PYROS Deep Dive: Product-Market Fit

How do you know you're on the path towards Product-Market fit?

We'll explore what Product-Market fit is, how companies know they've achieved it, and some early signals in beta or pre-launch through what we're calling 'Problem-Solution Fit'

Transcript

1. problem-solution fit
   
   
   regan davis
   BUILD | deep dive #4
   PYROS
   
   
   

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2. regan davis
   product leader from chicago, il
   BACKGROUND
   Sr. Director of Product @ SpotHero
   
   
   EIR @ 1871
   
   
   Advisor, Coach
   
   
   regandavis.com
   VP of Product @ Jellyvision
   
   
   VP of Product @ info.com
   

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3. product market fit
   regandavis.com
   

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4. regandavis.com
   organic growth
   • ‘K-score’ or Virality — people
   sharing your product
   themselves
   (credit: Lean Analytics, Yousef Benjamin)
   

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5. regandavis.com
   “I think the right initial metric is
   
   
   ‘do any users love our product
   so much they spontaneously
   tell other people to use it?’
   —Sam Altman, CEO @ OpenAI
   

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6. regandavis.com
   retention
   • plot the % of active users
   over time
   
   
   • look for a
   fl
   attening curve
   (credit: Lenny Rachitsky)
   

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7. regandavis.com
   disappointment
   if you left
   Survey Question:
   
   
   • “How would you feel if you could
   no longer use [Product]?”
   (credit: Superhuman Product Market Fit survey)
   

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8. regandavis.com
   “For enterprise businesses,
   
   
   at the end of your free trial,
   
   
   you should pull the trial.
   
   
   If the customer doesn’t
   scream… if they aren’t
   desperate, you don’t have PMF.”
   —Andy Rachleff, CEO @ Wealthfront
   

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9. regandavis.com
   cost-efficient
   growth
   • ‘Burn rate’
   
   
   • CAC < LTV
   (credit: Lenny Rachitsky)
   

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10. (credit: Lenny Rachitsky) regandavis.com
    

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11. regandavis.com
    irrational
    behavior
    (credit: Lenny Rachitsky)
    • Users using your product in ways you don’t expect.
    
    
    • Harnessing strange behavior patterns.
    

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12. marc randolph
    co-founder, Netflix
    regandavis.com
    upending the business
    model
    finding fit by
    

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13. regandavis.com
    January March May July September November
    DVD Sales
    DVD Rentals
    (credit: “It’ll Never Work”, by Marc Randolph)
    

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14. regandavis.com
    it takes time
    While others…
    
    
    • Net
    fl
    ix: 1.5 years
    
    
    • Segment: 1.5 years
    
    
    • Airbnb: 2 years
    
    
    • PagerDuty: 2 years
    
    
    • Superhuman: 3 years
    
    
    • Amplitude: 4 years
    Some found product-
    market
    fi
    t immediately.
    (credit: Lenny Rachitsky)
    

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15. problem solution fit
    regandavis.com
    

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16. regandavis.com
    visible excitement
    

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17. regandavis.com
    visible
    excitement
    • “Where have you been all my life?”
    
    
    • “I wish I had thought of this.”
    
    
    • Genuine smiles, eyes widening as they use the
    demo
    

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18. regandavis.com
    take my money
    

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19. regandavis.com
    willingness to pay
    • If you can get people to put down money before
    you have a product
    
    
    • If they willingly give you references to contact
    (social payment)
    
    
    • If they give you testimonials to use
    (credit: Ash Maurya - Running Lean)
    

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20. regandavis.com
    using it while broken
    

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21. dan schmidt
    CEO, DoubleLoop
    regandavis.com
    creating a slack
    community
    testing problem-solution fit by
    

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23. • Self-selected early adopters and high likelihood to
    have PM-Fit
    
    
    • You can directly interact and probe on feature
    requests async (and bonus - engineers hear from
    customers)
    
    
    • You have a relationship to test for willingness-to-pay
    without a sales team.
    why build a
    community?
    

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24. what to ask
    regandavis.com
    

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25. talk to people
    
    
    

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26. regandavis.com
    (credit: Lenny Rachitsky, Matt Gallivan)
    talk to 6-12 active users
    • Walk me through the last time you did X [where X is some
    essential function of your product].
    
    
    • For each key decision you made along the way, tell me a bit
    about why you made those decisions.
    
    
    • What are the different products you use to do X? What are the
    best and worst parts of using those products?
    
    
    • The last time you did X using this product, why did you use it
    instead of something else?
    
    
    • Why did you try this product in the
    fi
    rst place? What were you
    hoping it would do for you? How well has it delivered on that
    hope?
    

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27. regandavis.com
    (credit: Lenny Rachitsky, Matt Gallivan)
    listen for…
    genuine enthusiasm
    recognition of explicit, superior
    value compared to alternatives
    

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28. regandavis.com
    (credit: Lenny Rachitsky, Matt Gallivan)
    DON’T ASK
    what features do you want?
    

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29. ready for
    launch
    regandavis.com
    

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30. regandavis.com
    PYROS Launch requirements
    

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31. regandavis.com
    example pitch deck
    

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32. regandavis.com
    

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33. regandavis.com
    

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34. questions?
    NEXT STEPS
    regandavis.com/speaker
    
    
    regandavis.com/feedback
    
    
    @regan on slack
    regandavis.com
    download
    
    
    feedback
    
    
    contact
    

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