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Seven Steps For SaaS Startups To Assess Product-Market Fit

Bhaskar Ahuja is the founder of Originscale Corp, a serial entrepreneur and product manager who specializes in startup product management.

Being knowledgeable about your product’s scalability is crucial. This is mainly because trying to scale before having a solid product-market fit may shatter your product’s future. This leads to a waste of time and money to scale an unsellable product. Even the most ambitious SaaS startups frequently struggle to determine whether their products are ready to go to market. This is where product-market fit comes into action.

What is product-market fit?

Product-market fit refers to a product that is properly suited for the market in which it is sold. To be more specific, it is when your product and the market complement each other perfectly and create a perfect demand and supply combination.

When is the right time to scale?

So how do you determine if your decision to scale is a premature one? Although there are many variables that must be fine-tuned to achieve product-market fit, there are fundamental criteria that SaaS executives should examine before launching any product.

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First, start by asking yourself if the market you are targeting truly needs your product/service? If that is the case, ask “why?” In this regard, you want to be certain that there is a genuine need! Before starting a SaaS firm, conducting a product-market fit survey has become a normal practice among most software entrepreneurs. Product-market fit can provide a precise understanding of how your product will perform in a certain market.

However, as the co-founder of an AI-powered operations platform, I think it is worth noting that determining this fit is a never-ending process, and you will continue to learn fresh information even five years after your market debut. Don’t expect to receive the entire map in the first analysis and then be able to run the same facts for the following 50 years. The requirements might change every month. Staying up-to-date is the key here.

Here are seven steps for SaaS startups to assess product-market fit.

1. Create a target market list.

First and foremost, you must create a list of your target market. You want to know who actually needs your offerings. A suitable list can be constructed based on a classification of demographics. Determine the demographics of your target market, such as:

• Age.

• Gender.

• Income.

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• Location.

• Lifestyle.

To begin building the list, you must first define your target market. This approach will provide you with a specific target audience on which to focus your efforts and carry out your subsequent marketing actions.

2. Identify your target market’s needs.

The next difficult step is determining what your target market’s true needs are. After you have established a clear target audience, analyze their fundamental pain spot based on factors such as their age and lifestyle. This will essentially determine what you should supply them; you need to determine what is upsetting them and what they want from you.

3. Create a valuable and practical survey.

Next, conduct a survey to question your target market about their wants and how they would like your product to help. This will help you understand your market much better. Come up with very specific questions to be answered. You will need direct and to-the-point questions to design a great survey; this can help you get some decent answers. Here are some pointers.

• Divide your survey into sections.

• Select no more than three categories of questions.

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• Make your form easy to understand.

• Keep answers definite.

4. Analyze survey data.

Now is the time to look through the responses you have received. Carry out your analysis thoroughly, and look for strong and useful findings. You can use tools like Google Forms, Microsoft Forms or other online survey builders to automate, simplify and speed up the analysis. Keep an eye on all factors for a more accurate analysis.

5. Create a sample product.

After you have figured out who your target market is and what they want, make a sample. At this point, you know what you are selling and to whom you are selling it. I think the best technique is to construct a prototype for your product so that it can be tested and observed before it is released to the general public. This can help you brush up on your research and give you a better sense of what you want to pursue. This will also allow you to make all of the necessary adjustments and upgrades to your product or service. Also, once you have finished constructing a prototype, get it tested by professionals or experts in your sector.

6. Improve your product.

Once you have built the prototype and tested it in the appropriate market, you will be able to see where your product falls short. Now is the moment to improve your product’s value.

There are plenty of methods to improve the value of your product or service. SaaS applications are far more adaptable than traditional software and can be adjusted much more readily. Adding value can be done in a variety of ways, including:

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• Identifying new sources of discomfort.

• Changing the product’s appearance.

• Including a new function.

7. Focus on retaining customers.

Customer turnover is among the most important metrics to track once your SaaS solution is generating paying customers at scale. In my view, nothing is more damaging to a startup’s future than high churn rates. Thus, you must ensure that your customers don’t want to leave. To do so, first ensure that the consumer understands the value your product provides, whether it’s cost savings, threat protection or improved performance. Periodic reports, executive business assessments and savvy communication can all help with this.

A successful firm relies on achieving product-market fit. It indicates that there is a market for what you are selling and that people are prepared to pay a premium for it since it is superior to the alternatives. As your company grows and changes, make sure to keep an eye on what the market wants so you can build the proper fit.

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