January 16, 2019

Why Product/Market Fit Isn't Enough

My all-time favorite framework for thinking about validating and growing your business comes from Brian Balfour, the former VP of Growth from HubSpot. So I figured I'd talk about it a bit, and ask you all to think about it as well.

Brian's framework goes beyond mere product-market fit by adding two more variables into the mix. In total, he calls them the four essential fits: Market-Product Fit, Product-Channel Fit, Channel-Model Fit, and Model-Market Fit. It sounds complex, but it's fairly straightforward once you read about it.

The point is: you need all four of these to build something significant. Having a good idea for a product alone does not mean you have a good idea for a business. You need to figure out your market, your business model, and your channels as well.

I didn't know anything about this framework when I first started Indie Hackers back in 2016, but here's how I might retroactively apply it:

  1. Market-Product Fit. The market for people who want to start online businesses is obviously huge. There was strong evidence on Hacker News that these people really liked learning from detailed and transparent case studies, so I figured my interviews would be a hit. I was also part of the market I was targeting, so I could use my own judgment to tell that my product would be a good one.
  2. Product-Channel Fit. I knew that Hacker News was a huge channel, and that the people there would like that product I'd be putting out, because they were already upvoting similar things. Unfortunately, I didn't have any other channels mapped out at the time, and it was difficult to find any later on. It's something I've continued to struggle with as IH has grown.
  3. Channel-Model Fit. My business model was advertising. This meant that I'd need to get lots of eyeballs if I wanted to make significant money. This ruled out various channels where it's too expensive or laborious to get lots of visitors, e.g. paying for ads, doing sales, speaking at conferences, etc. I knew I'd have to nail content marketing, which limited me to channels like SEO, online communities, social networks, press, podcasts, and the like.
  4. Model-Market Fit. My goal at the time was for IH to simply pay my rent. It was fairly obvious that the market would be big enough for me to do that via advertising, even if I only captured a miniscule percentage of it. That worked out in the end. I believe I was making around $6k/month in ad revenue before Stripe acquired IH in April 2017, and I was averaging fewer than 50k unique visitors/month with a ton of room to grow.

This was fun to do. 馃槤

What do you think about this framework in comparison to others?

How does it apply to your current business?

  1. 1

    This really is excellent! I hadn't come across it or Brian Balfour before. It's now my favourite startup framework too. Thanks for sharing it Courtland.

  2. 1

    Awesome. Pretty much all you need to know to have a proper startup strategy and not waste time.