Product Expert Noa Ganot Shares Her Method for Finding Product-Market Fit
The ability to find product-market fit is make-or-break for a startup. And it involves a significant amount of research, work, and iteration to do it successfully. Longtime product leader Nao Ganot hosted a session during the 5 Day Charge all about finding product-market fit, including her unique product management approach to getting there.
Why finding product-market fit is so critical
What’s the number one reason why startups fail? “They make a product that nobody wants,” Ganot says. “Your job is to make something people actually want before you run out of money.” The key to avoiding that type of failure is finding product-market fit early.
But how do you find product-market fit? By following product management best practices to ensure you’re making a product that actually solves a problem. “Einstein supposedly said that if he had an hour to solve a problem, he’d spend 55 minutes thinking about the problem and only five minutes thinking about the solution,” Ganot says. “That’s very good product management advice because you have to fully understand the problem and then the solution comes to you almost right away.”
How to approach product management to find product-market fit
“If you look for product management images in Google, you typically find a Venn diagram between business, customers, and technology with product management at the intersection,” Ganot says. “I actually break it into four sections, and the idea is to make all of them work perfectly together to reach product market fit.”
“I separate the market, which is where the business actually happens, from the problem that we’re trying to solve for the market, and I also separate the product from the solution,” Ganot says. “Here’s an example. Let’s say that you’re trying to get from point A to point B, and that’s your problem. There are many solutions you could bring to that problem. You could build an airplane, a car, a motorcycle, any form of public transportation. You could work on teleportation if you think that’s the right way to do it. Or you could build Waze, which approaches the same problem from a very different angle. Now, as you define the solution, you also have to refine the problem, because building Waze and building an airplane don’t solve the exact same problem.”
Remember too that “the product is different than the solution,” Ganot says. “If the solution you selected was a car, there are many brands of cars out there and each one is solving a slightly different problem. Japanese cars, in general, are super reliable and you can use them for years, whereas French cars have an amazing user experience but they’re more prone to needing repairs.”
And everything “goes back to the market because the problem is always a problem for someone,” Ganot. “It does not live in an empty space. It’s always someone’s problem. So once you have your problem, you go validate it in the market. You need to understand that it’s a good problem and people are actually interested in it. And then you define the solution and go back to the market again to make sure that people want the specific solution that you’re offering.”
“Only then is it relevant to go and actually implement the product,” Ganot says. “And when you have a product, you send it to the market. At first it might not be the perfect product that the market needs, so you go back and analyze where the problem is. Maybe your problem is not accurate, maybe your understanding of the implementation of the solution is not perfect. Maybe it’s a product issue. You go and adjust any piece of this puzzle and try again. You will get closer over time, and eventually - if you keep iterating smartly and the need you are solving is a real one - you get to product-market fit and the circuit closes.”
What makes a good problem to solve?
“As a startup, you have the luxury of choosing the right problem to solve,” Ganot says. “You have to do your research, select the right problem, and make sure it’s clearly defined. And think about what makes a problem worth solving. It has to be three things. First of all, it has to be specific and tangible, otherwise you won’t fully understand it. Second, it has to be important enough for someone, otherwise you’re making something that’s nice to have instead of solving a problem. It needs to be painful enough that a solution is needed and people are willing to pay for it. And third, it needs to be prevalent, because otherwise it’s not worth the business you’re building.”
How to choose the right customers
As a startup, “you can choose your customers and you need to be able to describe them very clearly,” Ganot says. “A good customer profile is similar to a good problem so it has to be specific, as in a specific role within an organization or a specific person's profile. And there have to be many people like them, so that profile has to be representative. If you are building a solution that would fit just one customer or only a few, you’re not going to be able to succeed in the market.”
“Of course, your customers have to be people that have money and are willing to pay,” Ganot says. “Sometimes you’re solving a very important problem but organizations don’t have the money to pay for it. You may decide you still want to do it, but if you’re a business, then you need to think of other funding sources. You have to think about that in advance because otherwise you’ll find yourself with a good product but no business.”
Keep in mind that there may be several stakeholders that you need to consider as customers. If you’re B2B, and sometimes this is true for B2C, you have multiple decision-makers and you need to make sure that you’re solving problems for all of them,” Ganot says. “If you’re making a car seat for a baby, for example, it needs to be comfortable for the baby but it also has to be safe and easy for the parents. You have to satisfy both.”
How to understand your users
In order to make a product that people will actually buy, you need to have a deep understanding of who your potential customers are. “There are many things you can do to understand the users,” Ganot says. “In today’s world, one problem is that people only think in numbers. But oftentimes, especially in the initial phases, user research focuses on the qualitative rather than the quantitative.”
“You want to actually meet you potential users,” Ganot says. “Talk to them, hear the language they use. You don’t have to give them closed questions in a survey that asks them to select yes or no or A or B. You want to get into their heads, and there are many information sources you can use, from what’s happening in the news to what’s being talked about at conferences. Use those sources and more to put together a story that you think makes sense. And you have to know at every point in time which parts of the story are supported by evidence and which parts were hard for you to validate.”
It’s key to be specific when you’re thinking about your potential users. “If you’re thinking that your product solves a problem for everyone, it’s generally a very bad answer,” Ganot says. “Even the iPhone is not for everyone It’s for people who are wealthy enough to buy it and have some understanding of technology, who live in an area with internet access and so forth. So you have to be very specific. And it requires you to use common sense. Then you go back to the people and validate what you’ve put together. The further out you are in the process, the more specific your validation needs to be.”
What makes a good value proposition?
“A good value proposition is specific, clear, short, and understandable to anyone reading it in no time at all,” Ganot says. “It summarizes your whole story and it needs to answer the following questions clearly: What is the product? Who is the customer? What are the benefits and results customers get from using the product? And why is it unique? The more your value proposition uses the language that the customer uses, the better, because you want to be in their world, not talking from yours.”
“The more explicit your value proposition is, the more it resonates with people. And the bigger the pain it solves and the more value it brings, the more you can charge for your product,” Ganot says. “And it all goes back to whether your problem is a good problem, you’re able to explicitly explain the value, and you’re selling that value. That’s why the value proposition is so important.”