I recently chronicled the 5 Reasons Your Company is Not Growing Faster, of which product-market fit was one of the top reasons. My last blog, the Top Reasons Product-Market Fit Fails, Part 1 covered a few of the most common reasons companies find a disconnect with their target market that hinders rapid growth. This blog is Part 2 of the series and goes into even more reasons why products can miss the mark. More common pitfalls include:
The Customer-shy Product Team
Another reason that companies miss Product-Market fit is because some product marketing and product teams are too reluctant to talk to a lot of customers. I have seen this throughout my career: smart, knowledgeable, hard-working product teams assume they already know what customers want, and come up with product plans by themselves, in a conference room, with very little or no external customer input. They treat it like more like a math problem that needs to be analyzed, dissected, discussed internally and then reviewed by executives for approval. These product plans created in a customer-free vacuum almost always fail.
One thing I have learned in my career is don’t trust your own judgment when it comes to product roadmaps. You might think you have the right answer, but ultimately it is not your opinion that matters, but that of your target market. Get customer and prospect input early on key issues, and then involve them throughout the process as it evolves. Make sure it’s a large number of customers as well as you don’t want to just focus on one or two customers since they all have slightly different needs.
Talking to the Wrong Level
Also make sure you are talking to the right level of customer. Users and admins for your product will give you very different feedback than the senior execs who are writing the checks. Understand both sets of needs because they are both important. Senior execs are much tougher to get to, but ultimately they might determine your success of failure in the account. If so, make sure their needs get a high priority.
I was at an HR company where most of our product input came from Regional User Groups, consisting largely of product administrators and power users. It was a very engaged group of customers, but their product feedback was tactical and specific to their needs as users and admins (not surprising.) We then created a Customer Advisory Board of senior VP’s that were the executive sponsors of our solution. They acknowledged the needs of the users and admins, but steered us in a much more strategic direction that would ultimately add more value to their business, and consequently accelerate our revenue. Understand who the key drivers are for your product and make sure their needs get top priority.
The One-Way Customer Meeting
A common pitfall I have seen product teams fall into many times is when a product team meets with a customer or a set of customers to discuss future product priorities or roadmap initiatives, and it becomes a one-way conversation with the product team doing all the talking.
I have been on both the vendor and the customer side of many of these discussions, often in Customer Advisory Boards (CAB). Most often you have very slick presentations from product people in heavy sell-mode. As the customer, it is tough to just shut them down and say, “No we are not interested” in what is being presented. Sometimes the customers are not sure, so they don’t want to sound negative. Especially when this vendor put them on the CAB, invited them to this exclusive meeting to preview their plans and schmooze with the exec team – they feel pampered as a valued customer and don’t want to be negative.
Usually the product team will present a new initiative or product direction, and then ask the customers what they think. Often they’ll get silence to start, and have to draw out the feedback from the customers. Or they get a very polite response like, “that seems like a good idea” or “that seems ok.” What the customers are really saying is, “that is not that interesting” or “I don’t need that, but someone else might.” They are often too kind in their feedback.
Avoiding the Tough Questions
Rather than present a preconceived roadmap for approval and/or validation, it’s best to start the conversation by asking customers what they need. What are their priorities? What critical problems are they trying to solve? What are their larger corporate objectives, and how can your product help them meet them? When you understand their needs, then you can present how your company and product can meet these needs. You might get a positive response, but the rubber meets the road when you ask, “Would you buy this if we had it today? What would you buy today?” It’s easy to say you like something, but ultimately people and companies vote with their wallets.
I was in one of these meetings recently, where a product leader presented their roadmap and development priorities to one of their largest customers. The product leader did all the talking and the customer just nodded along showing mild interest. Afterwards, the product leader said, “Thanks for the great feedback. It was very helpful.” He was about to walk out of the meeting thinking the roadmap had been validated by one of their biggest customers. But as we were packing up, I asked the customer, “So are you ready to buy this?” To which she responded, “No, we use a competitor for this and are happy with it. Your roadmap is not as far along as their current product for how we use it.” She then talked in more detail about her use case, her team and how they approach this problem, which was drastically different than the product team had theorized when developing the product plan. It turned into an informative discussion that reset roadmap priorities. But it was just one question away from giving the product team the wrong impression.
If you want to nail product-market fit, make sure you do more listening with customers than talking. And only after you fully understand their business problems, priorities and critical needs, then present a product roadmap to see how it meets those needs.
The Exception to the Rule
A lot of product-market fit problems can be addressed with more and better customer feedback and market analysis. Customers are usually right, but not always. They are not always as insightful about major technology shifts or disruptive trends whose consequences and ultimate benefits can be hard to imagine. Which means they may not be positive on something truly transformative such as the internet in the late 1990’s and mobile in the 2000’s. This is where guys like Steve Jobs truly excelled with incredible vision of the future (See Top Reasons Product-Market Fit Fails, Part 1.) Understand when you are talking about something so transformative, no one can really comprehend it.
In the mid-90’s as the internet was just emerging, my company Actuate was the first to develop an “internet-based” reporting system, where the main distribution vehicle for corporate data was the internet instead of an internal company network. No customers were asking for this at the time, as many questioned the internet’s security and usefulness for corporations. But it was absolutely the right call, and drove Actuate’s revenue growth and ultimate IPO. Today looking back it seems obvious, but that’s not the case when you are early in the trend.
Even as recently as a few years back, most Corporate IT departments wanted to keep corporate apps off of mobile devices due to security concerns. Now that looks naïve.
So if you want to nail product-market fit, get broad and frequent customer feedback on major product initiatives. Ask the tough questions early and often, of the right customers and engage them throughout the roadmap process. And understand when you are talking about something so transformative, that many customers may not “get it.” That does not happen often, but when it does, you know you are in the exception zone, where different rules apply.