Expert Tips for Finding Product-Market Fit as a Startup

Introduction

When startups prepare to launch their brands or start selling products, they may be concerned about raising enough funds to run the business or hiring talent to bring the ideas to life. But startups also need to consider whether or not the products and services they offer make sense in their target market.

According to CB Insights, poor product-market fit is a top reason startups fail. In an analysis, the organization found that around 35% of startup failures could be attributed to a lack of market need, meaning startups were offering products or solutions that the target audience didn’t have much use for. The only bigger mistake was running out of money.

Clearly, it’s critical for startups to know how to tap into the proper product-market fit, not only to sell products but to complete what the company set out to do: solve a problem for their target audience.

So how do you find that sweet spot for product-market fit, and what do you do if your startup’s offerings are missing the mark? It’s not time to throw in the towel—according to Nick Eischens, COO of Popl, it’s time to pivot.

A conversation with Nick Eischens, COO of Popl

Eischens is COO and co-founder at Popl, a company offering digital business cards for teams and professionals. Popl has solved a problem for customers by creating a business card that you’ll never have to worry about forgetting at your desk when you’re at a conference or networking event.

But Popl wasn’t always as tuned into what its customers needed as it is today. Eischens spoke with HubSpot for Startups about finding product-market fit, pivoting when necessary, and collaborating with customers to provide the best solutions for their needs.

Finding product-market fit

HSFS: What has been your journey for finding product-market fit?

Nick Eischens: We’ve had quite a unique journey. When we started Popl five years ago, it was a consumer e-commerce company, and our main product was a sticker for the back of your phone that you could tap on someone else’s phone to share your contact info and social media. It was geared toward a social use case, like meeting people at parties and casual events. 

After the first few months of sales, we started calling our customers to get their feedback and learn how they used our product. We quickly discovered that our product attracted customers who found it cool but didn't use it long-term. 

However, some customers used Popl weekly for business purposes, replacing their paper business cards with Popl. This suggested that our ideal customer was different from what we initially thought. Those using Popl for business were getting more value from our product, and they were more likely to subscribe to our premium service. Our conversations with customers helped us identify their main problem and shift our focus to a professional use case.

To this day, we continue to learn from our customers and focus on building the things they want. I wouldn’t say we’ve found 100% product-market fit yet, but we always strive to get closer to it.

Determining the right market for a startup

HSFS: How do you think about your total addressable market?

NE: Digital business cards are industry-agnostic, which is both a blessing and a curse. Practically every company could use our product, but that makes it difficult to focus on a specific area. I think this is a common trap into which many startups fall—spreading themselves too thin by serving all types of customers. 

We think our total addressable market is massive, and we’re always considering new markets to enter. But it’s important for us (and all startups) to focus on serving the right customers first. You can’t spend all your time thinking about the big picture. 

Pivoting to meet a market need

HSFS: What did the pivoting process look like for Popl?

NE: Once we realized that people were using Popl for business, we started building more business features like lead capture mode, CRM integrations, and a business card scanner. 

Then our customers started asking, “How can I get Popl at my company?” The Popl users were bringing in more business than their counterparts who were still using paper business cards. So we started working on a product called Popl Teams that would allow Popl to be used across an entire organization.

Popl Teams is now our No. 1 product and the best digital business card platform for companies. The pivot from an individual use case (B2C) to a company use case (B2B), has been a long process, but we think it’s helping us get closer to finding our product-market fit.

Listening to feedback

HSFS: Can you explain more about collecting customer feedback? 

NE: A lot can be done by simply calling your customers and having short conversations with them. Y Combinator taught us to talk to our customers, learn their pain points, and find out what they're hoping to achieve, then build a product that will help them accomplish those goals. 

We frequently call our customers to check in with them. Are we solving the problem they intended to solve when signing up with Popl? Getting very specific with the customer goals helps to show the value that we are delivering to them because they're quantifying it, they're setting the goal, and we're helping them achieve their goal. 

When I call customers, I’ll say, “Hi, I'm Nick. I'm a co-founder of Popl, and I would love to get your feedback on our product.” People love to talk to the co-founders, the people who are building the product, especially if they're using the product a lot.

I try to understand how each person uses the product and I’ll specifically ask, “What sucks?” People definitely share that. After a handful of calls, you can start to uncover some insights: this is something that we should fix, this part of the onboarding needs improvement, etc.

Measuring for product-market fit

HSFS: What metrics did you rely on to help you determine the right fit or confirm you were on the right track?

NE: Mainly, it's usage and retention. What segment of your customers are using your product the most and are continuing to pay you, and maybe even expanding their business with you?

We look at our customers who use Popl regularly and continue to add more people from their company onto Popl. That signals that this customer has a need for our product, so we want to figure out the need, why they use it, and how to find similar customers. If they’re retained and using it regularly, that’s the product-market fit segment.

Parting advice

HSFS: Do you have any additional advice for founders seeking the right product-market fit?

NE: Iterating is equally important. One of our core values at Popl is launch, iterate, repeat. So the faster you can launch new products, test new email flows, or try new ways of talking to customers, the faster you can gather data to see what works and what doesn't. 

Even if you have something that's working, we still try to experiment with new things to make our customers happier and help them achieve their goals faster.

Conclusion

When you’re building a startup, it’s more than just creating and pushing a product to anyone who will listen. The startups that succeed in their industry are the ones that hone in on specific problems their products actually solve and what use cases make the most sense. 

You might not have the perfect product-market fit from day one, and that’s okay. As we can see with Popl, the fit doesn’t have to be a match made in heaven from the very beginning. As long as you are flexible, willing to listen to your clients, and open to pivoting to meet their needs and goals, the right product-market fit will fall into place for you.

Even when it seems like you’ve nailed down your product-market fit, don’t be afraid to continue experimenting. As Eischens explained, even now, the Popl team continues to strive toward product-market fit and make adjustments to improve the company and make customers happier.

The secret to success as a startup isn’t necessarily achieving the best product-market fit right away, but being open and receptive to feedback for continuously fine-tuning your products.