Achieving ‘product-market fit’ – the alignment of the features of the product or service with the demands of a target market – is a priority for all organizations. New development efforts often pack a large number of features into the offering, increasing cost and complexity while all of the features may not provide benefit or be valued by customers. This misalignment between the “product” and market mean that a lot of time and money have been spent developing something that may not be successful in the marketplace.
Identifying the right set of features is critical to achieving product-market fit and eventual success in the marketplace.
Frameworks for Visualizing Product-Market Fit
The Business Model Canvas and Innovation Canvas are both useful frameworks for analyzing product-market fit. We have used both in courses at Rose-Hulman and both can be very effective in exploring and teaching the intricacies of design and entrepreneurship.
The Business Model Canvas is used in the Lean Startup approach which suggests initial customer interaction to identify a limited feature set or Minimum Viable Product (MVP), then continuing to testing/revising this core set of features in a search for increased market success. The features in the MVP are identified in the Value Proposition block and then these are associated with Customer Segments to understand product-market fit.
The Innovation Canvas provides a more comprehensive framework for visualizing product-market fit by highlighting features in a separate block in the Ideate quadrant, associating them with the functionality necessary to implement them, and then finally associating each one to a customer segment and revenue or cost contribution in the Market quadrant. The separate Features block provides space to capture the three types of features – must have, pay extra, and don’t want. Ideally, our final product includes a carefully considered collection of ‘must have’ and ‘pay extra’ features.
The ability to visualize the connection to functionality is critical. In the development of any offering, the situation often arises that a new feature request may be implemented with little effort because the functionality exists to support it. A different feature request may be very difficult to implement because the necessary functionality does not exist.
How do you go about identifying key features and achieving product-market fit in your development projects? The Innovation Canvas can provide the framework to help you take a more comprehensive approach to visualizing, analyzing and solving this problem.
