That’s a question people often ask when building a new business, and trying to find it call feel weird yet it can make or break your business.

A universally accepted definition of “product/market fit” is hard to come by, but in short, it means you’ve found a good balance of marketing your offer to your dream customer and knowing how you can help solve problems.

Product-market fit is a concept that was created by Marc Andreessen in 2007, a well-known investor and entrepreneur. Product-market fit is described as finding the right market for your product. It’s hard to build a successful business without product-market fit. We’re going to talk about what product-market fit means, how you can find it and how to maintain it.

If You're Not Getting Any Customers, You've Got A Problem

Product-market fit basically means that you’ve identified and are serving a specific customer segment and problem with a solution that is likely to be highly valuable to them.

When you have product-market fit, all sorts of things tend to fall into line. Word of mouth kicks in since customers are naturally promoting the things they love.

Your sales process becomes easier because deals close themselves and revenue growth is self-sustaining. You don’t need to push, it just happens.

Product-market fit doesn’t just magically appear – it takes time, effort, and clarity of your offer – but you don’t have to guess if you have it or not.

There are signs that will tell you whether or not you have achieved product-market fit, so keep these things in mind while you’re starting out:

Word of mouth isn’t spreading: If people aren’t talking about your product or service after purchase, then there’s something wrong.

If people aren’t telling their friends about what they bought from you after using it, then something is missing from the value proposition.

Deals aren’t closing: If people are interested in what you have to offer but can never make the decision to

How to Figure Out What People Want BEFORE You Create a Product

How To Find The Perfect Market For Your Business

1. Identify your Dream Customer

At the core of who your Dream Customer should be is a description of who your ideal user is, along with the problems they are trying to solve or the goals they are trying to accomplish.

As you begin to identify the Dream Customer who can benefit most from your product or service, it’s important to remember that you’ll probably end up with more than one.

Maybe not immediately, but within a few months or years of your startup’s launch, you’ll have customers at different stages of their journey toward using and buying what you offer.

You might even find that members of a single target audience have different needs and wants — and therefore represent different Dream Customers — depending on which stage they find themselves in.

Segmentation is one of the most important steps in the buyer persona development process because it allows you to understand each of your segments at a detailed level, so that you can create messages that speak directly to each group.

Once you’ve identified all of these segments, then you can start to describe which segment(s) you want to focus on and why. You also want to identify which attributes are most important for users in each segment.

These attributes will help you define your ideal user based on what matters most for each segment.

2. Talk to Real Dream Customers

Put yourself in the shoes of your Cream Customer. What would they like to change about their world? What problems do they want to solve? What are some of their biggest frustrations?

You need to talk to your target buyer persona, your Dream Customers. You can’t sell what you don’t understand and many business owners are unwilling to put themselves in their customers shoes.

Get a large enough data sample to provide meaningful feedback. Consider, too, that face-to-face conversations will often generate feedback that online surveys will not. Focus on the questions you need answers to the most and prioritize accordingly.

3. Focus on Your Offer Value

Value propositions are the statements that describe what a company offers to its customers. They are also called "unique selling propositions" (USPs) and should be as unique as possible.

A clear value proposition means that when customers are about to buy something, they will choose you over all the other options out there.

Value propositions are one of the most important parts of any business' marketing strategy since they determine whether or not a customer will buy a product or service.

A good value proposition convinces customers to choose one product over another, so it's often the first interaction with a potential customer.

A bad value proposition can make customers walk away, even if they liked what you had to offer.

4. Focus on one Dream Customer to start

The best way to build a brand that stands the test of time is to start with a specific Dream Customer in mind and focus on them. At first, that might seem counterintuitive.

Why not try to sell to as many people as possible?

The reality is, the broader you cast your net, the harder it becomes to keep it from tangling. You’re likely to end up serving no one well.

In fact, if you try to appeal to too many people, you’re just going to annoy everyone.

Instead, focus on a single niche or vertical.

This approach is known as "Jobs-to-be-Done" Theory, and it's something you can use in your own business idea.

Instead of trying to find customers for your product, think about what problems your customers are already trying to solve.

Then create a new product or service to solve those problems better than anything currently on the market.

5. Establish Brand Trust and Credibility

One of the most difficult things to do when establishing a brand new business is to convince others that you're credible.

People don't know you, and they don't know what to think about your product or service. You have to prove yourself in order to gain their trust.

But how can you prove your credibility?

How do you earn people's trust?

One of the best ways is by telling a narrative. Your story — how you came up with your idea and why it's important — goes a long way in building trust and credibility with your audience.

When other people understand why you do what you do, they’re more likely to trust that you're doing it for the right reasons.

And if they trust that you're doing it for the right reasons, then they'll be more likely to buy from you.

Develop a Path to Your Dream Customer

Ultimately, what we want is to inform our Dream Customers – and to do it without being too technical.

To answer the question of “how do you find product-market fit?”, it’s important to know that product-market fit is a continuum rather than a yes or no question.

There are certain key metrics and indicators that will show you how well your product is connecting to your Dream Customers.

And, when you connect with them you have achieved product-market fit. It will look similar to this: your unique value proposition is solving problems for customers, and you are achieving positive growth in your user base.

As business owners, we always strive to make our products and services better, so it’s crucial to seek feedback from your customers constantly and consistently using measurable data.

Part of the value of using data to run your business is to make sure you’re using data that fits your goals and informs your decisions.

Use data to guide changes in your marketing strategy—not just on a one-time basis, but ongoing.

If you need help…

Schedule a strategy session with Brand You to see how we can help you bring your Digital Strategy to life in your business.