Determining the Product-Market Fit

Image via bpdragon@flickr

Image via bpdragon@flickr

At the moment I’m going through the process of trying to get a business idea up and running with a friend.  After doing some cost analysis on our prototype, getting some initial research and determining costs on the (many) IP issues, and some excellent advice and mentoring from a very smart guy,  I managed to just about cram a few words in edgeways to a rather unimpressed business advisor from Enterprise Ireland.  While we didn’t walk away with an enormous sack of Nazi gold, he did give us the benefit of the doubt and recommended us for the Enterprise Start 2 program run at the Guinness Enterprise Center by the Dublin Business Innovation Centre.

Enterprise Start 2 Program

I can wholeheartedly recommend the program as a very practical, well-grounded course. Not only is the content and presentation excellent, but the program puts you in touch with people trying to launch their own ideas. The feedback and advice from other people in a similar situation is invaluable.

The program is broken into five modules which bring you through the process of identifying and addressing the unknown quantities in your business concept. The primary aim is to determine what value you will bring to a specific customer,  how many customers are in the market, and what sort of marketing and sales channels to use to target them. We started off with a prototype product (non-software), which wowed everyone we showed it to. The vast majority of people who see it, love it.

Therein lies part of the problem. While people love the concept, those same people are unlikely to fork out some of their hard-earned cash for it. Trying to drill down into a market which would consider the product a “must have” item didn’t yield a lot of success – any markets the process discovered are areas which we have little or no experience in.  So, after re-jigging the concept somewhat we’ve found a market segment that we understand, and who will happily give us money for the idea.

Finding a product / market fit

It’s just as well we hadn’t spent a year of product development before this revelation – which leads me to Eric Ries‘ fantastic presentation on how to build a “Lean Startup”.  The basic concept that he espouses is that while Waterfall development makes the assumption that both the problem and the solution are known entities, and Agile concedes that the solution is unknown and needs to adapt – neither is actually correct for a lot of startups. It is possible to build a working, bug-free product, and fail spectacularly as a business.  Without verifying your design ideas continually against the people who are actually going to use your product, you’re setting the scene for a party that nobody’s going to come to.

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