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Product-Market Fit Framework

The 7 Fit Framework Towards Product-Market Fit:
The Product Market Fit Framework for Startups

Are you an entrepreneur facing the daunting challenge of finding the right approach for your startup? We understand that the journey can be complex and often uncertain.

 

That's why we've developed the "7 Fit Framework" a revolutionary Product Market Fit framework that is here to guide you through every step of your startup adventure.

Before we dive into the details of the 7 Fit Framework, let us first talk briefly about the Lean Startup; the movement that inspired us both in our own startup journey and in creating the 7 Fit Framework.

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The Fundamentals of the Lean Startup Movement

The Lean Startup, led by Eric Ries, has redefined how startups and businesses approach innovation and development. At its core, the Lean Startup model champions validated learning and agility. It contrasts with traditional models, emphasizing efficiency and feedback-driven development.

Central to the Lean Startup is the Minimum Viable Product (MVP). This basic version of your product or service enables testing and feedback collection from early users with minimal resources, guiding further development.

The Build-Measure-Learn loop is pivotal. Instead of a linear process, it's a continuous cycle: build the MVP, measure its performance through data and feedback, and learn to adapt or pivot. This ongoing process reduces the risk of creating something unwanted.

Validated learning, basing decisions on data rather than intuition, is a core concept. This data can come from various sources, such as user feedback or A/B testing, ensuring informed choices.

The Lean Startup advocates the pivot, altering your strategy or product direction based on insights. It promotes continuous deployment, releasing updates promptly to respond to user needs.

It also nurtures a culture of innovation and experimentation, encouraging teams to take calculated risks and learn from failures.

So as a summary, the Lean Startup revolutionizes entrepreneurship, emphasizing adaptability, data-driven decisions, and rapid iteration. It endorses the MVP, ongoing measurement, and validated learning to navigate today's dynamic business landscape effectively.

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The Problem - Solution Scale

In the world of Lean Startups, the primary focus is on the Problem-Solution scale. The "7 Fit Framework" is designed to tackle this challenge by providing clarity and direction. Let us have a look at the distinct scenarios related to problem and solution awareness:

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Known Problem + Known Solution:

This scenario comes into play when you're enhancing an existing product, and both the problem and solution are well-known. Efficiency is key in this scenario, and it's where traditional companies typically thrive. 

 

When you update an existing product, it corresponds to the area where the problem and solution are known. 

 

For example, "Bmw Releasing a New 3 Series Every 7 Years." Here the methodology is a waterfall, and the main challenge is efficiency. Traditional companies are built for this and are generally good at it.

Known Problem + Unknown Solution:

If you're creating a new product for an existing business model and the problem is known but the solution is a mystery, this requires agility and the ability to make accurate assumptions. 

When you develop a new product for an existing business model, it is the area where the problem is known, but the solution is unknown. "Bmw Creating and Releasing the 4 Series for the First Time."

Here the methodology is agile, and the main challenge is making correct assumptions. Consultancies, agencies, and software engineering departments are built for this, and they are often experts in their field.

Unknown Problem + Unknown Solution:

Perhaps the most formidable challenge is developing a new product with a new business model. This is the startup territory, and the methodology to adopt here is Lean Startup.

Again, if we take BMW as an example, we can think of the time when they launched a product like Drivenow, a car-sharing service.

For the lean startup to work, the founding team or the project team needs to execute customer development, and the challenge is achieving product-market fitThe primary focus is on achieving product-market fit, which is the Holy Grail of startups.

Unknown Problem + Known Solution:

The known unknowns are where you first come up with a product idea and then look for a problem to solve...

Does this sound familiar? :-)

In the world of entrepreneurship, this might be the most common mistake.

It's a bit like searching for a keyhole that fits the key you have.

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What is the relationship between the Lean Startup
and the 7 Fits Product Market Fit Framework?

One of the most common mistakes made in the startup world is overemphasizing the solution instead of the problem. To overcome this issue, Lean Startups are trying to find unknown solutions to unknown problems using an iterative approach which is called the "Build-Measure-Learn Loop".

 

With the "7 Fit Framework", we bring a navigational structure to this iterative approach and help startups locate themselves in their journey towards

Product-Market Fit.

 

Our 7 Fits startup framework places a strong emphasis on understanding and being passionate about the problems customers face because ultimately, people buy solutions to their problems. Product launch comes only after customer value is guaranteed.

This is the reason why we divide the "7 Fit Framework" into two major phases,

"Pre-Launch for Customer Value Creation" and "Post-Launch for Business Value Creation". To achieve Product-Market Fit, a startup needs to go through the

Build-Measure-Learn Loop in each fit of the 7 Fits framework.

 

We also incorporate insights from renowned thought leaders and successful business methodologies i.e. Lean Startup and Design Thinking. These phases are strategically crafted to guide you through every step of your startup journey.

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What is Product Market Fit Framework in the Context of 7 Fits?

We have designed the 7 Fits to help startups assess and understand where they stand in their journey to achieving Product-Market Fit, a critical milestone for any successful business.

The 7 Fits Framework offers a structured approach to help startups navigate the complex path to Product-Market Fit by emphasizing the importance of understanding customer problems and delivering valuable solutions. It also divides the journey into two major Product Market Fit stages: "Pre-Launch for Customer Value Creation" and "Post-Launch for Business Value Creation," with seven key fits to assess along the way.

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Product Market Fit Stages:
Creating Customer Value in the Pre-Launch Phase

In this phase, we help you test and validate your value propositions through problem-solution fit, customer development, and the creation of a minimum viable product (MVP). This is the phase where you lay the foundation for your product's success. The 3 Fits in this phase and some example questions a startup needs to answer in each fit are:

Product Market Fit Framework FIT1: Customer-Problem Fit

  • Is there a real problem?

  • Who has this problem?

  • How are they currently solving this problem?

  • How satistified are they with the current solutions?

Customer problem Fit a.k.a Idea Validation

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Free PMF Booklet: Customer-problem fit aka Idea validation

Product Market Fit Framework FIT2: Problem-Solution Fit

  • How viable is the solution?

  • Is the startup team able to feasibly solve this problem?

  • What are the resources that the startup team has to build this solution?

  • How can the startup team build an MVP (Minimum Viable Product) to test their beta solution?

Product Market Fit Framework FIT3: Customer-Solution Fit 

  • Is the early customer segment happy with the MVP?

  • Is the MVP usable?

  • Are the early customers willing to pay for the MVP?

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Product Market Fit Stages:
Creating Business Value in the Post-Launch Phase

Here, the goal is to achieve product-market fit. It's when the market starts pulling your product instead of you pushing it onto the market. This is where your startup takes off. The 4 Fits in this phase and some example questions a startup needs to answer in each fit are:

Product Market Fit Framework FIT4: Product-Channel Fit

  • What are your distribution and acquisition channels?

  • Is there an acquisition channel that dominates your startup's growth?

  • Is there a distribution channel that dominates your startup's revenues?

Product Market Fit Framework FIT5: Channel-Model Fit

  • What is your startup's ARPU (average revenue per user), CAC (customer acquisition cost), and CLTV (customer lifetime value)?

Product Market Fit Framework FIT6: Model-Market Fit

  • How big is your market?

  • How much of the market do you currently own? 

  • What do you need to increase your market share?

  • How big are your competititors?

Product Market Fit Framework FIT7: Product-Market Fit

  • What is your startup's NPS?

  • What is the % of annual growth?

  • What is your average growth margin?

  • What are your top acquisition and distribution channels?

  • How can you exploit those channels?

7 Fit Examples from Popular Startups

Examples of Pre-Launch Fits in the 7 Fits Product Market Fit Framework

FIT 1: CUSTOMER-PROBLEM FIT

The founder of Zappos went to shoe stores to verify customer-problem fit or desirability by taking photos of their inventories and putting them on a simple, temporary website (shoesite.com). When a sale was made, they would go to a traditional store to buy the shoes. After ensuring it was a good fit, they started working on zappos.com.

Similarly, the founders of Dropbox created a simple explanatory video that demonstrated how Dropbox would work through a fake HTML prototype.

Nothing was built yet. They saw significant demand, and the rest is history.

FIT 2: PROBLEM-SOLUTION FIT

Spotify understood that to validate problem-solution fit or feasibility, users had to feel like the songs were on their hard drives to compete with Napster. This meant prioritizing and achieving a 250 ms latency in their MVP.

FIT 3: CUSTOMER-SOLUTION FIT

Airbnb's founders personally visited the first hosts in New York to verify customer-solution fit or usability. They stayed with them, observed them firsthand, and helped them write descriptions, professionally photograph their places, set prices, and list their places online while identifying and optimizing pain points. And as you know, the rest is history.

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PROBLEM-SOLUTION FIT
Pocket-sized guide for

early-stage startup teams

Examples of Post-Launch Fits in the 7 Fits Product-Market Fit Framework

FIT 4: PRODUCT-CHANNEL FIT

Pinterest achieved early product-channel fit by focusing on effective design bloggers for growth and optimizing for the needs of the designer community's privilege, visibility, and self-expression through word of mouth marketing, exclusive invitations, and referrals.

 

FIT 5: CHANNEL-MODEL FIT

Zynga achieved early channel-model fit by partnering with Facebook and relying on revenue models based on Facebook Credits while benefiting from marketing support in exchange for channel exclusivity.

FIT 6: MODEL-MARKET FIT

When BMW entered the car-sharing market through ShareNow (formerly DriveNow), they adopted a pay-per-mile revenue model, which was entirely different from the traditional car ownership market's premium upfront payment model.

FIT 7: PRODUCT-MARKET FIT

Slack's founder, Stewart Butterfield, made two failed attempts to develop a social game. However, he realized that the social sharing features they developed for these games addressed a significant unmet need of a large user segment at the time.

Therefore, they pivoted the first one into the pioneering photo-sharing service, Flickr, and the second one into Slack. These actions made both Flickr and Slack good examples of product-market fit while making him the richest and most successful game developer of all time.


What is Product-Market Fit Analysis in the Context of 7 Fits?

We see Product-Market Fit (PMF) analysis in the context of the 7 Fit Framework as assessing and evaluating how well your startup or business has achieved alignment between its product and the target market's needs and demands.

 

To perform a Product-Market Fit analysis within 7 Fits Framework, try our 7 Fits AI to locate your startup in the road towards Product-Market Fit.

 

You can also look for some signs in your business to apply a Product-Market Fit analysis, yourself. For this, you would typically follow these steps:

1. Start with the problem: What is the fundamental customer problem that your startup is trying to solve? Who has this problem? Are they willing to pay you to have that problem solved?
 

2. Assess Customer Feedback and Validation: When you have an MVP, gather and analyze customer feedback, data, and insights to assess how well your product or solution meets the identified problem or need. This may involve surveys, interviews, usage data, and other forms of feedback collection.

3. Measure Product Market F Metrics: Determine key performance indicators (KPIs) or metrics that align with your fit stage and analyze whether you're meeting them. For each Product Market Fit stage, you would need to track different metrics.

4. Iterate and Pivot as Necessary: Based on your analysis, make informed decisions about whether you need to iterate, pivot, or adjust your product, solution, or business strategy. The goal is to enhance alignment with customer needs and market demand.

5. Progress Through the 7 Fits: The 7 Fit Framework divides your journey into two major product market fit stages: "Pre-Launch for Customer Value Creation" and "Post-Launch for Business Value Creation." At each stage, you should aim to move closer to Product-Market Fit, addressing different aspects of your business model, customer segments, and value propositions.

6. Repeat the Analysis: Periodically revisit your PMF analysis as your startup evolves. The path to Product-Market Fit is not always linear, and ongoing assessment is essential.

In essence, the Product-Market Fit analysis within the 7 Fit Framework helps startups systematically gauge their progress toward achieving a strong fit between their offerings and the market they serve. By understanding where your startup is in terms of the 7 Fits and continually refining your approach based on data and feedback, you can increase the likelihood of building a successful, customer-centric business.

 

Trying to understand your startup's maturity level in terms of Product-Market Fit?

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The Wrap-Up
The 7 Fit Framework Towards Product-Market Fit: 
The Product Market Fit Framework for Startups

The road to Product-Market Fit passes through a Build-Measure-Learn Loop in each fit of the 7 Fits Framework. In the pre-launch phase, discovering the early-customers, testing the MVP, gathering feedback, and iterating according to the feedback are the required kind of actions. The post-launch phase requires a more costly approach ie. testing the waters in different distribution channels, experimenting with different pricing models, and spending marketing money to test acquisition campaigns. The ultimate goal of this iterative approach is to carry a startup to a phase where the business is ready to scale.

 

Some startups tend to pass one of the pre-launch fits and prematurely launch their products. When that happens, the startup begins to experience problems with one or more of the post-launch fits. To solve the problem, the team usually turns to practical components of the business whereas the main issue lies in the fundamentals like the problem and the customer.

We are aiming to help startups find their way in the ocean of ambiguity. We learned first hand that many founders are looking for advice when they feel like they got lost. They seek assistance from mentors and their advisory board, but frequently, they are unable to locate the answer they are looking for.

We designed the 7 Fits Product Market Fit Framework to help startup teams in many ways, some of them being;

  • Spotting their issues using the 7 Fits

  • Finding the main causes of the issues using the theoretical approach behind the 7 Fits Framework

  • Proposing methods to assess the situation from an external perspective using the best practices in the field of Lean Startups

 

If you are looking for answers to help grow your startup, let's chat!

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FREE eBOOK
MVP 101:
Examples of Minimum Viable Products from Renowned Startups

MVP 101 - Examples of Minimum Viable Products: Free eBook by 7 Fits Product Market Fit Framework
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