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Pivots: Part 3 | Why most startups fail at finding product–market fit

This is from the lost section from The Growth Hacker’s Guide to the Galaxy. Mark Hayes and I wrote that book a few years back and went deep down a rabbit hole on the topic of pivoting. Before long, we had too much pivoting content and it got cut from the final manuscript. Now it rises like a phoenix from the ashes as a seven-part blog series. Make sure you stick around until Part 7—it promises to raise some eyebrows.


Product–market fit: Pay attention to market data

As you might’ve guessed, achieving product–market fit isn’t easy and many startups fail at the task.

So why do startups often fail at finding product–market fit?

A lot of the time, it comes down to the assumptions that a company has about the marketplace.

For instance, you may have the right customer base, but you might not be targeting the right problem. Or you may be going after a problem that isn’t significant or pressing enough.

It’s important that you pay close attention to the data that your business feeds back to you every day. Within the data, you’ll find vital insights that will tell you how you can get closer to achieving product–market fit.

Now, keep in mind that some companies will still fail at achieving product­–market fit even if they have alignment between the core issues faced by the marketplace and the product that they’ve created.

That’s because timing also plays a big role. This can manifest in a variety of ways.

Timing affects product–market fit

First to market

How does timing affect product–market fit? Being first to market matters.

Consider the example of Socialcam, a company that was bought by Autodesk for over $60 million in 2012. It benefited from timing. One of the reasons it grew really fast was that it was one of the first successful video applications built on Facebook’s open graph.

Because it was first, it was able to capture a large portion of the market that was interested in using a service like the one provided by Socialcam.

Emerging trends

Emerging trends are another way timing influences product–market fit.

For example, one of the reasons Uber succeeded was because it tapped the emerging trend known as the gig economy. A gig economy is essentially one where people can easily find others who can help them meet their needs. Those who want to provide services can quickly earn money by just by joining a platform that connects them to an existing thriving marketplace. These platforms are built in a way that makes it easy for people to earn some decent, quick money by providing something fairly straightforward.

At the time, existing solutions for the gig economy typically catered to white-collar workers who possessed certain skills. However, Uber gave blue-collar workers a way to benefit from this emerging trend. As long as someone could drive a car, they could become an Uber driver.

If the gig economy hadn’t already existed, Uber might have found it difficult to pave the way.

Identifying product–market fit opportunities

Identifying opportunities for product–market fit can be difficult. The trick lies in finding something that’s obviously desired by customers, but somehow overlooked by the competition.

At first, you might think that such a goal is impossible to achieve.

But actually, it’s not too hard.

In most industries, the smaller companies hesitate to go after a big player, and the big companies are too comfortable and fat to take big bets on their future.

This creates opportunities for someone who wants to take advantage of this situation.

It’s important to keep in mind is that it’s hard to see this sort of stuff without getting your hands dirty. In most cases, you have to build something and serve a marketplace before you really get a sense of what it wants.

If you’ve created some novel technology, you need to let people use it before you can really figure out the best way the product can serve that market—or even if this is the right market to serve.

Successful pivots require attention to the market

Pivoting works best when you pay attention and you can only do this once people are actually using your product. As you’ll see in later in this series, the companies that really succeed with pivoting are those that pay attention to what we’ve just covered.

Next in this series

In Part 4, we myth-bust some of the most common myths about pivoting.


Read more in this series

Pivots: Part 1 | Why is pivoting important?
Pivots: Part 2 | The search for product–market fit
Pivots: Part 4 | Some pivoting myths
Pivots: Part 5 | Pivoting: Case studies (PayPal, Flickr and YouTube)
Pivots: Part 6 | Types of pivots
Pivots: Part 7 | A word of warning about pivoting


By Jeff Goldenberg