Why Should Finding Product-Market Fit Go Before Development?


Software development projects are no different than any other product type when it comes to their launch. To reach success and bring profit, a product must have a market fit; otherwise, you’ll be investing in a dead end. After all, if no one needs the solution you’re offering, does it make sense to go through the trouble of its creation?

It might come as a surprise, but the absence of product-market fit (PMF) is the second most common reason explaining why startups fail to succeed. Who would have thought that it comes before product quality and even tough competition in the field?

So why should you do your best to find product-market fit before you begin the development process? What gains can you get by doing so, and what are the risks if you don’t?

Where to Start

Various-sized businesses decide to safeguard themselves from possible failure by going through project discovery. It is a reasonable move as you get to ensure that the product is worth spending resources on before proceeding to the active phase of software development.

Although opinions may vary, the project discovery stage is a crucial step that shouldn’t be omitted. This is your chance to study the market, do your research, and get to know your target audience better in order to mold the product to perfection, determine if it’s a good fit for the market, and how to improve it.

Which Path to Take

During your product-market fit search, you can take several primary steps to prove an idea’s feasibility. These are proof of concept, building a prototype, and minimal viable product creation. Ideally, every step is worth it because each has a different purpose and value. But can you go for just one?

Frankly, of course. It really depends on your project needs. For instance, proof of concept is all about idea validation, highlighting the business interest, allocating pre-product-market fit, and making assumptions regarding the technical side. You basically answer the main question of whether the idea is worth it and whether it can be technically brought to life.

What are the peculiarities of the proof of concept process? There’s a lot of research involved: competitors, users, market state, etc. But for starters, you bring together various specialists who can share their thoughts during brainstorming sessions. Say you have a feature idea that seems like a great solution, but you hear an experienced developer out who may notify you that it can’t happen the way you picture it. On the contrary, the developer may suggest a more optimal path that’ll allow for cutting down costs and saving time on coding from scratch.

Prototypes, on the other hand, have a different purpose. You build a model for visualizing the future product and clicking through its features, following the user journey. You can thus learn about the solution’s convenience of use, and UI choice rationality, and make more informed decisions on whether you should develop the product or not, and how to do so optimally.

Thirdly, the developed MVP is what you show to the world. A minimum viable product is a simple, shrunk-down, and working representation of the solution. You add a minimal feature set and can actually test the product in the real world. Perhaps you’ll get your first clients or investors, make your first profit, and, most importantly, learn more about product-market fit and how to carry on with expanding the solution further.

What Do You Do Next?

Once again, product-market fit can become your safety net, ensuring you’re moving in the right direction. There’s no better way to be certain that your project is worthwhile than to launch the MVP and start analyzing the findings.

Your further steps of validating that the project has product-market fit will involve an even more in-depth analysis. While the activities during the idea validation stage were more hypothesis-based, now you can start collecting data and getting feedback from actual customers. Here are a couple of pointers in this respect.

What Do Your Customers Think?

The opinions of users who interacted with the product you built are a goldmine. Simple surveys, reviews, or more detailed interviews can bring a valuable return.

What do they like about your product? Which issues or problems do they face? By studying your clients’ comments, you may learn many things about what to fix, improve, or scale to make the product better.

Perhaps, there are things you didn’t address (say, your navigation menu lacks a search bar that would solve many customer problems). Or it’s possible that changing a seemingly small detail will bring a lot more user satisfaction (for example, placing an important button in a different part of the screen to make it easier to access will lead to higher conversion).

Keep an Eye on the Metrics

Furthermore, metrics can also give a lot of food for thought about your product-market fit. Such data can signal which areas need improvement and whether your hypotheses are working or not. So what should you pay attention to? Below are several metrics we’d advise to monitor:

  • Number of active users (be it daily or monthly users, their growth or degression may reveal many insights);
  • Conversion rate (shows how many of your users become paying customers);
  • Retention rate (returning customers are extremely valuable; therefore, it’s essential to keep them in the loop);
  • Net promoter score Survey (informs you about how many users are spreading the word about your product, aiding word-of-mouth product promotion).

Final Thoughts

Whether you like it or not, determining product-market fit is a “must-do” before proceeding to project development. It is wise to invest time in this complicated activity if you don’t want to take the risk of draining the budget to build a solution no one will spend money on.

Obviously, there are many things to take into consideration, but truly successful projects usually don’t happen overnight. Therefore, our development team at Upsilon recommends starting with research and building an MVP to get a better understanding of your target audience, their needs, and problems. If your product addresses these issues and brings value, there’s a much higher chance for it to grow, scale, and bring the return on investment you want.

Sure, you can decide to take the shortcut, omitting discovery and product-market fit allocation. But you must be prepared that it may result in a longer development process and the threat of creating something that’ll need a lot of additional input.