product strategy

Product Market Fit Starts With Smaller Markets Than People Think

Instead of finding PMF in large markets, companies find product-market fit in a series of small connected markets that expand into each other as their products bridge into new use cases.

One of the biggest mistakes software product companies make is pursuing larger target markets than they can initially find product-market fit within.

It's an all too common problem that stems from ambition and a positive mindset that's a source of great creativity, but it hurts the majority of companies' product adoption and business momentum.

Initially pursuing product-market fit in markets any larger than a very specific niche is most often a bad idea.

When companies pursue larger markets than their product has already proven extremely well-suited for, they are likely to be met with mixed signals that throw their business into a state of confusion.

Confused business strategy

At businesses that initially pursue large markets, executives and leadership have trouble identifying the right product use cases, product teams get asked to build non-complimentary and diverse sets of features, marketing teams struggle to create cohesive messaging, and the business loses as a whole.

Contrast initially targeting large markets with targeting a specific niche.

Businesses that target niche markets know more about who they're targeting and, more importantly, why people use their product, which is ultimately a better indicator of long-term future success.

Only the specific knowledge about how people use your product arms businesses for success.

Once companies know how people use their product, they can do two things that enable their success:

  1. Identify larger existing markets who they can effectively target and pursuade to become new customers because they first validated a shared pattern of user behavior
  2. Refine their product and feature set to build upon core use cases into larger connected markets with a shared set of problems.

Companies grow into new markets as their products bridge into new use cases

Until companies know why users do what they do, they will struggle to find product-market fit.

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