If you an early stage SaaS startup, there is nothing more important than building a sticky product. The thing thats most important for any startup is to achieve PMF. So this section is all about getting to Product Market Fit.
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Product market fit is when you are in a good market with a product that is much needed.
The explanation, we like the most is from Andreessen: “You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close. And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.” Marc Andreessen
While market research can give us symptoms, user research help in finding the actual problem. It is important that it is not treated as a casual chat but we get a full understanding of the user's problem. The key here is not to make any assumptions and ask open-ended questions in the right sequence and probing from multiple angles. Our user experience team will work alongside you to conduct user interviews and help you understand better the problems that you are trying to solve for your users.
Identifying MVP features can be a daunting task that involves narrowing down on the market and prioritizing with features. While it is easy for the founders to get carried away with catching up with features from competitors and asks from potential users, it is the founder's job to identify those core features where they can obtain quick feedback and iterate faster. We help founders to adopt the appropriate framework to identify the right features for the MVP.
UX in PMF
The challenge we see is most startups are solving for problems which are not pressing enough for user. That's why we help founders with customer validations, by initially identifying the user personas, finding their core needs through interviews, and then building user stories to build a MVP.
Launch and Feedback Loop to achieve PMF
Running the right experiments to get close to PMF is an interesting problem to have. We need to associate a north-star metric to ensure that we are having our experiments within the scope. All the experiments have to go through a phase of build, measure and learn. Priority should be given to those experiments that are easier to build, has an orientation towards the north-star metric, and can derive results within a shorter time frame.
Customer acquisition cost has been steadily increasing for B2BSaas companies. With CAC increasing almost 70% in the last 5years, it is imperative that B2B SaaS should move to product led growth than a marketing led growth approach.
Marketing led growth can help startups build a big top of the funnel, how ever it leads to a higher churn rate in the long run. This is why PLG focuses on activation, retention and expansion as a driver for growth. Even though both PLG and marketing experiments are important for startup growth, PLG helps you stay away from vanity metrics and helps you build a sticky product.
PLG is the center of product, marketing, design, and customer success. While the goal of a PLG initiative can vary depending on the stage of the product, It is important for founders to have this mindset from the beginning.