Reaching a Market Validation, a softlanding approach
Get Ready to Scale Up in Europe
Let’s get back to the basics. If you have read the startup bible – Lean startup Book – you will get a clear understanding that before you bring your idea to the market and check its viability, you need to test and validate if your customer is ready to buy and at what price he or she is willing to pay.
Once you get over it, you will need to come up with a first iteration: starting hypotheses and gaining invaluable feedback from the market – simply put, a prototype. An MVP stage is then reached when the market gives you that feedback that you’re aiming for. And this is the most common problem, because entrepreneurs and investors are often talking about “launching an MVP” when in fact MVP is just a stage of product development.
Conceptually, an MVP should be a truly “minimum viable product”. It must include “some” features to get customers, not only to use but also extracting “some” value from it. Whereas the final goal of the MVP stage is to make sure an idea has some degree of market viability, the Product/Market Fit phase is primarily focused on customers! To get on to product/market fit, startups need to move to the following milestones as well: scale customer adoption, test distribution channels, discover their revenue/unit economics to find profitable customer segments, and streamline their business model.
When the startup reaches this stage, it enters the Product- Market Fit. It can be described as the starting engine of your business by marketing and selling your product, as well as building out the team and operations. That’s when you need to start paying attention to KPIs (Key Performance Indicators). Product- Market Fit stage involves measurement and never-ending fine-tuning, including metrics that are not available before an MVP has been reached.
From my personal experience, how can it be noticed if you have achieved product/market fit? I believe it can be seen when startups start to get sales requests popping in, the competition will start all over the place, investors interested to follow up or get in touch, and a lot of news in the media about your startup. From a strictly business point of view, startups need to assess the market size, focus on hiring key team members, set up operational processes like sales operations, and improve product/service while testing additional features.
In short, we can split the different STAGES into Prototyping (focus on conceptualization), MVP (focus on validation) Product/Market fit – (focus on the business model), Scaling – (focus on building up the business means the average unit cost of output decreases with the production increases.