Finding Product Market Fit While Navigating Category Creation: Product and GTM Learnings

Finding product-market fit can be challenging, but creating a new category of software and finding product-market fit is even harder. However, with the right knowledge and approach, it can be accomplished.

For the past six years, Sam Awrabi has been at the forefront of creating the MLOps Market, successfully taking a dozen companies to market in their journey to find product-market fit and creating new software categories.

Drawing on my combined expertise and experiences, both successes and failures, I compiled a list of actionable tips for those seeking to navigate the complexities of finding product-market fit and creating new software categories.

Avoiding becoming a stuck consulting business

Avoid taking on the heavy lifting of a narrow and challenging product or R&D task can be mistaken for finding product-market fit because companies are willing to pay for professional services. To avoid building a consulting business, it is important to clearly have confidence in the following questions before taking on custom professional services work:

Developing a clear path for converting open-source users to paid users

Often, founders drive decent open-source traction and mistakenly assume that this will correlate into revenue. However, for revenue to happen, there must be a thoughtful and high-value customer journey that incentives users to want to pay. A simple way to measure this is by determining whether you are pulling your open-source users into paying or whether they are pushing themselves to pay and pushing you in the process. If you are pulling users, it is a sign that the user and value unlock journey has errors in it. To avoid this from day one, have a plan for the differences between your open-source offering and paid offering. The table stakes are single sign-on, support, advanced deployment options, and scale. The holy grail is unlocking team and company-wide productivity, collaboration, cost savings, and improving the current status quo by a large margin, which is only offered in the paid version of your software.

Timing when entering a market

It can be difficult to know the right timing and some founders may have an innate ability to get it right. However, being too early or too late in entering a market can have significant negative effects on a company.

To avoid being too early, it is important to understand the likelihood of potential end-users changing and committing to new behavior and a new way of doing things with your software, even if you build every feature possible, and do everything well with sales and marketing. This is often referred to as “propensity” in territory planning for large sales teams, which is determined by looking at historical data. However, as a founder trying to create a new category, you have zero historical data to go off of, thus you have to be able to do propensity planning of the market in reverse order with a high degree of accuracy. Being brutally honest with oneself is very helpful with this.

On the other hand, not spending enough time researching the market before starting a product or company can also be detrimental. Some founders may raise significant funding and hire many people only to find out that the market is already crowded with competitors, and any chance of building a scalable business is slim. Simple steps to take include identifying all competitors including the status quo of your customers doing nothing. Once that is clear then understand the three reasons you will win the market and understand why your competitors are inferior to your planned approach. This level of diligence and understanding is often overlooked but is crucial for success in a crowded market.

Prioritizing time-to-value in product development

in SaaS, time to value is highly correlated with success. Even great products can fail if it takes too long to integrate, test, and deploy.

When developing your product, focus on minimizing the time it takes for customers to see value in your product. This can be achieved by ensuring that the product is easy to integrate and deploy, as well as by providing clear and concise documentation. Additionally, providing tools and resources to help customers get up and running quickly can also help to speed up the time-to-value. Additionally, user onboarding and product education can be a key part of making sure that users understand the value that product brings in a timely fashion.

Overall, it is crucial to balance the need for a complete feature set with the need to deliver value to customers quickly. By finding the right balance, you can increase the chances of success in finding product-market fit and creating new software categories.

Focusing on building a feature set that is needed at the time of purchase, and avoiding building features that are unnecessary is crucial for success in finding product-market fit and creating new software categories.

It sounds simple, but at the earliest stages, it is common for founders to confuse being busy shipping features with being busy shipping features that users want and need.

It’s important to validate that the feature set is needed, usable, and that when built, it will be a top priority for the end-users to test and adopt. As a founder, you should constantly be gathering feedback from your users and using it to inform your development roadmap.

It’s also important to keep in mind that not all features are created equal. Some features may be more important for users than others, and it’s important to prioritize the features that will have the biggest impact on user satisfaction and retention.

It can be tempting to add a lot of bells and whistles to your product in order to stand out, but often, keeping things simple and focused on core functionality can be more effective in the long run. By focusing on delivering value through a select set of key features, rather than trying to be everything to everyone, you can increase the chances of finding product-market fit and creating a new software category.

Another area to avoid when trying to find product-market fit and create new software categories is the belief that an “all-in-one” offering will work. This often leads to a bloated product, complex and ineffective go-to-market (GTM) strategy, and ultimately being a “jack of all trades and master of none.”

When building a feature, feature set, or product, it is important to strive to make it the best in the market and to continue to improve it to remain the best. A better approach is to focus on a specific niche or problem and excel at solving it. It’s also important to understand that a product that tries to do everything is not going to be as good as a product that does one thing extremely well. It’s also more likely that an all-in-one product can’t be the best in all its aspects.

A more effective strategy is to identify the core problem you are solving and focus on doing that exceptionally well. Instead of trying to be everything to everyone, you can specialize in a particular area, and be known as the go-to solution for that specific problem. By doing this, you can increase the chances of success in finding product-market fit and creating a new software category.

Striking a balance between vision and validated product needs is crucial for success in finding product-market fit and creating new software categories.

Many founders struggle to strike the right balance, resulting in a lack of traction.

On one hand, some founders have grandiose visions but fail to back them up with a clear product roadmap, leading to a messy and hard-to-use product, and often causing a dysfunctional startup environment and team. Vision is great and useful only if it’s paired with world-class execution. It’s important to have a clear plan in place on how to get to that vision and to have a good understanding on how to execute it.

On the other hand, founders who lack vision fail to innovate and create new categories or get stuck copying others for ideas. A lack of vision can cause a startup to lack direction and fail to create something truly new and valuable. It’s important for founders to have a clear idea of where they want to take their product and what problem they want to solve, as well as to validate their ideas through research, testing, and gathering feedback from potential customers.

Overall, striking a balance between vision and validated product needs is crucial for success in finding product-market fit and creating new software categories. It’s important for founders to have a clear idea of where they want to go and how they want to get there, but also to be flexible and adaptable, and able to make course corrections based on feedback and customer needs.