In today’s episode of The Startup Chat, Steli and Hiten talk about product/market fit of popular products.
Product/Market Fit is a common concept that is used a lot in the startup world. According to Marc Andreessen “Product/market fit means being in a good market with a product that can satisfy that market.” Understanding this concept is hugely important because when your users understand and use your product enough to recognize it’s value, it is a huge win for your startup.
In this week’s episode, Steli and Hiten talk about what product/market fit means, what Hiten's new show is all about, where to check out the new show and much more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:35 Why this topic was chosen.
02:00 What Hiten's new show is all about.
03:03 One thing that gets Hiten really excited about the new show.
04:57 Steli’s reaction to the new show.
05:05 Where to check out the new show.
06:11 One interesting thing about the research that was done for the show.
07:29 The second interesting thing about the research that was done for the show.
08:26 The importance of differentiating your product.
3 Key Points:
If someone is using a document app for less than a year, that company doesn't have product/market fit.You need to figure out what you need to do to get product/market fit.People don’t get invested until they’re like a year into the product.
Steli Efti: Hey everybody. This is Steli Efti.
Hiten Shah: And this is Hiten Shah. Today on the Startup Chat we're going to talk about product market fit. And the reason we're going to talk about it is because I'm doing a video show. So the first time I'm on video on a show. There's like eight episodes of seeing me talk with my friend Patrick about basically product market fit of popular products. What we did is we took this sort of now very popular question, and a whole bunch of other questions, and asked people these questions about certain popular products, including Netflix and Evernote, and a bunch of others. The website is at producttradeoffs.com and you'll be able to sign up via email and you'll get every episode. Now that I got that out of the way, Steli, it's really fascinating. This is something I've been wanting to do for a very long time, since I had first learned about the magic question that Sean Ellis, who is one of the people who coined the term growth hacker, he is the one and popularized the whole idea of growth hacking and all of that. He has this question and he uses this question to help companies like Dropbox and Xobni and Eventbrite and a bunch of other companies when he was sort of interim VP of marketing at those companies. And the question here is how disappointed would you be if this product no longer existed? And it's a multiple choice question. It's very disappointed, somewhat disappointed, not disappointed at all, are the three options. He'd asked this question of the customers that use a product. And his idea is that if a company has 40% or greater respondents saying they'd be very disappointed if the product no longer existing, the company essentially has product market fit. It's just something he came up with, and this was like back in 2009 that he actually shared the methodology, and this was after he had helped some of those companies I mentioned. So we just decided to go survey thousands of people for each of the companies. Hundreds in some cases, but usually thousands of people for each of the companies. And did a whole video show, I think it's about 20 minutes roughly each, talking about what we learned. So we learned about why people love and hate Evernote. We learned about why people love and hate Netflix. Not that many people hate Netflix. And the value props around it. We also asked Net Promoter Score for these products. I'm not gonna share any of the stats or any of that stuff,