The 4 stages to product-market fit
A simple guide to help founders cut through the clutter and get to PMF faster
If the only thing that matters is getting to product/market fit (PMF), you better be wicked smart about maximizing your chances of getting there.
The path to PMF is not assured, and the path it’s often winding, but the 4 stages you need to move through to get there — and the key mindsets, activities and graduation criteria required for each stage — are relatively clear if you’re able to cut through all the clutter.
As a three-time founder, I can vouch for the fact that cutting through that clutter is NOT easy: managing focus, pressure, fear, confirmation bias, disagreements with co-founders, and conflicting “expert playbooks” can make your head spin.
But you can dramatically increase your odds of finding PMF by doing three things:
Understand the 4 stages (yes, I’m offering another expert playbook!)
Accurately diagnose which stage you’re in
Keep yourself, and your company, laser-focused on the activities that will get you to the next stage
Here are the 4 stages…
STAGE 1: Seeking Customer/Problem Fit
Mindset
"I'm excited to build the product, but before I go any further I'm going to talk to lots of target customers to confirm that the problem our product will solve is a big one.
In the process, I'm going to become an expert on how customers deal with the problem today andunderstand which types of customers want a solution the most."
Key Activities
Conducting “Problem discovery” interviews
Graduation Criteria
You’ve validated an urgent, underserved problem for a clearly defined customer segment
You deeply understand the customer, the problem, and how customer solve (or don’t solve!) the problem today
What Graduation Feels Like
You consistently see visible pain and frustration from customers when they describe the problem, and the current alternatives, and you now understand the problem so well that you can predict with pretty high confidence what a new prospective customer is going to say when you interview them.
You're more confident in your idea after many conversations with customers, not less.
STAGE 2: Seeking Problem/Proposed Solution Fit
Mindset
“We've clearly validated that there's an urgent problem here, and customers are desperate for a better solution. Now we need to design a solution that we're confident will effectively solve the problem”
Key Activities
Brainstorming solution options
Creating a prototype of your chosen solution(s)
Conducting “Solution discovery” interviews
Signing beta customers
Graduation Criteria
You have designed (not built) an MVP that will solve the problem much better than existing solutions
You have confidence you can build the MVP in a reasonable amount of time
You’re consistently converting prospects who fit your early adopter profile into future customers who want to use the product as soon as it’s ready (and pay you for it)
You’ve signed a meaningful set of beta customers; for B2B, 3-10 “charter customers” (a.k.a. “design partners”), for B2C, ~50 customers
What Graduation Feels Like
Visible excitement — ”pupils dilating” — from potential customers when you demo your solution.
STAGE 3: Seeking Problem/Deployed Solution Fit
Mindset
“We’ve designed a solution customers want and are willing to pay for. We’re also highly confident it will effectively solve the problem based on their feedback. Now we have to build and ship the MVP to prove that it actually solves the problem.”
Key Activities
Refining MVP feature set
Usability testing
Building, testing and deploying the MVP
Staying very close to users as they experience the product
Improving upon the MVP based on learnings
Graduation Criteria
Product is shipped and in the hands of early users
Users are highly engaged and using the product
Retention and customer satisfaction are healthy
Customers are willing to provide references and testimonials
What Graduation Feels Like
The product is far from perfect, but it’s really working. Early customers don’t just like it; they love it,and you know they would be very disappointed if it went away.
STAGE 4: Seeking Product/Market Fit
Mindset
“Now we need to prove we can get lots more customers, in a repeatable and scalable way, and that we can keep those customers as happy as our early customers.”
Key Activities
Testing and finding repeatable, scalable methods for acquiring new customers
Hiring initial sales reps (for B2B)
Continuing to improve the product, including starting to automate tasks that won’t scale well
Graduation Criteria
You have found a repeatable and scalable method for attracting and acquiring customers
You maintain high customer engagement, retention and satisfaction, even as you grow
You have evidence of — or at least clear line of sight to — a profitable business model at scale
What Graduation Feels Like
Acquiring new customers is much easier, and customers are starting to find you organically. You feel like you can comfortably open up the floodgates to new customers, and lots of them.
Product/Market Fit (and expanding it)
Mindset
”Now that we’ve achieved product/market fit, we want to aggressively shift gears and focus on growth; it’s time to step on the gas. Fasten your seatbelts…”
Key Activities
Developing your growth strategy (onto the next playbook 😉!)
Fundraising (typically Series A)
Are you focused on the things that will get you to the next stage?
I love helping founders understand and navigate the path to PMF (while hopefully helping them sleep a bit better at night).
If that’s you, let’s talk
