Product/Market Fit is not the Holy Grail

Pierre-Jean HillionPierre-Jean Hillion • 2nd • 2ndSr. Growth Marketer @ RayonSr. Growth Marketer @ Rayon5mo • 5 months ago

Product<>Market fit is not the holy grail.

We often obsess over Product <> Market Fit (PMF), but it’s only one piece of a larger puzzle.

PMF doesn’t guarantee a successful monetization model or channels fitting your unit economics.

The 4-Fits Framework, introduced by Brian Balfour in 2017, gives a more complete view of what a company needs to solve to scale to $100M+ 👇

1️⃣ 𝗠𝗮𝗿𝗸𝗲𝘁 < > 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 𝗙𝗶𝘁
Your product must solve a real problem for a specific market.
Instead of talking about Product<>Market Fit, Brian describes it the other way around: Market first, product then.

○ Identify the needs of your target audience: Research your potential customers’ pain points and behaviors.

○ Hypothesize: Align your product with market needs to solve your audience's problems. Formulate hypotheses around core value propositions, hooks, and retention mechanisms.

○ Validate: Measure engagement and retention rates. Flattening retention curves indicate consistent value delivering, a key Market-Product Fit indicator.

2️⃣ 𝗠𝗼𝗱𝗲𝗹 < > 𝗠𝗮𝗿𝗸𝗲𝘁 𝗙𝗶𝘁
Align your business model with the market’s willingness to pay and size.

○ Understand Economics: Calculate your Average Revenue Per User (ARPU) to ensure it aligns with market willingness to pay.

○ Design Revenue Streams: Develop a pricing strategy that fits market purchasing behavior. This could include subscriptions, freemium, or tiered pricing.

○ Monitor Unit Economics: Track CAC, Payback Period, and LTV to ensure a healthy balance. Aim for a CAC that is recoverable within a reasonable timeframe relative to the LTV.

3️⃣ 𝗖𝗵𝗮𝗻𝗻𝗲𝗹 < > 𝗠𝗼𝗱𝗲𝗹 𝗙𝗶𝘁
Find scalable channels, adapted to your model, to reach your target customers.

○ Identify Channels fitting your model: A high ARPU allows high CAC channels like Events. A low ARPU suggests channels like Social Media or Ads.

○ Optimize Channels Efficiency: Ensure chosen channels provide sustainable CAC. Evaluate the scalability of each channel to handle increasing volumes.

○ Align with your audience behaviors: Different industries use different channels. Go where your audience spends time.

4️⃣ 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 < > 𝗖𝗵𝗮𝗻𝗻𝗲𝗹 𝗙𝗶𝘁
One or two channels generally drive >70% of your Growth (sometimes even more in the early days). Your product should fit important distribution channels.

○ Build Channel-Specific Features: For virality for example, include features like collaboration, a low-friction sign-up flow, and a referral program.

○ Prioritize channels based on your product: Channels should not have to adapt to your product.

○ Ensure a seamless technical integration: Compatibility with platform APIs or having a mobile-responsive flow might be crucial in some cases.

Each of these fits addresses a part of a large Growth Equation. This goes beyond the focus on Product <> Market Fit alone.

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To go deeper, you can find in the comments the full article about the 4 fits framework 💬