 Hi, everyone. Thanks for joining today. My name is Sarv Sharma. I'm currently a senior product manager at Amazon. And I'm excited to talk today about finding product market fit. Without further ado, let's just get started. Yeah, just a little bit about my background. As I said, I'm currently a senior product manager at Amazon. Before Amazon, I worked in eBay in the San Francisco Bay Area. Also worked as a product lead at Ceremonkey. Prior to product management, I've also done business consulting with TCS, with leading clients like GE Capital, GE Healthcare, and Charles Schwab. I did my MBA from Boots Club Business in Chicago. Kind of fun fact about me. So far, I've worked in about three continents, India, Bangalore, US, San Francisco, and now Canada, Toronto. Yeah, that's just a brief overview about me. And now let's get started. Here's our agenda for today. And we'll try to kind of mostly stick to it. But we're going to talk about products of product market fit, take some company examples, product market fit framework, and then talk about how do you know that your product achieve product market fit or not, and then also talk about some common misconceptions and the handling control. Let's just, OK, there is many different definitions of what product market fit is. And there is different ways you can describe it. But the way I like to kind of describe about it is just putting very simplistic terms. Like your product that you see here, which is composed of your UX features out in value proposition, that kind of meets the market in terms of underserved needs in the target customer. That's a simplistic definition of what a product market fit is. And you can think of it in different ways. But the two of the ones that I like, I've kind of mentioned it here. One, the first one is from Mark Anderson. It's all about putting a product that satisfies the market need. That is just the very basic one. But this is very powerful. That's all to it. And you can put different spins around it, but that's kind of like the crux of it. Another one that I like is for this from Elizabeth Yuen, did you find a product market fit when you can repeatedly acquire customers for lower costs than they are what do you? Basically, what that means is that if the amount of value that the customer is giving you is more than what you spend on acquiring them, that's when you have achieved the product market fit. That's just like starting it and we're going to dig deeper into it in our subsequent slides. OK, let's look at, you might be wondering why all this was about product market fit, right? This is actually a very important thing. And this is especially true for the 0 to 1 kind of products which are like new products that the companies launch. And there's some stats. It says that about 42% of startups fail because no one wants to buy their product. And this is pretty startling. And also for corporations, about 80% of the new products fail each year. So that's a pretty daunting stat to have to say why this product market fit is important. Also, if you think about it, this is scary as real because companies are spending millions of dollars annually to chase it and then realize that it's not there or only a few of the products might achieve it from some of the companies, right? So I mean, if you think about it and like the users, it's like a mirage, right? The more you chase and force fit, the more it goes away from you, right? That's just how the nature of the beast is. OK. Yeah, let's just look through some examples now, as I would have said, to see what it means. So I've taken some examples of companies that have achieved product market fit. And I just say it as of today is because we don't know what's going to happen tomorrow. But as of today, we know that these companies have product market fit, right? And we're going to see in a while that the product market fit is not a one time thing. That you achieve and then you can say like, hey, I achieved it. Now I'm going to keep it for the rest of my life. Yeah, it doesn't just work that way. I mean, there's a continuous process. Companies need to be aware of and keep working towards to make sure that their products remain, product market fit and don't drop off. OK. Yeah, now the one which I like about Uber is just to give an example of what their timeline looked like from product market fit perspective, right? So Uber launched, as you might know, that as a luxury ride-hailing service in San Francisco in 2010, it was just like for the few elite group of people, it was just a ride-hailing service that it launched. It was very different from what you guys see today. And the funny story, I remember that during when I was in Bairia, the way I discovered Uber was I was not able to find any cabs in the downtown area. And then when I found it, somebody told me that, hey, why didn't you try this Uber app? You can just hail that cab from your phone. And that was like pretty exciting news. But anyways, that's just how I kind of like discovered it. Yeah, so in 2010, it launched in SFO in 2011. Then it slowly started expanding to other US cities and started with a mobile app. This is the first time they kind of had it. And that's when I also kind of discovered it. Then companies, after a while when they launched, they started having this rivalry availability and reliability issues. And then they invested heavily to solve for it. And it took them some time, about two years, to kind of work through that and solve those issues that they had. And then finally, in 2013, is when the company launched at UberX and started the sharing economy model that we are pretty well-versed with now. It's like you have a car. You can start driving with Uber. But that didn't used to be the case when it started out. It slowly kind of evolved into that model. But 2014, then Uber expanded to more than 100 global cities. And then once their core product, which was rallying service that acquired, achieved a good product market fit, then it slowly started expanding into other product areas like the food delivery, the Uber Eats that you see today, or the free transportation. So those other product areas, those evolved over time. But their core one was mostly the Uber, the cabeling service. So that was their main. So as you can see here that achieving product market fit and then expanding into other product lines, kind of like takes time. It's a slow process. It's an iterative process. And it takes a lot of time and effort to kind of like goes with that and then start your other product lines. That's the point that I wanted to kind of make that. Like how it evolves over time. Yeah, now you might be aware of the some companies that lost product market fit. And that's, again, I put over time because it's not always like, do you have it today? Do you worry a lot? Do you lose it? It takes some time before you realize that that thing is not there. You might have seen BlackBerry or used BlackBerry phones with their QWERTY keyboard. It was like in a secure email service. It was like revolutionizing mobile phones. Till the time Apple came along and with their touch screen smartphones and apps, app stores and all, then, you know, like customer behavior and habits started changing, right? And BlackBerry didn't quite evolve as per the needs. And finally, you know, although there might be a few BlackBerry phones out there, but there's like a whole lot of Apple phones, right? And Samsung phones and other smartphones, right? Yeah, same thing with Blockbuster, right? Blockbuster thought that, you know, renting via physical stores is the way to go about it. You know, customers like, you know, like doing it and coming to store, but you know, get renting the DVDs and then returning it back. Well, yeah, that was true for some period in time when Blockbuster, you know, expanded toward US, but then, you know, came along Netflix and they put the entire thing over the internet, right? And you can just like stream movies and watch it, right? So, and slowly customer habits started changing and, you know, today we know that there might be only handful of Blockbuster stores or maybe left out there and Netflix has like, has become the number one streaming service, right? Or, you know, maybe like there are a couple of them right now, like there's Prime videos as well, but the Netflix and Prime videos are both like, like pretty strong services, you know, which are going on. Same story with Sears, right? I mean, Brick and Motor was used to be a great business model and Sears was like having tremendous customer quality and everything. Till the time they, you know, didn't pay heed to customer changing habits about, you know, like just ordering on phone and, you know, things arriving into their houses, like the whole e-commerce phenomenon, like Sears kind of missed that board. They stuck to their, you know, traditional Brick and Store model. Maybe they did some things over the, how to do the, you know, the whole e-commerce thing, but they weren't like that innovative. And so, you know, other companies, you know, kind of just like Amazon and maybe others too, you know, kind of like ordered them, right? And now there might be only handful of Sears stores out there as well. So that's just to kind of like give you a flavor of, you know, what happens and you know how companies kind of like lose this product market fit over time. Okay. Let's look at some of the common misconceptions, you know, about product market fit, right? And I've kind of seen that over the course of my experience of, you know, what happens and, you know, sometimes, you know, we get excited about like what's happening. So some of the misconceptions like, you know, you get few better customers for your product, you know, and then we start like, okay, great, we have product market fit or you get some reviews from one of your clients or customers, maybe a couple of them. And then you start like immediately like, okay, maybe we have a product market fit. And the same thing with like, it's all like two different versions of a product or customers are discovering product on their own. And, you know, like, we had like an excellent webinar showing the benefits of our product and you know, many leaders signed up for it. Oh, great. You know, we have product market fit. Well, these might be, you know, all these, I would say it's like, you know, they're like, they are good stars towards doing product market fit, but not actually a product market fit, right? So we just, we should, you know, just not like take things on base value. We need to like kind of like dig deeper to understand, you know, what product market fit is. Okay. Like the frame. So I think let's talk about, you know, the framework for product market fit. I mean, you know, the framework is pretty like, let's say like if you are been in product management or, you know, you've been working or if you're starting new, might have heard about these things, but it's, that's pretty like, I would say standard, but you know, the way is like, or you know, the way it becomes challenging is like when you actually dig deeper into each of these areas and try to find more deep, you know, more, what do you call nuances to it? That's where it, you know, challenge comes, right? And I like a very, I would say simplistic. The, you know, framework would be like defining your target customer, finding the underserved needs of the customer, you know, finding your value proposition for your product, specifying your MVP with key features that you want to build. Then finally, building your MVP, then testing MVP with actual customers before scaling. And then, you know, finally everything goes good, then you know, end up scaling your product and that's how it goes, right? So that's the kind of like the generic framework, but like key thing to note and keep in mind is that this is not like a linear thing, right? I mean, so there could be like back and forth building stages, right? So you might like start with, you know, some, you know, you have a hypothesis, you start with your target customers and then you start like, you know, something was a good value proposition, but when you start building your MVP or when you do some research, you figure out that, oh, well, that was not the case, right? So then you go back to your trying board. Sometimes it can happen even after you have kind of like, you know, you build your MVP and then you're testing with actual customers, that's when you realize that, you know, it's not like working out, right? It's an expensive thing after you build your MVP, but still like, you know, it's better than launching something which the customers don't like and wasting your time and effort into it, right? Versus going back and figuring out, you know, like, why did it work out and you know what we could have done differently, right? So it is an iterative process. It's definitely not a linear one. So that's something, you know, to definitely do kind of like keep in mind. Yeah. Also, I think one of the important things I would mention is that, you know, since of the product market fit, when you're finding your underserved needs of the customer, you know, we talk about the market, right? So, you know, like when you're doing this calculation, you might have like heard or, you know, you might have seen, you know, we talk about three main terms, right? The TAM, SAM and so, right? So the key thing to keep in mind is when you're finding those underserved needs for the customers in the market, right? That you're looking for a market that is, you know, that is large enough and would be able to sustain your business, right? So that is like one of the key things that you should keep in mind. So, and it's worthwhile to kind of research the time, you know, you kind of like get there. And in terms of, you know, when you look at it, you know, like many people would get stuck with like, okay, we have this total addressable market, right? You know, that is big and let's get to it. But I think the key thing to keep in mind is that, you're looking for your SOM, not your TAM, right? Because TAM is the total addressable market for whatever industry and product that you're launching, right? That doesn't mean that you'll be able to capture it. You like, in very unlikely case, if you have a monopoly or something, you know, you might be able to, but that's very rare. Most of the cases, there'll be a lot of other people competing for the same TAM, right? And then you have to find your, what's your unique value proposition and how much you'll be able to capture, right? So, you know, like the one you should focus on is your SOM, right? And not like your TAM. Just, I wanted to kind of like highlight that point. Okay, now we come back to the main question. Like, how do we know, like, did my product achieve product market fit or not, right? So I'll say that, you know, there is like, you know, there's no single metric that will tell you about product market fit, right? Usually it's a combination of both qualitative and quantitative metrics. And also like finding product market fit requires long-term thinking on part of companies and its leaders and not just to try out for a few months, right? It's not like, you try something out for a few months and then say like, oh, well, we didn't achieve product market fit. You know, sorry, let's not try it. And then, you know, just stick to whatever we have been doing in the past and what has worked, right? I mean, that's not how you're gonna achieve your product market fit. It requires some consistent efforts or a long period of time for you to kind of see the fruits of your, you know, the hard work that you put in. Few things, you know, in terms of quantitative side, you can look, you know, look at around the world of models from customers, you know, calls about your products from the using media agencies. On the quantitative side, you know, you have like NPS, Goal Growth Rate, Market Share for your product, like, you know, where you are operating on, how fast is your, like, product growing? You know, it's the growth rate compared to the market. Like, you know, market is growing at a certain stage. You know, is your product growing at a faster rate than the market? You know, like, customer lifetime value, you know, you know, is your lifetime value more than the customer acquisition cost, right? That's, and then, how it is growing. And then, how is your retention? Like, turn rate and other things that you can, you know, kind of look at, you know. The point being, like, yes, there are, like, a lot of these metrics and all we can look at, but usually it's not just one thing, you know, which can tell you that. It's, like, usually a combination. And we're gonna see some of those in the next slide. Yeah, so, okay, now, as I was saying, like, some of those signs, right? Like, when you have a product, how can you tell that you have a cheap product market fit, right? One is your exponential organic growth, right? That's very important, right? Because you don't want always to be putting money in for your ads and then, you know, kind of like getting customers in, right? You feel, if you have achieved a certain level of the product has achieved certain level, you want to be then shifting towards, you know, your organic growth, right? You don't want always to be relying on ads to grow your business. Or, you know, you have to eventually reduce that spend and then, you know, focus more on organic growth as well. User retention, as I was saying, you know, if you're having a very high user retention, typically, you know, at least 40% is considered a good one for product market fit. And you have a strong sign that, you know, you're moving the right direction towards PMF. As like compared to, you know, lifetime value and customer acquisition costs, so if you, you know, like, if you're spending, like, say $1 to a credit customer with lifetime value of three, you know, that is typically, you know, the next, it's a good number to have in terms of like, you know, signs for a product market fit, right? So that's like a three to one return on customer acquisition cost, right? So that's another thing, which are like good signs that your product is in a product market fit stage. Yeah, and if your customers are pretty disappointed that your product is removed from the market, and, you know, a good number is about 40%, then, you know, then it's like a, you know, sign that you are, you know, your product had, you know, product market fit, and that this sort of happened. You know, the other one I would consider is like something like, customers are clamoring for your product, right? I mean, so like, you know, they're applying your product as fast as you can make it, or in, you know, like in other cases, you know, they are using it or, you know, they're using it as fast as you can add your servers, right? And the capacity for them to make more users use your product, right? So that's just another kind of like analogy that I can use. You know, like on the qualitative side, but like your boarders want to talk to you about how hot new product that you have built, right? I mean, it's all over the news and agency, right? So these are like some of the signs that you can consider that, you know, your product is actually achieving product market fit, right? So these are, you know, some of the signs to kind of look for, right? And, you know, like this graph that I put here that explains it perfectly, you know, like, you know, what it means to have a product market fit, right? Like it's a two by two, but, you know, it kind of gives a good feel for it. Okay, okay, conclusion, right? So this is what I wanted, you know, to say is that here, like achieving product market is not a one-time event, right? So if you think that it's a one-time event, that's definitely not the case, right? It's an ongoing process and companies must be willing to continuously trade and improve their products, right? That is just like given, right? It's not like, you know, I can, I've launched a product, it's a cheap product market fit and then I can just sit tight and then forget about it. No, that's definitely doesn't happen, you know? Product market fit could be lost due to, you know, changing market conditions or, you know, changing customer needs or, you know, innovation that is happening in the market or failure to scale your product, right? For the customers. It can happen for a lot of these reasons. So that's definitely something to keep in mind. And then the other thing is, you know, because of, you know, that the fact that PMF can be lost, that, you know, then this involves regularly testing new features, analyzing user behavior and making data-driven decisions to optimize the product for the target market, right? So this is like, it's an ongoing thing, that's why, right? I mean, you can't leave your foot off the pedal, right? I mean, you have to continuously evolve your product, keep it ready and trying and innovating for it to stay in that product market fit phase, right? Okay, that's about it. Thank you very much for being here. Until next time, see you in another product webinar. Take care, have a good night.