In-Market Search for Product-Market Fit

Last week, I was listening to a podcast from “Invest Like the Best,” where guest Miles Grimshaw discussed a concept I’ve encountered before, but never described in the same manner. The concept revolves around the in-market search for product-market fit. Historically, product-market fit has been discussed in contexts where new ideas and markets were explored. Entrepreneurs would develop a minimum viable product or minimum respectable product, then iterate and adapt it to the market based on customer feedback.

This notion of market search for product-market fit diverges slightly. The premise here is to launch a product to initiate dialogue with customers and use their feedback to potentially discover even better product ideas. It’s often challenging to engage potential customers without a tangible, functional product to present.

An instance of market search for product-market fit is Pardot. Initially, our product was a Google AdWords integrated landing page designed to generate leads to sell to companies. After building the MVP and generating several leads, discussions with prospective customers revealed a preference for a platform to generate and nurture their own leads. This revelation steered us from a lead generation system to a marketing automation platform, ultimately contributing to the business’s success.

Another example is Salesloft. The first product, “Job Change Alerts,” focused on tracking key contacts and prospects. It failed but led to the development of “Prospector,” a tool to gather contact information from the internet. Although more successful, “Prospector” did not fully meet the goals, prompting the creation of a third product: a comprehensive sales engagement and revenue workflow platform. This suite included a cadence engine and a range of tools designed to enhance sales team productivity, and it proved to be the ultimate success.

In both examples, an initial product was built, failed, leading to successful iterations. The original ideas didn’t pan out, but they paved the way for subsequent innovations, shaped by customer feedback and in-market adaption. Entrepreneurs should embrace customer feedback and be willing to adapt or pivot their products accordingly. Often times, launching an initial product to enter the market and build relationships with customers, while maintaining flexibility to pivot, is the path to product-market fit. The first product idea is almost always wrong.