#16 Finding Product-Market Fit with Kenny MacKenzie
Jun 12, 2020
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Kenny MacKenzie, an expert in product-market fit, discusses the importance of understanding the target market's goals, obstacles, and negative emotions. He emphasizes the need to act like a scientist/private investigator, finding the right problems, experimenting, and learning from customers. The podcast also explores the evolution of marketing channels and the role of experts in validating ideas. It debunks the misconception that startup founders need to be genius engineers and emphasizes the focus on market need.
Startup founders should approach their ideas with a scientific mindset, seeking to disprove themselves rather than prove themselves right.
Conducting customer interviews is essential for understanding the needs and pain points of the target market.
Finding the right individuals for interviews is crucial, using methods like cold outreach, referrals, and leveraging social media platforms.
Validating the market need and demand before investing heavily in product development is a key priority for startup founders.
Deep dives
The importance of finding product market fit
Finding product market fit is crucial for the success of a startup. Without it, a business cannot sell its products consistently and sustainably.
The need to detach from the idea and focus on the problem
Many startup founders become too attached to their product idea and fail to detach themselves and focus on solving a meaningful problem for their target customers.
The value of customer interviews
Conducting customer interviews is vital for understanding the needs and pain points of your target market. Approaching interviews with genuine curiosity and empathy can provide valuable insights.
The significance of reaching out to the right people
When conducting interviews, it is important to reach out to the right individuals who are facing the problem you aim to solve. Cold outreach, referrals, and utilizing platforms like LinkedIn and social media can help find relevant interview candidates.
Identifying and Solving Market Problems
When starting a startup, it is crucial to identify a specific problem or pain point that a small group of people are desperate to solve. Look for a problem that has recently become possible to address due to new technology, and that people are willing to pay a high premium for. By serving this small segment, you can create a bootstrap opportunity where you generate revenue quickly. Focus on removing friction and obstacles for your customers and deliver a solution that helps them make progress. Validate your solution through problem interviews and solution interviews, making sure to iterate and refine as you go. Bootstrap by getting people to pay for your solution and use that revenue to grow and improve your product or service.
The Importance of Market Validation
Startup founders should prioritize market validation before investing too much time and effort into building a product or service. It is crucial to identify a real market need and ensure there is a demand for the solution before moving forward. Rather than building an MVP and trying to push it onto potential customers, focus on understanding the problems and pain points of your target market. Conduct problem interviews to gather insights and map out the steps involved in solving the problem. By identifying what customers want to avoid and what they desire, you can design a solution that removes friction and provides a better experience. Validate your solution through interviews, feedback, and a pitch that includes a call to action and a pricing strategy.
Navigating the Startup Journey
The startup journey can be challenging, especially for bootstrapped businesses. It is crucial to start with a clear understanding of the problem you are solving and the small segment of people who desperately need a solution. Bootstrapping involves finding a market need that people are willing to pay a high premium for and serving that specific market segment. This involves making tough decisions, such as letting go of engineers if the market need is not evident and conserving resources to focus on finding real market opportunities. By validating your market need and designing a solution that addresses a specific pain point, you can bootstrap your business by getting people to pay for your product or service. Be creative, iterate, and adapt along the way to ensure your startup's success.
"Most startup founders don't want to prove themselves wrong. There's an inherent bias, they hear what they want to hear, and they go seeking the information to prove themselves right because they've attached themselves to their idea." -- Kenny MacKenzie
Kenny is an expert in product-market fit and market validation and has been mentoring startup founders for many, many years.
After creating his own startup, raising money, building a product, launching it and seeing it fail because of a lack of product-market fit, Kenny spent loads of energy trying to reflect on those mistakes so he could understand the causes of startup failure and the tactical and strategic frameworks and practices that will improve the chances of business success.
He identified very common types of cognitive biases that early-stage founders will face, such as a lack of product-market fit, false positives, and not knowing what problem you're trying to solve or who you're trying to help. These things lead to errors of judgment that will surely kill a startup.
If you want to be a successful entrepreneur, you need to act like a scientist/private investigator, find the right problems, experiment and learn from customers before you write any line of code or build anything. This will improve your chances of being a successful startup founder.
"You're not a developer, you're not an engineer, you're not an entrepreneur. You're a scientist/private investigator. Think of the market opportunity as a crime, there is a criminal out in the loose and they keep hurting all these different people. You're trying to understand that criminal's pattern of behavior. The criminal is the market need. You're investigating, not trying to force your will on the world. Once you understand a meaningful problem that people have, then you can start being the visionary." -- Kenny MacKenzie
