What is Product-Market Fit for a Lean Startup?

Written by Kelly Schreiber
Published on 19 September 2017

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Hi, I'm Kelly, a hiking addict, ramen eater, drummer, vintage furniture lover and holistic wordsmith. I love learning!

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Product-market fit means that the product is well suited to its target market. In other words, there are a lot of real users interested in pay actual money for the product. A startup needs to do rigorous testing during development to achieve this fit. Here are some necessary aspects of product-market fit for a lean startup to consider.

Choosing a market

The ideal market is one with demand for underserved needs. If many well-liked products are available in a market, only the most exceptional new products will succeed. By finding a niche not yet fulfilled, a startup can create a product that will be of real value to its users.

Creating a product

After identifying a potential market, a lean startup creates a minimum viable product (MVP), which is a simple demo or prototype, to begin to evaluate the product-market fit. The business assesses how well this prototype meets the needs of the target market through extensive evaluation with real users. If there is good product-market fit, there will be many potential customers interested in the MVP. If there is little interest, the company alters the product or “pivots” to a different approach.

Modifying the product

A lean startup uses an iterative process of product refinement to achieve the best product-market fit. Features of the product are frequently added during development and tested with real users. The product is continuously changed to meet demands. The market evolves with the product to include more potential customers the first MVP did not attract.

This is the Build-Measure-Learn loop we discussed earlier.

Product-market fit takes a significant effort to achieve, but once reached, the benefits are great. By serving a large number of real customers in a new way, a startup has the potential for considerable profit.

Here are some more resources on how lean startups achieve product-market fit:

Over the last few weeks, we've been exploring more about Lean Startup. You can find out more about Lean and Agile principles and find more resources on the topic page. Stay connected by signing up to our newsletter.

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