Product Market Fit Is Like The Speed Limit
Product Market Fit Is Like The Speed Limit
Product market fit is not a destination but an ever-changing way to get to your destination.
I’m old enough to remember MapQuest. To me, it was ground-breaking technology. You’d head to your computer, wait for the dial-up internet connection to finish its series of whirs and pops, then you’d enter a starting address and a destination address. MapQuest would then design the most optimal route for you and include some satellite imagery of the path. It would also include turn-by-turn instructions, and this is where the fun began. You’d fire up your printer, print the whole thing out, then lay it across your lap or hand it to your buddy during a road trip.
We know how this story ends. Google Maps came along, then the iPhone came along. Printing a map was no longer needed. Services native to the device riding along with you in the car provided a better, more real-time experience. You might think this story is about MapQuest finding (re-finding? The company actually originated in 1967) product market fit and then losing it. But it’s not. This story is about driving directions and estimated arrival times.
I know, it feels a bit like I pulled the rug out from under you. Maybe one day, I’ll write about MapQuest, but today I want to focus on the concept of product market fit, and how it’s easy to misinterpret it as your destination. Let’s get back to map software and navigation.
When you’re using Google Maps or any other navigation service, you expect two main things:
The driving directions from your starting point to your destination
The estimated arrival time (or at least the estimated drive time)
Those two inputs power the output of arriving at your destination. When building products, we too often focus on the outputs and not the inputs. Product market fit, for example, is an output. But it is also an input. The problem with the way we tend to focus on product market fit is that we focus on it as if it is ONLY the output.
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Returning to the maps and navigation analogy, product market fit is more akin to the yet another input in the equation that I have not mentioned yet—the speed limit. If the estimated arrival time is an input to the eventual arrival, what are the inputs to the estimated arrival time? The inputs are speed limits along the way and the distance to the destination. The distance is static. However, just like product market fit, the speed limits are dynamic. They are ever changing. Not paying attention to the speed limits along the way can drastically change the outcome of your journey.
When taking a long road trip, you may notice that when traveling exactly at the speed limit your estimated arrival time tracks the same from beginning to end. When you travel slightly above the speed limit (this is not an endorsement for speeding!), your estimated arrival time slowly decreases the longer you do this. And, of course, the opposite is true. If you are traveling slower than the speed limit, the estimated time of arrival increases over time.
Finding product market fit is like reaching the ideal speed to make sure you arrive at your destination when expected. But product market fit is not static. It is not the distance traveled. It is the speed limit. Along the way, the market can change, competitors can arrive on the scene, employees can come and go, and every decision you make as a product manager can have an impact on the state of the company’s product market fit.
Marc Andreessen, co-founder of a16z and co-founder of Netscape, popularized the concept behind product market fit in 2007 when he said:
In a great market—a market with lots of real potential customers—the market pulls product out of the startup.
The market needs to be fulfilled and the market will be fulfilled, by the first viable product that comes along.
The product doesn’t need to be great; it just has to basically work. And, the market doesn’t care how good the team is, as long as the team can produce that viable product.
In short, customers are knocking down your door to get the product; the main goal is to actually answer the phone and respond to all the emails from people who want to buy.
And when you have a great market, the team is remarkably easy to upgrade on the fly.
This is the story of search keyword advertising, and Internet auctions, and TCP/IP routers.
Conversely, in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter—you’re going to fail.
You’ll break your pick for years trying to find customers who don’t exist for your marvelous product, and your wonderful team will eventually get demoralized and quit, and your startup will die.
This is the story of videoconferencing, and workflow software, and micropayments.
What these opposing situations doesn’t mention is that you can swing between them. Markets change, but so does your product. In a frothy market, your shitty product can find product market fit. But what happens when the market cools off? The product and the market are now bad, and thus there is no fit. What happens when the market remains viable but the product doesn’t adapt to the changing competitive landscape? The market is still good, but the product is no longer a fit. You’ve once again lost product market fit.
This may seem obvious, but it is surprisingly not obvious when put into practice. Too many startup founders and product managers chase the holy grail of product market fit, when in reality, they should be chasing the destination. The destination, of course, is not the product roadmap. In our maps and navigation analogy, the roadmap is not the destination there either. The destination is a vision, and this too can change.
When you have found customers pulling your product out of your hand, it is not time to rest. As a product manager, your job is to understand exactly why that is happening and be prepared for the things that can change it. Are customers pulling the product out of your hands because you were the first to build a solution for their particular problem? Are they pulling because the market is so hot that customers would take literally anything? Are they pulling because you have unseated a competitor that was not doing as strong a job? The only way to get the answers to these questions is to pay attention.
Just like when you’re on a road trip and it seems like each small town you pass through has a different speed limit, each cycle of market conditions and each new competitor and each new feature you release is a change you have to watch for. The way you do this is by paying attention to leading indicators. For each product, the leading indicators of product market fit slippage are going to be different, but they are things you should know innately. If you don’t, return to basics. Figure out what your north star is, and work backwards from there.
If you’re too focused on lagging indicators like revenue, churn, and sign up growth, you can miss the macro view that could help protect you against losing product market fit. This is where I could write an entirely separate article, but I will try to keep it brief and in context here. You are a product manager, not a ticket pusher. If you allow yourself to get consumed by process and tools for execution of deliverables, you will fail to see the changes on the horizon. You will fail to adapt. Your job is not to push things over the finish line. It is to understand the product and the market and the customers. It is to be the product visionary while the CEO is the company visionary.
Do not only look at the speedometer on your road trip. Do not only look at the road directly in front of your car. Look to the horizon. Pay attention to what’s coming.
Watch for those changing speed limits.