Product-market fit is not enough anymore. You need position-market fit:
There was a time, not too long ago, where in startupland one could build a thing that solved a real problem, put a price tag on it, and see if the market wanted it:
• If they did, then we would have said he had found product-market fit
• If they didn’t, we would say he didn’t and it was “back to the lab”
That time, for better or worse, is long gone.
Here’s how @0zne and I break it down:
In 2024, a utility provided through software can’t make a dent effectively anymore. People’s heads are overstuffed with competing products, messaging, and narratives. It’s hard for a product alone to get a market edge.
The main exceptions are new tech or hyper-niche markets. ChatGPT, for example. But that is a rare instances of breakthrough technology where the “product” itself carries the bulk of the impact.
Most companies don't have that luxury and are not in such a position. So, if a product alone isn’t enough, then what is enough?
Enter position-market-fit.
• If “product-market-fit” means that you’ve found the right kind of product that the market wants…
• “Position-market-fit” means that you’ve found the right combination of product/brand/marketing/pricing/go-to-market/sales/etc in a given domain.
The Importance of Brain Estate
The fundamental reason why “position-market-fit” is so important is that it operates more at a personal and subconscious level. Our brains can only conceptualize a finite set of “characters'' per domain.
Similar to the "Dunbar number" rule, which suggests we can maintain stable social relationships with up to 150 people, our brains are wired to understand only a finite number of company-market associations.
Gaining a strong positional edge, or nailing “position-market-fit” is the exercise through which a company, with the right combination of product, brand, pricing, marketing and go-market is able to conquer a certain portion of consumer “brain-estate.”
The Story of Startup Success
If you step back and analyze some of the best startups from the last decade, you'll see they excelled at this.
→ Are you building in an established market dominated by large incumbents with feature-bloated, slow, and clunky software? In that case, you might want to position your product as a speed-first, high-craft, premium option, similar to a luxury car company. Does Linear ring a bell?
→ Alternatively, if you're entering a highly commoditized market dominated by a few corporate-looking brands, consider positioning yourself as the quirky, fun company that doesn’t take itself too seriously. Embrace the David vs. Goliath narrative with bold, edgy marketing and design. Does Arc Browser come to mind?
Their pricing strategies are almost a second-order effect of their employed market positioning.
And that’s the power of position-market fit.
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One of the secrets to make better product decisions:
"If it isn’t a clear yes, then it’s a clear no."
Prioritization is one of the most important skills in product management. There are always more ideas than resources, more problems than solutions, more features than benefits.
How do you decide what to work on next?
There are many frameworks and tools for prioritization, such as RICE, MoSCoW, Kano model, etc. But they all boil down to one simple principle: if it isn't a clear yes, then it's a clear no.
What does this mean?
It means that you should only work on things that have a strong positive impact on your product goals and metrics, and that are aligned with your product vision and strategy. Anything else is a distraction, a waste of time and energy, or worse, a source of confusion and frustration for your users and stakeholders.
How do you know if something is a clear yes?
You need to have clear criteria for evaluating your ideas and opportunities. You need to have data and evidence to support your assumptions and hypotheses. You need to have feedback and validation from your users and customers. You need to have alignment and buy-in from your team and organization.
If you don't have these things, then you don't have a clear yes. You have a maybe, a possibly, a hopefully. And those are not good enough for making product decisions.
"Don't Make Me Think" is one of the most underrated & ignored growth levers.
It's not "just" a UX concept.
It's an investment program - that's about minimizing cognitive load for users and prioritizing UX from a first-principles.
But how do you implement it?
I broke it down with Director of Product Growth at @Houzz Kunal Thadani.
There are 5 key principles:
Key Principle 1 - Solve the Core Problem, Not the Symptom
Sometimes, solving the core problem means doing less, not more. Remember Dropbox's legendary MVP? It wasn't even a product. Just a video. Overnight, 75K people signed up.