What are the biggest mistakes companies make after they find product/market fit? Find out in this week’s Growth Snack: The Breakout Growth Podcast Short with Sean Ellis and Ethan Garr.
It can be hard enough to find product/market fit in the first place, but even companies that do achieve this milestone often fail to build sustainable growth. So in this discussion, we tackle two key reasons why companies tend to stumble at this juncture. But more importantly, we talk about the strategies successful teams employ to avoid these errors and thrive.
Product/market fit isn’t a gate that you pass through and then leave behind as you move on to growth. It’s the foundation on which you build and operationalize your business. So jump in with us and find out how to stay focused on what really matters at a crucial time in your organization’s journey to breakout growth success.
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We discussed:
- Two common mistakes for companies with product/market fit (00:36)
- How teams can focus on learnings to avoid mistake #1 (01:52)
- Why teams get this wrong (04:24)
- Monitoring product/market fit to stay on track (05:40)
- Product/market fit; not just a startup thing (06:36)
And much, much, more . . .
Transcript:
00:00.00 Sean Ellis
If You’re leading growth building a startup or looking to ladder up your skills then you’re probably really Busy. So every other week tune in to growth snacks the breakout growth podcast short where Ethan gar and I share one key growth learning to help you on your journey to break out growth. Success. It’s boo for thought for anyone hungry for growth.
00:19.50 Ethan Garr
Um, all right Sean product/market fit you’ve long evangelized the importance of reaching this milestone where enough people in a market find value in your product to really springboard and into that next level that growth. But what are some of the typical mistakes startups make once they’ve achieved product/market fit.
00:35.50 Sean Ellis
Yeah, there there are lots of mistakes Obviously but I think the one thing we can agree on pretty pretty widely. These days is that product/market fit is is super important and fortunately startups have really embraced that and they understand it. So.
00:48.77 Ethan Garr
Um, yeah.
00:51.47 Sean Ellis
I would say the challenge the biggest challenge they do have or the biggest mistake they make is that once they’ve validated product/market fit in yeah, maybe maybe maybe correctly or incorrectly validated but once they think they have product/market fit they jump straight into growth and start really doing everything they can to grow the business and. That’s actually ah I think ah a pretty important mistake and so what they should do is actually make sure they really understand that product/market fit. So if they can really understand the product/market fit then they can leverage it to drive sustainable growth. So that’s the first mistake is that they just jump straight into growth.
01:17.70 Ethan Garr
Um huh
01:29.42 Sean Ellis
And then another key mistake is that they continue to or they fail to continue to to monitor and tighten product/market fit over time.
01:36.86 Ethan Garr
Yeah I think we always talk about companies. You know they can’t succeed if they don’t find product/market fit. But even once you find it it. There are some challenges that lay ahead and I think we should probably really dive into that first mistake. How would you go about? yeah making sure that you really do understand your product/market fit.
01:52.13 Sean Ellis
Yeah, so I’ve spent a long time thinking about this, you know, ultimately after 2 long-term growth roles I decided this was the area I was going to focus on on that on that transition to growth and so I spent a lot of years where exclusively I was focus on this.
02:11.30 Sean Ellis
And that’s where I came up with a few survey questions that helped me really uncover it and for a long time I kept those to myself and then over time I decided to just put those out there and kind of blog about them and and help other people use them as well. And so the main 1 main question that everything else hangs off of is is one that. Most people have probably seen out there these days they don’t always tie it back to me but it it was a question that I came up with back when I was at Dropbox and it’s how would you feel if you could no longer use this product and so what I’m trying to find are the people who have ah an intensity of need for that product and so.
02:48.74 Sean Ellis
I’m saying okay who who are the people who would who would be very disappointed if they could no longer use this product and studying those people gives me a ton of insight into how effective the product is at meeting their needs. Why it meets their needs and so there’s another 7 questions on. That survey that I probably so used to be on survey io now it’s on http://pmfsurvey.com so product/market fitsurvey pmf survey dot com and that essentially gives you a list of questions to help you really understand now that you know, ah. Who would be very disappointed if they no longer could use your product you start to figure out why so what is the primary benefit that they get from it. That’s one of the questions. How did they discover your product so that gives you insights into how you can reach them what what would they use if your product were no longer available gives you insights into the next best. Alternative that’s out there and so you start to get the idea that all of these questions help you hone in on those must have users and really understand them. Of course if you can tie in quantitative data as well. So so your analytics data in to really understand okay, who is engaged long term. What what are the referring sources that those highly engaged customers are coming from that that helps you get even more context it. But but ultimately what your goal is is to reach the right people have them experience the product in the right way and so that’s going to require a lot of experimentation in.
04:06.30 Ethan Garr
Um, sure.
04:23.59 Sean Ellis
Ah, getting them to use the product in the right way.
04:23.63 Ethan Garr
Yeah, this is something you cover extensively in go practice and I found that really useful, really like the first place I really dove into this though was that robokiller we use that question really to guide our whole. Um, you know our whole approach to when are we ready to grow. How are we going to grow. Really helped us and you know you were you were there to coach us and and kind of help us make get through those challenges. But why don’t more teams embrace this. Why don’t they do this.
04:50.98 Sean Ellis
Yeah, so I I do think they actually more people are using it like you initially did at Robo Killller where they are using it to hone in and find product/market fit. Um, but I think they don’t know what to do next and so again, they go into just just trying to grow and so.
05:00.89 Ethan Garr
Right.
05:10.64 Sean Ellis
Most of it is just that that people don’t have a lot of experience in this stage if you if you do it effectively. You probably have stock options that lock you into the company for another 4 years and and at that point you’ve you’ve gotten pretty rusty and and forgotten how to do it and so. Um I spent a lot of time just with with very short vesting cycles working with a number of companies in this stage and and that’s where I documented a process and that’s that’s where some of these things that I’m saying today are coming from.
05:40.18 Ethan Garr
So what about the other mistake that you mentioned failing to monitor and tighten a company failing to monitor and tighten their product/market fit over time.
05:47.63 Sean Ellis
Yeah, so I think that’s that’s ah, an easy but mistake that people make is that they just they think of product/market fit as like a one and done once we once we’ve got there. We move on. But if you really think about it. Markets are super dynamic especially tech markets.
05:55.74 Ethan Garr
Right.
06:05.23
Sean Ellis
Everyone’s trying to innovate and sometimes that innovation really solves the problem in a better way and so super important to just figure out are are people leaving for other reasons that you know this is the percentage of people consider your product and must have dropping significantly. Do you have new Target users that maybe you didn’t. Think about in the beginning that are using it in a different way and experiencing a different benefit and so the more that you can understand who those must have users are the channels to reach them. You can both expand your market and protect your market if you if you start you see you’re losing them.
06:26.89 Ethan Garr
Right.
06:37.54 Ethan Garr
So it’s not just about using that survey like until you find product/market fit and then just thinking looking at retention over time. Maybe it’s really about balancing both of those always using that survey to keep monitoring where you are in the spectrum. So yeah, so I mean this really isn’t just a startup thing right? I mean I can imagine like if blockbuster had.
06:49.27 Sean Ellis
Absolutely.
06:57.52 Ethan Garr
Had done this you know maybe they wouldn’t have gone bankrupt and yeah, it it really it applies really to new product innovation and really established companies as well because I think leveraging Channel Advertising Channel Advantages doesn’t work if you can’t retain those customers right.
06:58.60 Sean Ellis
That.
07:11.92 Sean Ellis
Absolutely absolutely and so that’s probably been one of my biggest surprises in the last couple of years has been that fortune 500 companies large enterprises are recognizing that their process for innovation and their ability to to innovate meaningfully and and successfully. Is is they don’t have a great track record of it but most most companies and so they’re starting to look to startups and and the approach they take and and this approach is super helpful for them.
07:41.94 Ethan Garr
Yeah, it just seems like 1 of those things where it’s only going to be to your advantage even if you know if you’re at a larger company. It may be for a piece of the of the operations or 1 innovation that you’re working on or it could be for the larger enterprise as a whole. But I think it’s it’s just. product/market fit is something that that’s just important to everybody so you know for our next growth snack I’m excited to dive into this further because we’re going to talk about the connection between product/market fit and customer advocacy something you know you and I have really been passionate about. You and I have had some really interesting conversations around that. So um I think it’ll be cool to bring our listeners into that into that discussion in a couple of weeks
08:17.97 Sean Ellis
Yeah that’ll be a really good one. But for now thanks for tuning in to Growth Snack one growth insight to help you power your team’s breakout growth success next week. We’re back with a full episode where we interview a growth leader from another of the world’s fastest growing companies if you’re hungry for growth. Keep tuning in following that we’ll be doing another Growth Snack. You know the following week will do another Growth Snack where we’ll cover the connection between product/market fit and customer advocacy that Ethan just mentioned.
08:46.12 Ethan Garr
Thanks