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Product / Market Fit

Product/Market Fit means owing the product that satisfies the market. In other words, owing the desired product. There are 5 stages that any Startup needs to go through:

  1. Empathy
  2. Stickiness
  3. Virality
  4. Revenue
  5. Scale

Sure, the majority of start-ups are ignoring this and trying to move into Custom Software Development Services immediately. But to override startups who are in the 99.7% zone you can scale your product only in the last 2 stages.

Lets deep into every stage of your future product lifecycle:
  • Empathy I’ve found a real need in an attainable market. My product satisfied the market. What is more, I know how to solve the problem to adopt users and make them pay.
  • Stickiness I’ve developed the product that makes users be after it.
  • Virality My user database is growing organically and in vitro.
  • Revenue My viable business can grow in a healthy ecosystem with the right margins.
  • Scale Now I can think about the exit with comfortable terms for me.

According to Steve Blank, the first three stages are the most important part for startups. He calls them “Customer Development”.

Probably, you have heard successful techniques and patterns such as:

  • Funnels
  • A/B Testing
  • SMM & Referral Optimisation

etc. All of them are about optimisation and not innovation. That’s the main reason why we are not suggesting to work on scaling. You need to:

  • Connect analytics
  • Review customers behaviour
  • Try new approaches.

In this case, your startup will have success. Like some we are highlighting in

You are Launched Blog

User’s Dividing of any Product

There is no matter what type of product you are working on. All users (or customers) will be grouped based on their characteristics and behaviour to your “problem-solving solution”. What is more, they will behave to your updates and changes that are led by new technologies. All startup customers can be divided into 5 groups:

  • Innovators
  • Early Adopters
  • Early Majority
  • Late Majority
  • Laggards

Innovators (2.5%) - Customers who are willing to try innovations. As a rule, Innovators:

  • Can take risks of defects/bugs
  • Can have high financial lucidity
  • Are youthful
  • Related to the highest social class
  • Are keen to innovations
  • Keen to related resources
  • Are in good contact with other innovators

These users are the key for any product launching, as they are tolerant to a system that can fail from time to time.

Early Adopters (13.5%) - Current group has the highest degree of opinion leadership among any other. As a rule, they:

  • Are younger than Early Majority
  • Have strong financial lucidity
  • Have advanced education
  • They have quite high social status
  • Have more valuable social impact than Early Majority

They are more selective in adopting choices than Innovators. Realising that their choice influences central communication position in society.

Early Majority (34%) - Customers/Users in this group adopting after a varying degree of time. The adoption time is much longer than for Early Adopters or Innovators. They are generally slower in the adoption process. So, you would need to spend more time and resources to get them. The social status of the Early Majority is above average. They are in contact with Early Adopters and could be opinion leaders in society.

Late Majority (34%) - Once you will get half of your market, Late Majority will start joining your product. They will react to your idea/app with a lot of skepticism even after half of the market is covered. The current group has below average social status. Also, they are in contact with Laggards and Early Majority. They have very little financial lucidity and don’t have leadership opinion.

Laggards (16%) - Customers in this group are the last in innovation adoption. They almost don’t have opinion leadership (or don’t have at all). Feeling antipathy to changes and innovations and are advanced in the age. As a rule, they:

  • Are focused on traditions
  • Have the lowest financial fluidity
  • Have the lowest social status
  • Are the oldest among the audience
  • Are in contact with family and close friends
And now, let’s put all them into Product Adoption Life-Cycle Chart:
If to clean it up, the chart would look like this:

Unfortunately, such a chart is an “ideal life-cycle model”. In real life, there is a huge gap between the Majority and the first 2 groups. It is also known as “Chasm” . That’s the main point of scaling. And that’s one of the main issues why startups are not able to scale. As a rule, they are trying to provide a solution for the Majority at the very beginning of their path. But they have no funds (fuel) to pivot and cover them all. To jump over this chasm, your startup needs to Identify Visionaries and Pragmatists. In this case, you would be able to:

  • Figure out different marketing strategies
  • Positioning of your startup/product
  • Targeting audience
  • Distribution channels
  • Pricing and much more.

Agile for Startups?

The majority of all development firms position themselves are Agile. They are working with "Tickets", "Backlogs", "Sprints", and much more. It works well for Medium Businesses but not for Startups. Launchers are sure that Agile is the least required methodology for startups. Unfortunately, it has an incomplete management method. The tight work with The Lean Startup allows for meeting the Startup world and its demand. Here is how the majority of well-known methodologies intersect with each other. Moreover, it answers the question, of where popular technologies and startups are.

The Lean Startup

The Lean Startup Methodology allows to:

  • Drive own startup
  • Sort out when to pivot
  • How to operate
  • When to maintain
  • How to grow startup to a business with the best acceleration

The Lean Startup means usage of scientific approach in startup management and development. It allows to launch the desired product to your customers asap.

The major part of all startups is launching ideas that THEY think users/customers want to have. But that’s not the worst point. The biggest mistake is spending years polishing out the product without launch. As a rule, once the product is polished out, they fail. Because they never talked to their own users. They don’t know what customers are interested in and what they think about their “problem solver”.

The Lean Startup methodology cuts the Agile approach from the very beginning. It says, that every product or app that startup is working on is just an experiment that allows answering such questions as:

  • “Should I build such a product?”
  • “Is there a demand on the market?”
  • “Would I be able to build a business around this product?”

So, the experiment/startup itself is not a theory, it is a clumsy first product. If even such product is successful, you can start with such campaigns as:

  • Sorting out Early Adopters
  • Adding employees to each iteration or any next experiment
  • Start building a robust product

The main goal is once Robust Product is launched, it will have already friendly customers. Such experiments would allow to specify what exactly needs to be in a Robust product.

The essential behaviour of any startup is being able to transform its own idea into a product. Alongside with this, they need to:

  • Measure customer responses
  • Review responses
  • Pivot with a feature/function or keep it

That's why the Build-Measure-Learn loop is the core of the Lean Startup Methodology:

  • Sorting out potential customers problem to solve
  • Launching own Custom MVP to be able to start measuring asap
  • Review users/customers behaviour and feedbacks

Once your Custom MVP App is launched, your startup can work on updating and polishing it. All these should include metrics to learn and, what is more, they will show you cause and effect questions.

Hockey Stick

As a rule, Startup’s life-cycle visualised on the chart as Hockey Stick. It describes all expenses and profits during all product life-cycle. Once the product gets to the market the profit can cover R&D (Research and Development) expenses. Analysing product life on the market, you should forcast returns on their investment. That is what Product Lifespans means. The classic chart is called Hockey Stick and it looks like this:

Unfortunately, Startups Hockey Stick looks like this in real life:

Besides User’s Dividing, startups' life-cycle has 4 particular stages, such as:

  1. R&D
  2. Ascent
  3. Maturity
  4. Decline

R&D (Research & Development). During this time startup:

  • Hires engineers
  • Registers intellectual property
  • Works on MVP
  • Pivoting updates

During this stage, any startup needs to take risks and invest in innovation.

Ascent Phase. This stage takes a time slot from invention/innovation to the investment return. The main aim of this period is to see a "jump". The jump is a boosted growth from innovation up to a strong competitive advantage of a new and effective digital product.

Maturity Phase. Once your innovation becomes well known by the majority of the targeting audience. Now, competitors enter the market and the offer outpace demand. During this period, investment return slows down as the idea concept becomes standardised.

Decline Phase. It is the final stage. The potential value and utility are changed with manufacturing & updating. Product sales start to dive down.

Keep your attention to where the Startup place is. After this stage, a startup can’t be called a Startup - it becomes a company. That’s why IPO is made for startups after rapid growth. In case you are want to know more about the investment in a startup’s life-cycle, check the chart below:

What’s next?

Now, you know how to launch the Idea and you are ready to move to Idea Validation Stage. Here you need to research your market and niche. There are plenty of websites that can create template-based apps. Once your idea is validated, we can move to the Custom Design Stage and Custom MVP App Development Stage.

Go to Design Stage

Relevant Tips & Tricks

We have sorted out the most common topics and issues that startups face at this stage and are pleased to share them with you.

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mistakes to avoid

Check our top 10 startup mistakes to avoid to have more chances to succeed.

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