PMF is the Key to Scale

10 Aug

But how do you find it?

We often think that the lack of leads, or lack of a VP of Sales, or a CRO is the ‘magic bullet’ that’s holding us back from seeing runaway success. “If only we could get more leads into the top of the funnel”, is a complaint I often hear. But, it doesn’t matter how many leads you get into the top of the funnel if your product isn’t quite hitting the mark: you’ll never scale. You’ll never see the rocket ship of sales growth until you can get it. For that reason, finding Product Market Fit (PMF) is SO crucial.

How do I know this? Because I’ve experienced Product Market Fit and I’ve experienced Product Market Semi-Fit. The former is like people grabbing the product out of your hands almost without you trying, the latter is a constant struggle to convince people how you think your product is going to revolutionise their lives.

The other thing to note is that PMF isn’t a single destination. It’s not like you find it and forevermore you are bathed in the warm glow of supersonic growth. It’s a bit like how the kitchen your parents put in in the 90s that was the envy of all their friends, today looks horribly dated. It’s a constantly moving target.

Here’s a few pointers if you’re struggling.

Be self-aware (and honest)

It’s easy to convince yourself that you have PMF, especially if you have a few customers saying nice things about you. But here are some signals that you’re not there yet.

High churn - customers aren’t getting value for whatever reason
Low engagement in the actual product - customers aren’t using the product as much as you think they should
Lack of organic growth - customers aren’t telling their peers to buy your product
Proposition is unclear - it’s not totally obvious what you do to your staff and to your customers
Slow sales cycle - people don’t get why they really need this straight away
Staff cynicism - your people are raising doubts about whether the product is hitting the mark
Losing out to the same competitors all the time - someone else is doing a better job at hitting PMF
Customer Support overload - customers aren’t getting it or the product isn’t doing what they expect it to

None of these in themselves would automatically point to a lack of PMF, but if you are seeing a few of them, it probably suggests an issue.

Niche Down

You can’t be all things to all people. As much as the temptation is to spread your net as wide as possible so as not to lose out on potential sales, doing so runs the risk of not connecting properly with the people who really care.

When we started ScreenCloud, our ‘niche’ was people who had never used digital signage before because it was too expensive and cumbersome. Instead of forcing people to use proprietary hardware, our software worked on easy-to-buy consumer hardware like Amazon Fire TV Sticks. The result? Anyone who wanted to put some content on screens but were put off by the expense and faff of the incumbents flocked to us. Our niche was in fact, people who weren’t digital signage customers. To begin with, we didn’t even try to go after the large users of digital signage that were being serviced by the large industry dinosaurs. We were quite happy with the $50/month customers who could self-serve.

Start with an MVP

Niche down on your customer segment, but do the same with your product features. When we launched ScreenCloud it was very basic. We had a future roadmap and a timeline, but we just wanted to get something out there. But this had another valuable benefit: we realised our roadmap priority was wrong because real customers started using it and told us so.

As a specific example, when we launched, customers could only show content on a screen in landscape. We had on the roadmap to introduce a portrait orientation too, but it was way down the list as it felt a bit of an edge-case to us.

But guess what, after launching our MVP we had a load of prospective customers asking us for portrait mode. “Once you have that, we’ll pay for it”. So, of course we prioritzed that feature and suddenly we saw more customers signing up.

What we could have done, of course, is guessed what people wanted from the product and spent another 12 months polishing it, but would we have gotten PMF? Maybe. But it would have been by luck.

And don’t just think of an MVP as something you do when you first launch. You can also launch an MVP of a new feature or adjacent service.

Talk to Customers

The great thing about niching down is that you now have a very defined group of customers who you can (and should) obsess about. If you were once your customer, ie you scratched your own itch by developing your product, then you have a great advantage here, but even then, you need to talk to other customers, too.

If you have Product Market Semi-Fit, you’ll be skirting close to the edge of what they really care about, but not quite nailing it.

There is a lot to say about talking to customers. But the main thing is to get behind what they may tell you. If they say ‘I love your product’, what do they love about it? What does it actually do for them? Them saying they love it is interesting and possibly flattering, but it doesn’t help you. What is the thing that was broken in their world that is now fixed? And is it fully fixed, or does it still have some annoying things that you are perfectly positioned to solve?

One company I know who created an app for busy restaurants to order food, went out with the people who delivered that food. Got up at 4am every morning for two weeks and spent time driving around the city handing over fresh fish to the people he wanted to use his product. What are you doing to really understand your customers?

Positioning

What if you have a great product that customers use and love, but you still struggle to find traction? It could be that you have a positioning problem. It’s not enough for your product to be perfect for people you’ve defined as your Ideal Customer Profile (ICP), if those customers don’t understand that the product solves their particular burning problem.

For us, a lot of our customers in the early days didn’t even know that ‘digital signage’ was a thing. They mostly found us because they were searching for solutions for a specific use case, such as “how do I show my social media on a screen using Google Chromecast?”. So our positioning was much more about what people could do with these consumer devices and screens (using our software) rather than going deep into digital signage as its own discipline. What it meant was that people would ‘get’ right away that our product was for them. If they went to the competition where they would be dazzled by descriptions of expensive enterprise-grade media players and bullet proof screens, they would be confused about how this was relevant to their need to show some Tweets on their lobby TV.

April Dunford, SaaS positioning guru, explains the problem like this:

“You’ve got a cool product, but nobody understands it. You think it’s simple but customers don’t. They compare your products with those that are nothing like it.”

It’s definitely worth checking whether you have a positioning problem if you are lacking PMF.

Data and Testing

You have to be tracking data. You have to be testing and iterating. Even once you’ve found PMF. Some of the leading growth teams in SaaS run 20 to 30 experiments a week! If you’re not testing: placing small bets all of the time, then you’re just guessing what works, what resonates and what doesn’t.

At ScreenCloud I created a cross functional growth team who met up once a week to work out what tests to run to improve the product, the marketing, the user journey.

This stuff isn’t easy, but without it how do you ever get better, unless it’s just a lucky guess?

David Hart