The Lean Startup approach to product development, as outlined by Eric Ries, is an invaluable playbook for helping startups and companies discover and implement sustainable business models. Ries advocates constant iteration and rapid prototyping based on customer feedback in order to validate core hypotheses about your product and the value it delivers. In short, it goes something like this:

You have an idea for a product that you think people will go crazy for, you build a minimum viable product (just enough of your grand idea for people to get a sense of the value you’re offering) to test your assumption about your idea’s appeal, then you take the feedback it’s generating to move through the Build > Measure > Learn cycle, turning that learning into ever more appealing product iterations.

For this post, I’d like to look at the ultimate objective of lean product development; Product-Market Fit (PMF). This is very much the stuff of Startupland, but I’d like to demonstrate that even established businesses are able to realise huge untapped potential by allowing themselves to think and act more like a startup.

Essentially, Product-Market Fit boils down to this: it’s the point at which you have evidence that you have a product people actually want. Needless to say, it’s the sweetest of sweet spots that startups covet above all else as it provides the foundation upon which to grow your business. Sean Ellis, serial entrepreneur and author writing on startup-marketing.com, positions PMF at the base of his Startup Pyramid, upon which rests the company’s ability to scale and achieve growth.

PMF is critical to a startup’s success, as Patrick Vlaskovits, author and entrepreneur points out:

“Most startups fail not because they don’t manage to develop and deliver a product to the market; they fail because they develop and deliver a product that no customers want or need”.

Working quickly to get a product out to market is one thing, doing it in such a way that delivers an end product that people actually want is something altogether different.

So what’s the magic formula for achieving PMF if you’re a startup? Once the MVP is out there, engage with users to make the product a “must have”. Watch, listen, ask, probe and enquire to compile qualitative data. Use KISSmetrics, Google analytics or whatever service is appropriate to gain insightful data metrics. Use it to learn as much as possible about the way the product is being used and who’s using it. Then, when that information starts coming in, be prepared to make a few pivots and significant revisions. Be unprecious and all ears.

But how will you know when there is perfect Product-Market Fit? Sean Ellis suggests a simple, highly effective question to put to your users that can help you establish whether you have PMF:

“How would you feel if the product was no longer available to you?”

Ellis suggests a cast iron PMF requires at least 40% of your users to say they would be “very disappointed” without your product. Think about all the products you use on a daily basis. How many of those would cause you to be severely ticked off if they went out of business tomorrow? They had their PMF sorted some time ago.

Now take a look at your current product list in ELT. Browse the bookshelf or bring up the online catalogue. Imagine asking that very question to your users. How many would be very disappointed if one of your products ceased to exist tomorrow? How many would register it only momentarily before replacing it with something that, as far as they’re concerned, is more or less interchangeable? My guess would be that (in the majority of cases) they would be only marginally inconvenienced, and this is something of an inconvenient truth in ELT publishing. There are and will always be exceptions to that, of course.

If publishing companies aren’t developing products that move users to respond in the way Ellis describes, then we’re witnessing Product-Market Fill, not Fit. The current strategy is one of pumping products into a red ocean marketplace where the competitive edge hangs on either brand loyalty or historical convenience, as opposed to blue ocean markets that are open to anyone with a little ingenuity and the inclination to listen.

A major obstacle to the successful achievement of PMF in the ELT publishing industry is the insistence on planning products to insanely long timelines. The budgetary approval process for large-scale courses or products takes place a number of years before the users will see anything of it, and the assumption is that the product will get traction merely by the virtue of its very existence. The product development process is front-loaded with planning, scheduling and predicting, with user input being gathered only once it is commercially released. As such, not only is there no validation of PMF, but the market itself has aged by a couple of years in the meantime. That’s the equivalent of an iPhone version or two. This model is tolerable in a market in which learning products are few and far between, but that’s simply not the reality. It’s a noisy, clamouring, capricious marketplace in which businesses of every shape and size are jostling for attention and the consumer is increasingly discerning. Your product needs to not only be built, but it needs to be essential.

Applying startup thinking may well be a way of gaining a competitive edge in that tumult. It just needs a change in mindset and the conviction that a wanted product will always trump a planned one. The change in mindset involves chasing PMF, not a publication date.

So, for example, get early adopters involved from the outset. Put the MVP in front of them and watch, wait and enquire. Be prepared to make changes to the content, the features, the design or any other aspect that feedback indicates is causing problems from the users’ side. It’s true that there is a certain amount of this already taking place in the course of a product’s development in the form of focus groups and early trialling of sample units and so on. I would say that the difference between that approach and the roll out of an MVP is that in the case of the former it’s testing the overall response to the product to validate its development over a limited number of sessions. The latter, on the other hand, is looking to discover new and vital ways the product can be adapted to make it indispensable to the early users through ongoing dialogue and data analysis. There is also the assumption with the MVP that a fairly drastic pivot may be required, which may involve changing the core value proposition of the product or even changing the target market altogether.

Once the MVP starts to yield validated learning pointing to changes that need to be made, be prepared to take your required changes to budgetary approval, but also be prepared to dazzle the meeting room with metrics and evidence that justifies the additional expense and how you know it’s going to add value to the product.

Once the early users are engaging with the product in a sustained way, drop in the PMF question. If you’ve been successful in responding to the feedback and behaviour of the early users, they’ll let you know just how disappointed they would be if you were to pull the plug. With that confirmation you can then secure the next stage of investment to build out the product and gear up for growth and glory.

Surely that’s preferable to seeing through a 6-level General English course that no-one actually wants, or committing to substantial dev costs on the assumption that the market can tolerate another vocabulary app.

Having a PMF mindset also protects the product from unexpected changes of personnel within the business. As projects are assigned or inherited, it’s easy for the new team to imprint their own preferences or expectations on the development of the product, incurring extra financial or time costs. By letting the pursuit of PMF guide a product, the data and user feedback will drive development, rather than personal opinion.

Ultimately, you need to make your products remarkable and essential.

 

Featured image from: https://www.flickr.com/photos/sightrays/

5 Comments

  1. @ Tim Gifford

    You wrote: “(if) You have an idea for a product that you think people will go crazy for, you build a minimum viable product (just enough of your grand idea for people to get a sense of the value you’re offering) to test your assumption about your idea’s appeal,”

    Tim, I am unsure of whether you are advocating this position but I think this is an incredibly high hurdle to set for EFL products (“go crazy for”). Wouldn’t it be prudent instead to say, “if you have a product that gives a certain group of people a good reason to buy, or a product that replaces another product at a cheaper cost (etc.) then it is time to build a MVP to test your assumptions.

    People don’t need to “go crazy” for a product to buy it. Although Apple might set this as a goal people CAN built businesses upon good products if they get all the ancillary stuff right (staffing, customer service, pricing, marketing, distribution, niche market).

    IMHO, a far better approach to deciding whether a product is a great one, a good one, or a bad one is the process advocated in The Blue Ocean Strategy a book which I noticed you mentioned.

    One problem I have with MVPs is that I am very careful not to sign up to services that “look like” they are are MVPs in look of external validation (they are usually very easy to spot). I suspect that people who sign up for a lot of these MVP services are mostly people who are first movers. But these are exactly the people who get bored and move on quickly to the next great idea, and so on. These may or may not be the best people to attract.

    It sounds like the problem with the EFL development process is the time it takes to get something done. It sounds like you are advocating finding ways to speed up the development and approval process. “Come on Michaelangelo– this painting is taking much too long.”

    Don’t worry, the robot writers you so long for are well on their way.

    1. Hi Mike,

      Thanks for the comment and for sharing some interesting ideas. You make a number of great of points, which I’d like to try my best to respond to, if I may.

      My “go crazy for” benchmark is, perhaps, a rare demonstration of my own optimism in the ELT industry’s ability to deliver terrific products. I can perhaps dial that down to “see unique value in”. Ultimately, the post is about avoiding the mediocrity that ELT publishers would be peddling if they set their sights on developing a product that merely “gives a certain group of people a good reason to buy, or a product that replaces another product at a cheaper cost”. That’s product market fill, not fit. Expending time, effort and money on products that barely move the problem/solution needle, and which are hoping to compete only on price has not served the publishers well so far.

      The main driver behind an MVP is to test your assumptions about the value of a product to your users, a key aspect of which is its ability to solve user problems. If early users stop using a product or service then it suggests the MVP itself failed to demonstrate how the product or service might deliver that value in a sustained way, rather than it being a symptom of a flighty early adopter mentality. In many ways, you do want to appeal to the early user – those who are able to zero in on the unique value of a product – rather than the herd.

      I don’t think this approach is a high hurdle for ELT publishers. We work with publishing teams that are applying this thinking in their projects already. The main obstacle, in many ways, is the ability to think creatively about providing solutions without reverting to “good enough”.

      The blog post isn’t intended as a criticism of the time spent putting products out (see the quote from Patrick Vlaskovits). It’s about making sure we make products that people actually need and that they find essential. MVPs aren’t just about speeding the process up, the approach is about learning as much about what makes your product better and more appealing to your users as quickly and cheaply as possible.

      Finally, the comparison of the ELT product development process to Michelangelo made me chuckle. I think the analogy might work better if Pope Julius II had commissioned Michelangelo to come up with a mural that was more or less the same as the other big churches, but could he make sure it included something hip and fresh “for the kids”.

  2. Very nice read and review of something we seldom see in the ELT business. Product validation should be primary and could be done by simply sharing the product idea and prototype and asking users to pay and pre-order. Never seen that done in ELT , question is why?

    Dan Martell has a really good presentation outlining the fundamentals of product validation and his framework of Start / Grow / Sell http://www.ideatoexitonline.com/ Worth watching and putting in your email if thinking of making a product / material / website whatever ….

    David

    1. Awesome read guys.

      David, actually this almost a synopsis of what we’ve been through with my own startup. We are not only a startup, but we are an ELT content tool aimed directly at the traditional ELT publishing industry (we’ve built our own teacher-led ELT content from scratch and paired it with software).

      We went from MVP to a solid market fit and are now starting to grow nicely. The period of adjusting the MPV for market fit is quite gruelling though! Not for the faint at heart.

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