My updated playbook to product-market fit

Get from 0 to 100 paying customers.

It’s out! After working with an additional 100 startups, totalling 300+ now, I’ve updated my playbook to product-market fit. I removed noise and added detail based on spots where founders really struggle. Happy reading, curious to hear if it resonates.

What is PM-fit?

First, let’s define what we are aiming to achieve. I love Lenny’s definition of PMF:

A highly desirable product, for which you can find and keep customers sustainably, while making a profit delivering the product at scale.

This step is about the top-right circle.

I unpack Lenny’s definition as such:

1. First, find a urgent problem so your solution is higlhy desirable (cp-fit & ps-fit)

2. Next, make sure you can charge enough money to be profitable (bm-fit)

3. Lastly, make sure you can acquire customers at scale (pm-fit)

As such, you move to the right on the scale - More info

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A Step-by-Step Guide to Achieve PMF

Step 1: Validate beachhead with high customer-problem fit

Customer-problem fit is the foundation of PMF. If no one experiences a problem, you can’t sell your product.

Key question:

• Which customer segment should be your beachhead market?

• Which group of people has the highest problem urgency?

How to find it:

1. List up to 5 potential customer segments that could benefit from your solution

2. Speak to 10 potential customers for each segment

   1. For 5 segments that means 50 interviews, yes. Interview length should be 10-30 minutes, depending on the time you can get from your interviewee.

      1. Problem interview guide by Ash Maurya (Lean Canvas) for inspiration

   2. If 1 in 4 outreach attempts leads to a talk, that means you need to do 200 outreach attempts. Get going, now!

3. Find out how urgent the problem is for every potential customer and reflect on how urgent it is for them using my problem urgency scale.

   1. Urgency level 4 and 5 are great, level 3 is reasonable. Ignore the rest.

4. Count & Conclude: which segment has the most 4s and 5s? That might be your beachhead.

💡 Pro Tip: Don’t do surveys. Why? Do you like receiving one? No. Furthermore, surveys don’t ask follow-up questions. People are always very brief in open-ended questions. In a conversation, you get many more insights.

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Step 2: Validate value generation with problem-solution fit

Your solution should fit the problem of the customer.

Once you’ve identified urgent problems for a particular segment, test if your solution resonates with them. Show them your solution or value proposition.

Key question

• Does your solution solve their problem?

• Does it enable your customer to achieve their Job to be Done?

Steps to validate problem-solution fit:

1. Create a brochure that clearly explains your value proposition by following this step by step guide.

2. Share it with the high-urgency (level 3-4-5) customers of each high potential segment.

   1. Best is face-to-face or over Zoom so you can see their reaction.

3. If positive, propose a pilot using the Startup Pilot Canvas.

   1. Be sure to understand what your customer’s needs are for the pilot, what constitutes success for them?

4. Charge a discounted fee for the pilot to ensure customers have skin in the game.

   1. 50% of 75% discount are simple starting points.

   2. Mention this is a pilot price and later it can change.

5. After running the pilot, interview your customers to understand what delighted them and what didn’t.

   1. Happy customers?

      1. What was value for them? This helps in understanding the true JTBD.

      2. Great, check what aspects this segment has in common.

   2. Unhappy? Update the solution or discard the entire segment if everyone is unhappy.

💡 Pro Tip: Your solution v0.1 can be a downscoped version of your grand vision. Don’t force to sell your Swiss-army knife. Love their problem, not your solution.

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Step 3: Validate profitability with business-model fit

It’s not that complicated. Full video.

Now it’s time to see if your solution is financially sustainable.

Key questions to answer:

• Can you charge enough to cover your costs, including customer acquisition?

• Are customers willing to pay full price for your product?

How to test it:

1. Calculate your unit economics using this calculator.

   1. Can a single sale cover all costs, including marketing and acquisition costs?

      1. If you are doing founder-led sales and are not paying yourself a salary, use the local minimum wage per hour to see how profitable you are.

   2. Increase your price if needed to cover for all costs.

2. Propose the new full price after the pilot is over to your existing pilot customers.

   1. Not everyone will convert. Check closely who converts. Are they from a particular segment? This might help to scope down your beachhead even more.

3. Do 100 outreaches to potential customers to the high potential segment(s) with high-urgency problems.

   1. Don’t automate this yet. You are here to learn what works.

   2. Cold call, cold email, DM on LinkedIn, or asking around.

4. Do a problem interview with the responding prospects, and propose a pilot at a full price at the end of the conversation.

5. After running the pilot, interview your customers to understand what delighted them and what didn’t.

   1. Happy customers?

      1. What is the value you generated?

      2. Does it justify the price they paid?

   2. Unhappy? Update solution or discard entire segment.

💡 Pro Tip: Charging full price can be scary. Yet, that is not a reason to pull it off. You are building a business, not a charity. You will get more comfortable over time.

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Need help with this process? Book a 1-1 mentoring session with me. Learn more about how I work with startups on the link below.

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Step 4: Validate scalability with product-market fit

This step is about the top-right circle.

Right now, if all went smoothly—lol just kidding, it likely didn’t, it will be a bumpy ride. But, your beachhead market segment will be scoped down at least 3 times, probably even more.

Right now you should have about 10 happy customers, of which a few on full price paid. These full-price customers are likely your ideal customers. Now you need to capitalise on that and align your sales process.

Key question

• Can you serve this beachhead segment at scale?

Steps to solidify PMF:

1. From all your happy paid customers, especially full price paid, what do they have common?

   1. We are going to use that to refine your beachhead AGAIN.

   2. What is your final super-specific niche that you can serve?

   3. Why are they buying you?

2. Outline your sales process for the coming months

   1. What are the typical phases in your sales process?

   2. Marketing campaigns for lead gen can also work. Depending on your startup, your acquisition strategy might differ.

   3. Setting up self-serve might come in at this point for certain product categories. Before this, you want to onboard everyone manually for extra learning.

3. Capitalise on this setup of super-specific niche + sales process.

   1. E.g. do 500 - 1000 outreaches to this beachhead. Don’t hire anybody, you do founder-led sales.

   2. Likely, sales should come in more easily now.

4. Three things to keep reflecting on and monitoring

   1. The beachhead segment → Are you depleting, do you need to shift?

      1. At some point, the beachhead might be saturated. There are 5 expansion strategies from your beachhead. Think of this in advance.

   2. The sales process → Are there steps in your process that are conversion killers?

      1. This is why you want to keep track (in a sheet at least, or a CRM).

   3. The product → Keep on doing interviews with customers to get a sense of if you are still providing value.

      1. Update your product if need be, or plan new versions or additional tools if the opportunity is big enough.

💡 Pro Tip: Streamlining these operations can be a bit boring sometimes. Especially technical founders want to focus on product. I get that. But, would you rather ship 10 more features or get 100 customers? Allocate your time accordingly.

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Common pitfalls to product-market fit

1. Scared of down scoping the beachhead: Smaller focus = higher momentum

2. Focusing on vanity metrics: Website visits or social media likes don’t indicate PMF.

3. Over-automating early: Build processes manually first, then automate once they’re proven.

4. Want to learn more? 4 extra pitfalls can be found here.

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