How product-market fit impacts startup strategy

When advising founders and product leaders I always try to keep in mind how mature their business is from a product-market fit perspective, because many situations should be approached very differently depending on this maturity. Acting like a scale-up (i.e., a company that has found product-market fit) when your product is yet to home in on an ideal audience can stop companies from ever achieving product-market fit.

If your business has not yet found product-market fit, your primary goal is to find it. During this phase:

After product-market fit has been found, companies need to scale their product into the market they’re targeting. During this phase:

To effectively make decisions, founders and product leaders need to be aware of which of these two mindsets they should be employing. This is especially important when taking advice from consultants and resources like books and blogs — most advice you is only relevant either before or after product-market fit is found. Applying feedback intended for mature businesses to your small-and-scrappy startup can be a real distraction, while applying feedback intended for businesses still searching for product-market fit to a scale up can lead to an unstructured, chaotic environment. For example, many early stage companies agonise over things like technical debt and employer brand when, as important as these things will soon be, they are currently an unnecessary distraction.

14 February, 2022

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