(2023-12-24) Cohen The Roadmap For Product/Market Fit Maybe

The roadmap for Product/Market Fit… maybe. This eight-step process brought WP Engine from an idea to a Unicorn. While there are other roads to Product/Market Fit, consider copying some of these ideas.

1. Personal Fit: The inner fire, leveraging a personal edge to do what you were meant to do

A great idea or a great strategy that you can’t execute well, isn’t a good strategy for you.

Passion is required; it’s just not enough.

You need to articulate exactly what your passion is, so that you can use it as a filter for business concept.

“Leverage” means yielding a huge output from a given input

Leverage is good, but unique leverage is far better

Often this appears at the intersection of your peculiar above-average talents and experiences, which taken together are unique

the combination of your leverage against your path is uniquely excellent, even for a small number of potential customers.

This leverage + path combination also forms the kernel of your strategy3 as your competitive positioning.

The key question that summarizes this intersection of “you” and “path” is: Why are you the perfect person to build this company?

2. Market Fit: A working theory of why they will buy.

figure out whether your idea works out in the market, in the world of customers, competitors, trends, problems-to-solve, jobs-to-be-done, and products. These things you do not control, and thus must understand, conform to, but also exploit.

You need a plausible theory of the customer, market, and business model

Early strategy

Even better than having a great business model is to have a great business strategy. Not a twenty-page document, but a one-pager that conforms to the guidelines in that article, explaining “how we will win.”

Only by having a specific, strong, clear idea, was it possible to notice what customers really wanted instead

3. Customer Fit: Find the ideal customers first.

Customers can tell you what their lives are like, which is how you validate your business model and strategy from the previous section. Customers can tell you what they won’t buy, which has happened to me repeatedly.

But you don’t want to do this work. You want to build the product because that’s the fun part.

How to interview customers

The customer validation system I’ve developed is the Iterative-Hypothesis customer development method

Find your ICP

Your goal is not only to validate your theory of the market, but to discover ICP (Ideal Customer Profile). This is your “perfect customer” - a segment almost comically over-specified to be so perfect for your product that you are truly the best choice in the market, and they would be crazy not to buy.

You are scared that targeting only the ICP limits your potential market, but this is not what happens. In “Selling to Carol,” I explain the mechanism and provide examples showing that for every ICP there are 10x more people who make similar buying decisions, and 100x more who take more convincing but ultimately also agree. (2011-01-10) Cohen Targeting Perfect Customer

4. Build and ship the SLC. (vs MVP)

Simple

Lovable

Complete

5. Focus more on marketing and sales, less on product

6. Prioritize retention-based product work.

Marketing is where you discover the promise the customer wants you to make, and retention5 is where you discover whether you’re fulfilling that promise.

If customers don’t want to use the product, your “growth” is fake news. It’s not Product/Market “Fit” if the “market” decides “not a fit” after actually using the product.

Remember that your goal is not to discover what unsuccessful customers have in common, because successful customers often have those things in common as well. Rather, it is to find patterns in unsuccessful customers that are not shared by successful customers. Those are the attributes that lead to action.

7. Ruthlessly, methodically, systematically prioritize.

Do this by combining Fairytale Planning with the Rocks, Pebbles, Sand work-prioritization system:

Identify the next milestone.

At all times, be crystal clear about the single most important thing to achieve. (bottleneck)

You have to be executing against the next milestone every day. Write it down and look at it every morning.

Everything else is a distraction to be ignored, or a necessary evil that you should dispatch as quickly as possible

Identify the current obstacle to achieving the milestone.

You must face the difficult truth. Do not pick the obstacle that feels comfortable

Split work into Rocks, Pebbles, Sand

Select the Rock that attacks the obstacle and milestone together

If you can’t think of one that’s good enough, don’t just proceed with a mediocre plan that will occupy the next three months; grab some friends - or better yet, customers!– and brainstorm a better one.

Schedule Pebbles sparingly.

Almost everything should be only “good enough”

almost everything that needs to be done will not affect whether the company is successful

Most metrics should be satisfied, not maximized.

8. Manage your psychology.

This might be the hardest thing you’ve ever done

But you’re not going to do this, are youâ

You have a fun feature idea so you’re just building it.

Perseverance is a virtue, if you’re doing the right work, with the right goals. It’s a vice if it means you’re moving diligently in the wrong direction.

Smart Bear only halfway followed the roadmap

Smart Bear’s first “product” Code Historian was a personal project, built because I want to learn .NET (we would later rewrite everything in Java), built because I thought there was value in the historical record encoded in version control (all products that operated under that assumption failed).

I didn’t talk to customers ahead of time. I did talk to them a lot after they started paying, and learned that many didn’t really want Code Historian at all, but rather they were abusing it to accomplish something else. (customer interview)

all this customer feedback gave me the confidence to rewrite everything from scratch (which everyone says you should never do), resulting in a product called Code Collaborator, which made millions of dollars.

Would I have found the idea for Code Collaborator by interviewing customers using the “Iterative-Hypothesis” method above? No, because I wouldn’t have known what to ask them, and they wouldn’t have known to tell me. I would have discovered that Code Historian wasn’t a good business idea… and that’s it.

The interviews would have stopped everything cold. Does that make “interviewing” the wrong road to Product/Market Fit?

I do think building and getting product into customers hands is far more valuable than conversations

WP Engine followed the roadmap and became a unicorn

That said, with WP Engine I traveled this roadmap exactly.

WP Engine wasn’t the initial idea. The first idea was for a marketing analytics tool with features that Google Analytics lacked

I built just enough software to fulfill the promises of speed and scale, building the first version in 30 hours

The first version didn’t even have a customer dashboard. I took credit cards with the default web-form supplied by the online credit card service, and the rest was just WordPress.

We reached $1M ARR after 18 months

Because I did marketing and sales before even having a product login screen, I was able to launch with 30 paying customers.

We’ve always spent a lot of time on (6) retention. Sometimes years would pass where we wouldn’t add a new feature, because all our engineering time was spent on the challenges of scale and continuing to improve on the promise of speed and uptime. As a result, we’ve had best-in-industry customer retention for 13 years.

High retention due to happy customers, folds back into growth through word-of-mouth referrals and a thousand top-of-class reviews

in early 2012 we hit Product/Market Fit

Do you have to walk this road like Simon discovered with FeedHive and I discovered at WP Engine, or can you stumble onto it halfway through like Smart Bear, or can you take a completely different route and just emerge at the finish line?

Yes to all the above. Everything is possible. But not all roads are equally likely to result in success.