Design for Product-GTM Fit

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When we design a product for product-market fit, the first thing you build is an MVP, a minimum viable product. You build a fraction of your total vision, a small thing, and you have an idea of who you want to sell it to. But most people talk in terms of product-market fit, and I want to show you that product-market fit is not a simple thing. You have to double-click on it and figure out go-to-market fit. By go to market, I mean you can design products to make them easier to sell, and everything has to be consistent, from messaging and positioning all the way through to how you deliver the product.

Extract the most value: build only your core. When you start development, you could build it all yourself, or you could build the minimum viable product, or even less than that: only the piece that is your core value. Core is the notion that you literally only build what is your exceptional capability. In the Actuality Systems case, Greg had the capability to create a 3D image, but the display itself (the DLP chip) was not his core competency; Texas Instruments had that, and he ended up dependent on them. Find the piece that is genuinely your core.

To develop faster, use what is changing in the world. Crowdsourcing is a great way to build products. When you put up your website, is that your core competency? I doubt it. Use freelance marketplaces for landing pages or basic wireframes at a fraction of the labor cost. And do not build everything if you can avoid it. The world is full of open source, millions of lines of code available to you free. The largest open-source community in the world is around Drupal: over a thousand people contributed to building Drupal 7. There is no way Drupal would be as successful if it were not open source, because nobody could develop all the features required to move at the pace of the web, from integrating with Facebook at one extreme to PayPal at the other, and CRM systems in between.

Startup secret: be your own customer. The really good startups do this over and over. They do not build everything as though the only customer is outside the building. They immediately think about how they could build on themselves. If you have a multi-level product (say a platform your internal engineers use to build your own product on, exactly what we did at DemandWare), you are immediately creating a customer relationship, even an internal one. You are forcing yourself to see whether your own engineers can use your platform, and whether it will work when you expose it to the outside world later. It is obvious, yet very few companies do it. The good ones make it part of their culture: always thinking about how to serve the customer, how the platform can be more open and extensible. If you have a tight core (think Linux), make it open and extensible so other people add the drivers and pieces around it. Greg made open APIs, and once he could interface with standard products, everything changed.

The fit-and-stretch problem. Here is the mistake I see most. People define their MVP, say they have a marketplace (for example, medical), then go out and talk to customers: one over here, one over here, one over there. Which one do you pick? The typical process is to start building features for this one, then that one, then a few for the next. Pretty soon your minimum viable product is a pretty big product with a lot of features, and all you have really done is expand your need for resources, the one thing you do not have. You do not have enough engineers or enough cash; you are trying to conserve them until you reach repeatability.

Do the exact opposite. Look at every one of these customers and ask: what is their need, what is their pain, and can I find one or two of them that line up with exactly the same pain and need? When you do that, two things happen. First, your product does not change as you move to match those needs, so you do not expand its footprint. Second, your road map is completely consistent: the same channels, the same messaging and positioning, the same tactics. Draw those aligned needs on a diagonal, on purpose, because the mistake most people make is to assume a segment must be a neat vertical (SMB versus enterprise, medical versus government, financial versus consumer). Sometimes a segment is completely different: it might be everyone with a specific compliance need, and compliance might cut across pharma and financial services, or anyone who needs to trade derivatives (which is any Fortune 1000 company doing anything internationally). A segment may be unique to your product and may not be neatly defined. That is the bridge from product-market fit to go-to-market fit, and it leads us into value proposition and the minimum viable segment.