In today’s episode of The Startup Chat, Steli and Hiten talk about product/market fit of popular products.
Product/Market Fit is a common concept that is used a lot in the startup world. According to Marc Andreessen “Product/market fit means being in a good market with a product that can satisfy that market.” Understanding this concept is hugely important because when your users understand and use your product enough to recognize it’s value, it is a huge win for your startup.
In this week’s episode, Steli and Hiten talk about what product/market fit means, what Hiten’s new show is all about, where to check out the new show and much more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:35 Why this topic was chosen.
02:00 What Hiten’s new show is all about.
03:03 One thing that gets Hiten really excited about the new show.
04:57 Steli’s reaction to the new show.
05:05 Where to check out the new show.
06:11 One interesting thing about the research that was done for the show.
07:29 The second interesting thing about the research that was done for the show.
08:26 The importance of differentiating your product.
3 Key Points:
- If someone is using a document app for less than a year, that company doesn’t have product/market fit.
- You need to figure out what you need to do to get product/market fit.
- People don’t get invested until they’re like a year into the product.
Steli Efti: Hey everybody. This is Steli Efti.
Hiten Shah: And this is Hiten Shah. Today on the Startup Chat we’re going to talk about product market fit. And the reason we’re going to talk about it is because I’m doing a video show. So the first time I’m on video on a show. There’s like eight episodes of seeing me talk with my friend Patrick about basically product market fit of popular products. What we did is we took this sort of now very popular question, and a whole bunch of other questions, and asked people these questions about certain popular products, including Netflix and Evernote, and a bunch of others. The website is at producttradeoffs.com and you’ll be able to sign up via email and you’ll get every episode. Now that I got that out of the way, Steli, it’s really fascinating. This is something I’ve been wanting to do for a very long time, since I had first learned about the magic question that Sean Ellis, who is one of the people who coined the term growth hacker, he is the one and popularized the whole idea of growth hacking and all of that. He has this question and he uses this question to help companies like Dropbox and Xobni and Eventbrite and a bunch of other companies when he was sort of interim VP of marketing at those companies. And the question here is how disappointed would you be if this product no longer existed? And it’s a multiple choice question. It’s very disappointed, somewhat disappointed, not disappointed at all, are the three options. He’d asked this question of the customers that use a product. And his idea is that if a company has 40% or greater respondents saying they’d be very disappointed if the product no longer existing, the company essentially has product market fit. It’s just something he came up with, and this was like back in 2009 that he actually shared the methodology, and this was after he had helped some of those companies I mentioned. So we just decided to go survey thousands of people for each of the companies. Hundreds in some cases, but usually thousands of people for each of the companies. And did a whole video show, I think it’s about 20 minutes roughly each, talking about what we learned. So we learned about why people love and hate Evernote. We learned about why people love and hate Netflix. Not that many people hate Netflix. And the value props around it. We also asked Net Promoter Score for these products. I’m not gonna share any of the stats or any of that stuff, but like the one thing that gets me really excited and is that now there will be a whole bunch of content about the value that people can get from asking this question and learning from their customer base. So it isn’t these popular products, in my opinion. Obviously, it is, that’s what we talk about. It’s really about shedding light to product people, founders, CEOs, marketers, whoever cares to understand their own product better, how to actually do it, what you can learn from this process.
Steli Efti: Awesome. Number one, let’s address the elephant in the room.
Hiten Shah: What’s the elephant?
Steli Efti: I am somewhat a jealous person, especially over people that are important to me. So when this show was announced, there was a lot of Twitter talk, a lot of people making comments one way or another. Now Hiten has an even more attractive cohost to do episodes with. Then there’s video. You guys are sitting together and I’m thinking about the old good times when we were sitting in a balcony in Palo Alto and drinking coffee together and recording these episodes. No.
Hiten Shah: Wait, wait, hold on.
Steli Efti: What?
Hiten Shah: Hey. Hey, wait. Hold on. Nobody can replace you, my friend. This is 400 episodes. I only did eight with that guy. Okay?
Steli Efti: I love that. You’re so smart and cute that you use like that guy for Patrick. I appreciate that. No. I mean if there’s one person that I’ll share my amazing podcast cohost with, for even a short period of time, that’s definitely Patrick. You guys have been friends for a long time and he’s an amazing dude. So I was happy about it. I thought I’ll throw some smack into it.
Hiten Shah: I like it.
Steli Efti: There were some Twitter debates about you having another cohost, but I thought it was funny.
Hiten Shah: Too good.
Steli Efti: Now that we’ve got all my relationship issues out of the way. I love everything about the format, kind of having a season, the episodes that you guys have done, the topic is super compelling. So everybody make sure to go to producttradeoffs.com, dope domain, put in your email, you get access to these episodes. Super entertaining, fun, and educational. Now, because our audience is really important and a lot of our audience is going to be and probably already has already watched trade offs and product trade offs, what are maybe just like two nuggets that we can share with people to listen here that came up in the discussion ,as you guys were looking through the super popular products, that were either surprising or counterintuitive or compelling in one way or another? Something that stands even out to you as a product nerd and absolute powerhouse when it comes to knowing about all these products and how people feel about them and how they use them.
Hiten Shah: Yeah. I’m going to share, because we’re on our podcast. So I’m going to share some stuff that I’m not going share any other place.
Steli Efti: Boom.
Hiten Shah: There’s two I found interesting. Some of the apps that we did are document apps. So we did G Suite and Microsoft, and we did Evernote as well. So we did a few of these, because they’re very popular. One of the things we learned is that these document apps have this effect where if someone’s using the document apps for less than a year, they don’t have product market fit. The product market fit score isn’t 40% or higher. When people start using it, basically year one plus the products have product market fit.
Steli Efti: Interesting.
Hiten Shah: If you’re Notion, Coda, Air Table, and any of the other products in the space of a document app, you need to know that. You need to know that you might not have fit until a year into people’s usage of your product. Or you might need to figure out what you can do to have fit faster. There’s a lot of theories around that, but the main theory that I would have is that people don’t get invested until they’re a year end to the product, because not enough of their stuff is in there.
Steli Efti: That is crazy. It makes so much sense, but it is counterintuitive. Yeah. You would never think that you would have to wait for somebody to use a product for a whole year to be like a real committed user and customer.
Hiten Shah: And then another one that was really big in that same space is when we looked at G Suite, aka Google Apps, aka they’re going to come up with a new name at some point soon. Right? But G Suite, when we looked at it, the reason people would be very disappointed if it no longer existed was because of Gmail. And that’s really interesting.
Steli Efti: Interesting.
Hiten Shah: Again, another obvious one, somewhat counterintuitive, but obvious. What that makes me think is, look, G Suite is a lot more than a set of document tools. It’s the email that really makes it really sticky.
Steli Efti: Yeah.
Hiten Shah: Nobody said that about Microsoft. I don’t think they like Microsoft’s email. But Microsoft is also quite a bit older, the Office Suite and things like that.
Steli Efti: Yeah.
Hiten Shah: Another thing is when you do some of these products that are really popular, Microsoft has a lot of different products and stuff like that, and so does Google. At least with Google it’s called G Suite, so it’s a little bit more obvious. That also gave me an appreciation for the fact that Google went from calling it Google Apps to calling it G Suite, because the differentiation of G Suite versus what we know Google as is pretty powerful. I know what G Suite is and I know it’s not google.com. When it was Google Apps, actually it was a lot more confusing, because you still have Google in the name. It’s a whole completely different category of product. It’s not a search product. Right? It’s not something where I type in a box and I search. It’s actually a whole suite of tools for my personal life or my business.
Steli Efti: Love it. All right.
Hiten Shah: Just a couple nuggets for you.
Steli Efti: There you go. These are super compelling, interesting nuggets. There’s a shit ton more of those. I’ve watched, I think, four episodes, so I still have to work through the entire season of the show. But we’ll wrap it up here. Everybody that’s listening, if you want more, if your like, “Well, I want to know more about product market fit. I want to learn more about how to become a great product thinker and product mind, how to do this better, how to survey our users and customers and understand them better,” you know where to go, people. Producttradeoffs.com to sign up for the brand new season. The one and only Hiten Shah and Patrick Campbell, you know, that other guy. Enjoy the show. And enjoy more Hiten in your life, for sure. That’s it for us for this episode. We’ll wrap it up and we’ll hear you very soon.
Hiten Shah: See you.