The life of any startup can be divided into two parts – before product/market fit and after product/market fit. – Marc Andreessen, Andreessen Horowitz General Partner and Serial Entrepreneur
You were able to make some sales, get a few case studies and learn about the value of your solution — does that mean you have Product-Market fit? Does that mean that if you do more of the same your business will grow?
Unfortunately, your first few sales don’t automatically mean that you have P-M fit. P-M fit has more to do with the way in which you convinced your first few validating customers to sign on rather than with the outcome — the sale.
In the same way that selling dozens of products that never get used is not P-M fit, selling a product that doesn’t move the needle is not real success.
Now, is your business model scalable? Is it repeatable?
If you’re selling to customers in different market segments, the sales and marketing processes will not be repeatable. You will need different sales tactics, different techniques to counter objections, different product features and different assumptions about who the partners and system integrators are in the industry.
- Was I able to consistently add value for customers in a single market segment?
- Did the clients pay after the pilot was over or did they churn (move on)?
- How engaged and satisfied were the clients with the product?
- Did they refer our solution to other prospects?
If you have P-M fit, congratulations, you’re no longer searching for a business model. You were able to create a business.
Take a day off to celebrate, but don’t celebrate too long. There’s still a lot of work to do. You’re only at the Chasm.
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This sampler covers the differences between B2B and Business-to-Customer (B2C) product-market validation, shows you how to define your vision for success, find early adopters, select market opportunities and assess a venture's risk. Download The First 6 Chapters Today »