Project Product Market Fit

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Joss Whedon: “Don’t give people what they want, give them what they need.”

LPP: “Product market fit is a superior solution to an under served market need that is worth satisfying.”

Problem – Project Product Market Fit is Very Difficult to Achieve

A difficult challenge for any project is to deliver a unique customer value, that completely satisfies a critical under served market need, in a way that is significantly better than all alternatives. Before you start your project, your due diligence should help you understand the need better than the customer and should also identify a solution that adds more value than the alternatives. Good luck with that!

Ideal State – Project Product Market Fit

The ideal state is a project whose solution satisfies a known, or previously unknown, critical need so completely that your target customers become passionate advocates of your solution and recommend it, without incentive, to other potential customers who eagerly adopt it. This is product market fit.

Root Cause

Product market fit for projects can be elusive because market needs do not always present themselves in a way that is easy to recognize, except for customer complaints! Moreover, the market might not know it has a critical need until it is revealed by a creative disruptive offering. However, after your project satisfies your customer’s need, the features that delight your customers today may quickly devolve into standard industry offerings in the future. The demise of your competitive advantage will be accelerated by the release of new and improved alternative solutions. Consequently, your project’s initial product market fit will make your solution the initial value leader. But, in a competitive market, continuous improvement projects are required to enable you to retain value leadership.

Context – Project Product Market Fit

Project product market fit delivers a superior solution to an under served market need that is worth satisfying. Achieving product market fit is a journey. You can start with a strategic business objective or start with a high priority problem that you own. Alternatively, you may be directed to identify a solution that will better satisfy an under served need for a specific market segment. In this case, you will probably have to observe the behavior of the participants in the target market until you discover the highest value under served need that is worth satisfying. Whichever path you choose, you should eventually gain a better understanding of the under served need then determine whether the opportunity is attractive enough for you to invest substantial resources to satisfy it with a project. If so, your project team can build and refine a prototype to validate the need and also to prove your ability to satisfy that need significantly better than any alternative. In the following video, Steve Blanks recommends that startups develop a hypothesis about the market need, verify the problem, test the solution then verify customer satisfaction or pivot.

Customer Discovery: The Search for Product/Market Fit. 2 Minutes to See Why

Entrepreneurs can keep pivoting to a different solution, or to a different market, until they find product market fit. Corporate intrapreneurs, who direct enterprise projects, do not usually have this option. To avoid waste and rework, it is critical for intrapreneurs to nail product market fit at the beginning of each project. In fact, a convincing presentation of problem solution fit and product market fit should both be required before a project is funded for execution.

Some organizations outsource product market fit. They do this by creating an innovation lab or innovation group that works with startups. After a startup achieves product market fit, the organization makes a deal to leverage the product, service, team, technology, IP or other asset. However, investing in startups is risky. But, organizations can mitigate this risk by leveraging innovation-as-a-service from a third party intermediary.

Solution – Project Product Market Fit

The product market fit template for projects is one approach to increase your probability of providing a solution that delights your customers. You can log in to LeanProjectPlaybook.com and click the “Members” tab on the toolbar to request the Product Market fit template for enterprise projects. This template guides you through the process to define a problem worth solving and to propose a solution. Product Market fit is one of the key milestones in the lean project startup process. After you log in, you can also request information about a business partner that offers innovation-as-a-service to corporations.

To determine the Product Market fit for your project, first you should specify your target market. You should also specify the life cycle stage of your target market. For example, are you targeting innovators, early adopters, the early majority, the late majority or laggards. Each of these market segments have different needs and expectations so should be served in a different way. If your project creates or improves a product or service, you will probably need to change your marketing strategy and sales pitch for each of these market segments. After you select your target market, you should describe one, or more, key personas in that target market. For each persona, define how they derive value from their main use cases. Also, determine how your solution will change each persona’s key use case to add significantly more value. To do this effectively, you need to understand each key persona’s goals, motivations, pain points, preferences, benefits, expertise and pressures. To understand why and how the current need is under served for each persona, you have to understand what they value, what they like and what they dislike about their current solution.

You then need to define a hypothesis for your MVP. For your first release, MVP stands for “minimum viable product“. Do not waste time and effort adding bells and whistles until you validate the basic offering with real customers. Then focus on optimizing the basic offering. Your hypothesis should specify how your MVP will impact key customer use cases and customer value. You should then determine the success of your MVP by measuring the “one metric that matters”. For subsequent releases, MVP stands for “most value possible” within the constraints of the next release iteration. For each subsequent iteration, you should update your hypothesis that predicts how your solution will impact a key use case, measure performance improvements then optimize.

To be able to measure value and success, you should quantify the total possible value.You should also estimate the percentage of that value that is “addressable” given your solution’s constraints. Finally, you should estimate the amount of the “addressable” market that you believe is realistically “obtainable” given the competitive landscape. You should estimate the Total Available Market (“TAM”),  Serviceable Addressable Market (“SAM”) and the Serviceable Obtainable Market (“SOM”). The obtainable market is the percentage of the addressable market that you believe you can win.

Plot on a chart the value potential of the different features your project can deliver. The chart should measure importance to the customer versus customer satisfaction delivered. This enables you to prioritize the features. Then plot the current financial opportunity on a chart for each feature. The chart should measure cost of delay per month versus opportunity fit. The cost of delay is the unrealized financial benefit for each month the project is delayed. The opportunity fit is the expected market penetration for your solution. Then plot the return on investment on a chart. This should measure financial return versus investment. This approach to financial opportunity analysis is described in the Lean Product Playbook by Dan Olsen. This approach gives you a persona based opportunity analysis for your MVP and a feature-based financial SWAG for the opportunity.

Your Feedback

Enter your comments below so we can update this post and provide better solutions for the community. Also, if you have created any project management tools or templates that you would like to contribute for communal use then please send each one, with a brief description, to PMTools@LeanProjectPlaybook.com.

Business Opportunity

There is an opportunity to systematize the product market fit process for projects and to provide innovation-as-a-service to organizations. Let us know if you would like to collaborate as a part of our community to transform these opportunities into an easy-to-use solution that will help assure project value and improve project failure rates.

Alternatively, if your company is willing to contribute some of your time to help specify a solution to meet their specific needs then they will receive free licensing for an agreed period of time. Each project requires a project manager, an architect, a business analyst, a developer and a QA lead.

Simple Life Lesson

Every day we interact with family, friends, colleagues and strangers. Oftentimes, during these interactions we try to meet a want articulated by the other party. But are we always aware of how well we meet the real underlying need. Many times the other party may not be able, or willing, to articulate their real needs and expectations. Sometimes it is worth thinking beyond the articulated want to try to understand and satisfy the underlying need. Doing so may elicit true delight and eliminate follow up requests because you addressed the root cause.

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