Product-Market Fit
Definition
The term “product-market fit” refers to the match between the actual solution (product, service, business model, etc.) and the market it addresses. Essentially, it is about finding out if a solution satisfies strong market demand.
When bringing a solution to the market, it is critical to know whether or not it is targeting an attractive market.
To determine this, the idea team defines the target market and examines its size (number and value) and potential revenue streams. Assumptions made based on this can be verified through further research and interviews with market representatives or customer contacts.
Furthermore, it is crucial to know whether a solution will meet strong demand from that market.
To find this out, the team may define and run experiments to test the level of interest, purchase intent, the usage of the solution, etc. These experiments may involve building various prototypes or a minimum viable product (MVP).
Related concepts
Incubation
Incubation is the process of taking an idea from concept to an actual product, service or business and testing key-hypotheses about the concept to see, if the product can fit the market.
The early part of incubation is sometimes referred to as validation to clearly indicate that…
Problem-Solution Fit
The term problem-solution fit refers to the match between a proposed solution and the problem or an unmet need it is trying to address. Problem-solution fit precedes product-market fit.
The first indication of whether an idea will be successful is typically based on finding a…
Validation
Validation is the process of testing hypotheses to gain insights into whether an idea will be successful or not. This can be done through interviews, observations and experiments, and conclusions and recommendations are made based on the results…
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