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Understanding the 4 Post-Launch Fits in the 7 Fits PMF Framework

Updated: Apr 9

Startups often face overwhelming challenges when navigating the complexities of the business world. The key to success is finding the perfect fit between your product and the market. Fortunately, the 7-Fit Framework offers a comprehensive system that helps startups assess their maturity level and identify gaps in their strategy. In this article, we'll explore the importance of the four post-launch fits in the framework and how they can help startup teams create a solid business model.


The Product-Channel Fit: Are You Introducing the Right Product for the Right Channel?


The first fit that startups need to achieve post-launch is the product-channel fit. This fit is all about finding the right channel to distribute your product to the target audience. A channel is a means through which a startup reaches out to potential customers. Examples of channels include social media, email marketing, and paid advertising.











To achieve product-channel fit, startups need to conduct market research to identify the channels that their target audience is most active on. Once a startup has identified the right channels, they can optimize their product messaging and distribution strategies to reach out to their target audience more effectively. To achieve product-channel fit, you'll need to:

  • Identify your target audience: Who are your ideal customers? What are their pain points and needs? Knowing this information will help you determine where to find them.

  • Explore different channels: There are numerous channels you can use to reach your target audience, such as social media, email marketing, and content marketing. Experiment with different channels and track your results to determine which ones work best for your business.

  • Optimize your messaging: Once you've identified the right channels, make sure your messaging speaks directly to your target audience's pain points and needs. This will increase the likelihood that they will take action and engage with your product.


4 post-launch fits towards product-market fit

Most of these activities require prior marketing experience. Marketing a product while developing it might be a hassle especially for technical founding teams. Working with a fractional CMO might be a lifesaver here as this method is cost-effective while it leaves enough room to co-founders for managing the non-marketer team members.


 

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Channel-Model Fit: Is Your Revenue Model Viable for Your Distribution and Customer Acquisition Channels?

The next fit that startups need to achieve post-launch is the channel-model fit. This fit is all about finding the right revenue model that is aligned with the channel used to distribute the product. For instance, if a startup is distributing its product through a subscription-based model, it needs to ensure that the channel used to distribute the product aligns with the subscription-based model. Additionally, startups need to determine the right pricing strategy to use for their product. Startups need to take into account factors such as customer willingness to pay and market competition to arrive at a competitive pricing strategy. To achieve channel-model fit, you'll need to:


  • Identify your revenue streams: How will you make money? Will it be through subscriptions, ads, or a combination of both? Knowing this information will help you determine which business model aligns with your chosen channels.

  • Analyze your channels: Look at the channels you've chosen to reach your target audience and determine which ones are most effective in generating revenue. This will help you decide which business model to pursue.

  • Experiment and iterate: Once you've chosen a business model, continue to experiment and iterate until you find the right fit. Be open to making changes if necessary to ensure your channels and business model are aligned.


When a startup is able to fold its business model to fit the needs of at least one distribution channel, then we say that this startup has achieved channel-model fit.


Most B2C companies have low ARPU (average revenue per user) thus they need to be cautious about their customer acquisition costs (CAC). To be able to reach a sustainable B2C business model, a B2C startup needs to have a balance between the cost of acquiring customers and the revenue they get from those customers.


On the other hand, the very high ARPU businesses (6 to 7 figures) are able to take advantage of very high CAC channels such as enterprise and outbound sales. Those startups have the luxury to spend 5 figure CAC money to acquire giant customers.



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Model-Market Fit: How Well Is Your Model Capturing The Market?

The third fit that startups need to achieve post-launch is the model-market fit. This fit is all about ensuring that the revenue model and target market align with each other. Model Market Fit is the concept that the startup's market (and # of customers within that market) influence the model.


Startups need to ensure that their revenue model is sustainable and that it generates enough revenue to sustain the business. Additionally, startups need to ensure that their target market is willing to pay for their product.


A good practice here is to calculate how much of the market a startup is able to capture along with the average revenue per user and the size of the market. With the help of this calculation, a founding team can understand the annual revenue potential for their startup.



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Product-Market Fit: Time to Grow!

The final fit that startups need to achieve post-launch is the product-market fit. This fit is all about ensuring that the product meets the needs of the target audience. Startups need to ensure that their product solves a significant problem for their target audience and that it delivers value to the customers. Additionally, startups need to ensure that their product is differentiated from the competition. To achieve product-market fit, you'll need to:


  • Listen to your customers: Collect feedback from your customers and use it to improve your product. Ask for their opinions, conduct surveys, and read reviews to better understand their pain points and needs.

  • Iterate and improve: Based on customer feedback, continue to iterate and improve your product until it meets the needs of your chosen market.

  • Focus on retention: Once you've achieved product-market fit, focus on retaining your customers by relevant customer success practices, upsell and cross-sell offerings, annual discounts etc.


One sign to understand if a startup really found product-market fit is to have a look at the annual growth ratio and what percent of this growth is attributable to a single channel.


A business is thought to have achieved product-market fit if it has a double-digit annual growth rate 70% of which comes from a single channel of distribution.


A Quick Recap of the 4 Post-Launch Fits in the 7-Fit Frameworks Towards Product-Market Fit


The four post-launch fits are critical to a startup's success in the market. Startups need to achieve product-channel fit, channel-model fit, model-market fit, and product-market fit to ensure that their product is distributed effectively, generates enough revenue, and meets the needs of the target audience. By achieving these fits, startups can position themselves for growth and success in the competitive startup landscape.


Disclaimer: The inspiration for 4 post-launch fits is Brian Balfour's great article here



 

Trying to Navigate Your Way Through Ambiguity? Understand Where You Are In Your Journey Towards Product-Market Fit


 



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