The American dream of having your own company and becoming the next Steve Jobs, Apple.inc Co-founder, or Elon Musk, SpaceX Co-founder, have always been in the minds of most of us. Nonetheless, according to Bloomberg, 8 out of 10 entrepreneurs fail in the first 18 months, which means 80 %!
Another key thing to remember, if you are entrepreneur-to-be, I would say, at least try to avoid this mistake. That will increase your chances of becoming one out of the 20 % who continue.
Having PMF, which is the Product-Market Fit, is a core reason for many to become one of those who exceed the 18 months period. Have you ever heard about it? PMF concept was first introduced by, Andy Rachleff, co-founder of Benchmark Capital and CEO of Wealthfront Inc. Andy says that the lack of the market is the first killer for any startup. When a great team meets a great market, magic happens. It seems that talking about the PMF in the startups’ scene is being involved in the day-to-day conversations among most founders.
Having said that, what is PMF in the first place?
Let me quote Marc Anderson who first defined it as:
“being in a good market with a product that can satisfy that market.”
With this in mind, it’s obviously crystal clear for founders how PMF is vital. To put it in another way, no one will invest in a product that you and your team only use! In fact, many startups fail, or just burn out all the cash they have before reaching out the tipping point. They just focus on marketing activities and forget the goals of the current stage. Marketing is a core function in the startup’s early stage but just to help you find the PMF rather than branding.
In light of what had been said, startups could use many strategies to help in reaching the PM fit by doing research. For starters, market research is a great way to validate the problem being solved in numbers, without any biased feeling, or getting trapped in admiring your startup.
Entrepreneurs don’t need to be experts to know how to do that. All they need to know is how to learn fast. Bringing a group of customers and observing them while using your product will make you feel like it’s the first time to see your product, but this time, through your users’ eyes!
As much as the idea might seem easy, but most startups don’t do that. Maybe, it’s just because of the ego or being stuck in the day-to-day work. Founders should consistently ask their users about what they love, and try to know their users’ persona.
- Making A/B Testing
After trying all the previous tactics, it’s preferable to make an A/B testing. A/B testing is making two experiments with changing one variation within each test, then observe what data will show at the end.
Finally, try always to fail fast, because time is not always on your side. And remember that PMF beats everything!