Podcast Ep. 23: How to Validate Product-Market Fit

1) A product will only succeed if it solves a customer problem and presents a compelling value proposition.

2) Many products don’t sell well because product managers fail to test them thoroughly enough before launching.

3) Too many companies focus more on promoting a product and less on ensuring its functionality, especially during the post-launch phase, and so the product fails.

You can listen to this episode and many others on our podcast website, Masters of Product Management, or on Apple Podcast, and don’t forget to subscribe!

MPM 023: HOW TO VALIDATE PRODUCT-MARKET FIT

[00:00:15] Steven: Welcome back, everybody, to another episode of Masters of Product Management. I’m not going to tell you anything new, but I really want to make it very, very clear. I think I say this on so many of my broadcasts that no product is ever going to succeed if it really doesn’t solve a customer problem with a really compelling value proposition and unique competitive positioning. And, of course, there’s a point where the rubber meets the road and you really have to make sure that the product is fit for purpose and that it works and that the intended customers can easily use it.

[00:00:55] Now, in a recent episode, I talked a lot about testing. But what happens is—and this is based on research from my company, Sequent Learning Networks, as well as my work with my clients—and that is product people just sometimes gloss over the real testing that needs to be done. I really want to plant this seed in your mind.

[00:01:22] Why is it? Why is that we’re not testing to the degree that we need to?

[00:01:29] Sometimes, it’s because the user story that we were working off of didn’t have the hooks to get it validated or tested, or maybe the customer’s journey is just not clear. And that’s just one tip of the iceberg.

[00:01:46] And again, if the product doesn’t meet the needs of the intended customer, even from a functional standpoint—it doesn’t look good or feel good or delivers a crappy experience, or it doesn’t deliver on the brand promise—then this whole idea is going to sink like a boat anchor.

So, to shed some light on this really important dimension of product management, I’ve invited Nader Balata to the show to talk about user testing. He has launched some pretty outstanding products and, as he admits, some clunkers!

He’s passionate about product management and specifically about taking a business or user problem and building the right product. He’s built an award-winning iPad app for pilots, a custom reporter for one of the biggest energy companies, and a video portal for a large bank, and is now a product manager of social media apps. So, Nader, I’d like to welcome you to the show.

[00:02:40] Nader: Thanks for inviting me. I’m actually a big fan of your podcast, and you contribute to a lot of product management community, so I hope I can help a little bit.

[00:02:49] Steven: Well, that’s great. Could you share with our listeners some of what you’re seeing in the market and tell us how you’re feeling on this topic of testing?

[00:03:01] Nader: To give the listeners some context: I work in a startup incubator in Toronto, and that means there are sixty other startups that are working in the same building as I am. We are all trying to build an MVP and get product-market fit pretty quickly. But what I’m seeing is a lack of user testing, which is another way of saying validation of your product, specifically at the post-launch stage. So, at the post-launch stage, while you’re trying to get product-market fit, I’m just not seeing a lot of companies focusing on user testing. What I do see is a greater focus on scale. You hear it all the time: build a product and you can scale; you’ve got to grow. It’s a higher focus on growth than it is about scaling.

[00:04:10] Many people sight read Hoffmann’s core device around getting to scale. And that means more on the promotion rather than the actual quality testing of the product.

[00:04:22] Steven: This is really critical. You mentioned the term “product-market fit,” which is essential in the fulfillment of any of your strategic goals, and you talk about strategy and usability and things like that. Can you talk a little bit more about this product-market fit and kinds of testing that are required? I’d love to hear some of your thoughts on that.

[00:04:47] Nader: I simplify it into two simple steps. And as you know, product-market fit is a really long and painful process, but core to this testing are these two things:

[00:05:02] Number one is testing for strategy, and that is to say that you’re [00:05:06] testing your value hypothesis. You may have built that value hypothesis six months, a year, or nine months before, and you want to [00:05:14] really ensure that the core features still address the needs of your target market. Because obviously in our tech world, [00:05:24] things can change so quickly and competitors can arise when you don’t even know it, so you want to always be testing for that.

[00:05:33] The second thing is the most obvious one, which is testing for usability. And that is to say that you’re testing your user experience—so things like successful execution of key tasks, user flows, elements of the UI, and clarity. Is this easily learnable to somebody? Those are the two things.

[00:05:53] Steven: I have to tell you—this is really a side comment—I can’t tell you how many products that I interact with that you’re wondering, “Are the product managers, or the people who are putting these products in market, paying attention?”

Because I feel like they’re not paying attention to me. They don’t fully understand or embrace what I’m trying to do and things like that, and it really gets to me. And sometimes you just suck it up, but I don’t think the customers deserve this. And I feel so passionately about getting a product to be used the way it’s intended to be used that when I had product managers working for me in my corporate life, I wanted them directly involved—not only in designing some of the testing schemes but getting involved and banging on the system.

There was a point where the documentation and the user testing were not even in line with one another. There are so many different moving parts, especially in big companies, anyway, s. I do digress. But I know what my point of view is on product managers involved in testing. What’s yours?

[00:07:08] Nader: I agree with what you’re saying, and the one thing that I try to point out to other product managers—people who are in the same stage—is to look at companies that you really admire. The easier ones are Apple, Google, Facebook, and they are perpetually testing through analytics, different versions of the product. So, for example, with Facebook, there are probably 10,000 different versions of Facebook running at a given time, believe it or not. Or they’re just getting qualitative feedback.

Just the other day, Google sent me a beta notification asking me for feedback on YouTube. They have over a billion monthly active users, but it just shows how much they’re [00:07:54] always looking to improve the experience.

If you see their surveys, and you see what they’re looking for, they’re not just testing for usability; they’re still testing for strategy. And that testing and validation are synonymous with acquiring feedback.

[00:08:14] When you are testing and you’re hearing from customers, you may not be getting the level of testing that Google might be able to, of course, because they have volumes of customers and can run a test very quickly—but at least you get some directional certainty with what you’re designing, even if you’re marketing. And the great thing is that you can pivot to fixing a problem much sooner than you realize.

[00:08:39] Steven: It’s interesting—as you were talking, I was thinking about that mass-market testing where companies like Facebook and Google have so many users active at any one point in time, and they have huge data collection machines, and probably a lot of artificial intelligence that runs underneath it, that they’re able to learn. But in a lot of organizations, they don’t have that kind of data. They don’t have that velocity of information that will allow them to make better decisions or actually to learn.

[00:09:14] Nader: Right.

[00:09:15] Steven: And if there’s anything that I think is so critical—especially in this age of more advanced technology products—it’s that everybody is iterating to get stuff out the door, but I don’t think people are iterating enough on the learning that’s necessary to get that stuff done. And even though it’s a bit of an editorial comment, I think that there’s a degree of truth to that. Do you have any thoughts on that?

[00:09:43] Nader: Yeah. It is obviously a matter of resources. Testing for strategy—which is really saying, the core problem that we were trying to solve—is it’s still valid in the market? That’s actually really not that hard to do. It’s certainly not as difficult as people make it seem to be. It’s just a matter of  when you have launched your product—you’re in post-launch here—to go back to a number of users, whether these were your early adopters or influencers, or your beta users, and ensuring that “OK, You said that this was a problem. Does this solve it? Does this address your problem? And if not, how doesn’t it address it?” To oversimplify, that’s the easiest way of doing it.

[00:10:53] Steven: Sure. I hear what you’re saying. I like to ask this of all my guests: what are some of the top lessons that you would offer to product managers to be more successful in this area?

[00:11:10] Nader: Number one I would say—you want to ensure that your value hypothesis is still important to your target market. Again, this will tell you that you’re onto something; and you can just iterate, which is a great place to be.

Or worse—and in a way a lot better, will tell you that your market isn’t right, or getting it. It is a harder path to go down—the product marketing, which is getting growth and then having to iterate three or four months down the road after spending a lot of money on dev and whatever other costs you may have.

[00:11:48] So, that’s actually not so bad, so we can pivot and make that radical change. And this will obviously save you a lot of time and money. And when you are strictly a smaller company, the two most precious resources are money and time.

[00:12:06] You know, when you are a large company and you have a lot of customers that are entrenched, you have a little more time; but when you are building an MVP and you are a startup, there are probably so many adjacent technologies where people can use a different solution and multiple solutions for whatever your product is.

[00:12:33] The second thing I would say is that doing usability tests is really important. I mean, you should be doing this all the time—but especially when you have a market-ready product, you want to be doing end-to-end testing to ensure that people are flowing through every aspect of the app as you intend.

As an example: most companies now use Facebook, your social login. And the reason they do is because creating an account, that onboarding process, is way harder than you think. And I know, I built a few apps with my own log-in and it is so much easier to use a different solution. So even something as rudimentary as onboarding, just signing up, can be really hard for most users.

[00:13:22] And a part of doing the usability test is to understand that the core functionality is still important. You want to see what is driving engagement, and obviously, you want to get to retention. And just because you tested parts of your app two months ago, things change very quickly in the marketplace, so you want to be able to do that sooner rather than later.

[00:13:51] Steven: I’m reminded of the movie Field of Dreams. “If you build it, they will come.” Well, it doesn’t necessarily mean just because you test it they’ll buy, but there will be a better chance that they’ll do that.

[00:14:09] Nader: To your point Steven, even if you may have done some user testing upfront—some conceptual one—even before you wrote a line of code, you said, “If I build this product that’s going to solve these three problems, would you use it?” And invariably, every product manager will say, “Yeah, you know what? People said they’re very excited about it!” Okay. Now, you launched. Will people actually use it? So there are two different things there.

[00:14:34] Steven: That’s great. So, a couple of things I want to do to wrap up for our listeners. These are some key points.

This point behind product-market fit—I can’t emphasize enough that every strategic goal that any product manager puts into place has got to be really focused on whether or not you can solve the problem for the customer, compete in the marketplace, and deliver a value proposition. And it’s all essential to the fulfillment of that strategy.

So Nader, I have to tell you that this is a really positive, positive spin. It’s critical for us as leaders, and as I would say even thought leaders, that when we’re talking about these topics for product managers to really take some of this stuff to heart.

And what I mean by that sometimes is you’ve got to just sort of slow down and say, “What is it that we’re really trying to do?” “Whose lives are we really trying to impact?” “How are we going to make the customers’ journey better?” And sometimes we’re running to the wall to get this stuff out the door, and we’re just not taking the time.

[00:15:53] Anyway, I’ve got to thank you. Thank you for spending the time with us today on this really, really important topic. I hope, everybody, that you’ll be continuing to listen to Masters of Product Management, and we’ll see you the next time.

To learn more about the podcast, Masters of Product Management, visit our podcast website www.MastersofProductManagement.net or find us on Apple Podcasts and don’t forget to subscribe.

To learn more about our guest, Nader Balata, we have linked his LinkedIn profile for you.

To learn more about the action-based workshops that Sequent Learning Networks provides to organizations, please visit our Corporate or Public Workshop pages.