build an MVP (Minimum Viable Product).

An MVP is the smallest solution that

delivers customer value.
(BONUS: And captures customer value.)

AGENDA

01 Problem/Solution Fit

02 Early Traction

03 Product/Market Fit

AGENDA

01 Problem/Solution Fit

02 Early Traction

03 Product/Market Fit

Have I built something people

want?

In God we trust,
all others bring data.
-W. Edwards Deming

Startups dont starve,

they drown.
-Shawn Carolan, Menlo Ventures

WTF

What you wanted

The reality

04 Establish a standard measure of progress.

Financial accounting

Innovation Accounting

Dave McClures Pirate Metrics

How do users find you?

ACQUISITION

Do users have a great first experience?

ACTIVATION

Do users come back?

RETENTION

How do you make money?

Do users tell others?

REVENUE
REFERRAL

05 Deliver value before growth.

Value Metrics

How do users find you?

ACQUISITION

Do users have a great first experience?

ACTIVATION

Do users come back?

RETENTION

How do you make money?

Do users tell others?

REVENUE
REFERRAL

06 The terrain before Product/Market Fit is riddled

with qualitative learning.

You dont need lots of users to learn.

Just a few good customers.

AGENDA

01 Problem/Solution Fit

02 Early Traction

03 Product/Market Fit

AGENDA

01 Problem/Solution Fit

02 Early Traction

03 Product/Market Fit
How do I scale?

07 Identify your engine of growth.

Growth Metrics

PAID

How do users find you?

Do users have a great first experience?

STICKY

Do users come back?

How do you make money?

VIRAL

Do users tell others?

ACQUISITION
ACTIVATION
RETENTION
REVENUE
REFERRAL

A startup can focus on only one metric.

So you have to decide what that is and
ignore the rest.
-Noah Kagan

Whats stopping your business

from growing 10X?
-David Skok

08 Measure everything as a cohort.

You cannot step in the

same river twice.
-Heraclitus

Signups

Activation

Paid Conversion

Signups

Activation

Paid Conversion

09 Build a continuous feedback loop with

customers for rapid hypothesis generation.

10 Breakthrough insights are usually hidden

within failed experiments.

A pivot not grounded in learning is a

disguised see what sticks strategy.

There is no such thing as a failed

experiment- only unexpected outcomes.
- Buckminster Fuller

THANKS!
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Ash Maurya | Author, Running Lean | Founder, Spark59 | @ashmaurya

Life is too short to build something nobody wants