Last week I wrote about a losing product development and management strategy – ignoring or misunderstanding a product’s ecosystem. The Apple iPod was not a market winner until iTunes contributed an essential element to the product’s ecosystem, which was adding music to the MP3 player in an easy and intuitive manner.
Another essential element of product development and management strategy is creating a proper product-market fit.
Product-market fit
In response to the growth spurt in innovation, two Silicon Valley consultants, Chris Sorensen and Matt Brocchini, have developed a new way (after all, they are innovation consultants!) to help quantify Product-Market Fit—Q-PMF, “ a measure of fit between what a customer wants and what the product provides,” as Forbes reports in The Three Laws of Disruption.
The idea is this: if your company and another company are working on innovations that address similar customer niches, the company with the best Product-Market Fit is much more likely to become the sustainable innovation. Case in point: Apple’s Newton vs. Palm’s Treo or any of the successful PDAs.
Apple’s Newton was an awkward size—not large enough to be a a tablet, but too large for pockets—and it needed a stylus that could easily become misplaced. In the case of the Segway example from last week, certainly an innovation, the price turned out to be too high for consumers, creating poor product-market fit.
Sorensen and Brocchini’s lesson
Sorensen and Brocchini believe that Product-Market Fit is “the key to sustainable innovation.” To defend this position, they use three laws of disruption:
- Disruption comes to us all.
- All disruption is caused by changes in Product-Market Fit.
- There are only three methods to change Product-Market Fit:
- Change the product so that it is a better fit with the target market
- Change the target market so that it is a better fit with the product
- Change people’s preferences so that they value your product more.
If your company is working on product innovation, the key question for market success becomes, how do we ensure a high Product-Market Fit? If you have kept up with my blogs, you know this answer: consider the whole customer experience (read more about that here), and learn from potential end users (visit this blog).
It is possible that improved market and customer research prior to launch could have saved the Newton and perhaps even the Segway. such research helps us as product developers, managers, and innovators to understand the ecosystem and the best product-market fit for a product.
The primary responsibilities for an organization are product management and innovation. They deliver value to customers. They're also exciting responsibilities for those properly equipped. That is my job - equipping product managers and innovators. 