I have spent some time pouring over everything in existence on the subjects of business and entrepreneurship. I am far from finding all of the best information and quite honestly, most of my time is wasted on products that are not that good. Most business books and articles on the web are garbage.
With that being said, I know when I come across valuable information. Stuff that just makes sense and is easily to apply, observe, and repeat.
The Pmarca Guide to Startups is filled with great information. I had to adjust the way I received the information because it is modeled for tech startups with VC backing. That is a far cry from what I am doing and intend to do.
The one article everyone should read is The only thing that matters and its very detailed summation of a product/market fit. The article was authored by Marc Andreessen.
A product/market fit means being in a good market with a product that can satisfy that market. It is the basics of all basic things for a business.
BUT it is not easily described and is not a regular practice for a business to seek out product/market fit. How many products do you see made that doesn’t even have a market? These products attempt to create a niche’ market out of nothing and are often unsuccessful in the long-term.
According to Andreessen, “You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.”
Basically, if you aren’t making money, consistently, then you have failed to achieve product/market fit. This is valuable to me because I only aim to enter established and existing markets. However, the product still has to satisfy that market. People still need to buy it and the sales cycle still needs to be consistent. There are ways to achieve this besides an original product. Things like quality, marketing, disruption, and just plain persistence. But again, none of it will matter unless the product fits the market.
Read more: Why Quality is Important
“And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.”
Successful personal and professional development author, Brian Tracy, asks three questions in regards to marketing.
1. Does a Market exist? Are there people willing to buy your product or service. With new products, this question is very important. If there is a market, will your product or service be able to compete with the existing companies. Are they companies well established brands that dominate the market? How will you disrupt this market?
2. What is the size of the Market? Is there enough of a Market for you to make profit? That is the bottom line. There may be a market of 100,000, but it is spread in 10,000 increments across 10 different cities. You market is now just 10,000, probably not enough to make a profit.
3. Is the Market concentrated? Out of that 10,000, there are already five companies that are competing for a share. Now your market is even smaller and your cost per acquisition increases. The amount of money you will have to spend to get a customer is high due to the competition and size of the available market.
MJ DeMarco’s unconventional thoughts on wealth and business adds valuable points about what is required of a business to be successful. The post for The Millionaire Fastlane on the Outwork Book Club is here.
Make One Million people achieve any of the following:
- Make them feel better.
- Help them solve a problem.
- Educate them.
- Make them look better (health, nutrition, clothing, makeup)
- Give them security (housing, safety, health)
- Raise a positive emotion (love, happiness, laughter, self-confidence)
- Satisfy appetites, from basic (food) to the risque (sexual)
- Make things easier.
- Enhance their dreams and give hope.
So, the only thing that matters is achieving product/market fit in a viable market. I say again, the only thing that matters is achieving product/market fit.
PS- The marketing book I mentioned by Brian Tracy can be purchased here. It’s small, cheap and packed full of useful advice.
The Pmarca Guide to Startups can be found here.
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