Explain your product-market fit with Value Logic (free template)
Craft an argument why you will have product-market fit with this template
Articulating product-market fit is hard
A simple way to do it is with a structured, logical story, called a Value Logic
With 9 key ingredients, anyone can make theirs!
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Example Value Logic
How to write a value logic?
To show potential of product-market fit, you must frame the problem in such a way your solution is the only logical answer.
This means a lot of attention should go into the problem framing (step 1-6), and you should only talk about your solution in step 7-9. Keep your baby in your bag.
Customer (1-2-3)
In step 1, 2, and 3 you need to lay out the situation of the customer.
Customer Segment: Who is this, specifically?
Which beachhead customer segment are you talking about?
Make it a real person, so ‘Head of HR’ instead of ‘HR Department’
Job to be done: What is this person trying to achieve?
What is their Job to be Done?
This is not your or your startup’s job to be done!
Problem: What obstacle stands in the way of achieving that Job to be Done?
Understand that a problem and a job is not the same thing.
Competitors (4-5-6)
Here you identify that it’s not a blue ocean, and if your customer doesn’t buy you he does something else.
Alternatives options: What is the most dominant solution they use if they are not buying you?
Base this on customer interviews
Alternative problems: What are the shortcomings of this solution?
Why does it suck?
Consequence: What happens as a result of the current best option and not fixing the underlying problem?
This must be something people really want to prevent of happening. It should be painful, such as ‘wasting €10k a day’ or ‘employees get fired’
Your solution (7-8-9)
Only now you can start yapping about yourself. But, if you crafted step 1-6 well, your solution should fit like a glove to the problem you just sketched.
Solution: Pitch your solution in 1 sentence.
Explain the product category, what is it that you make
Benefit A: Explain how your solution fixes the problem
Make sure your benefit actually tackles the problem of step 3
Benefit B: Explain how your solution addresses the shortcomings of alternatives
Make sure that the problem you framed around the shortcomings of the alternatives (step 5) fits really well with this benefit.
Need help with your product-market fit? Get me as a mentor.
Writing great arguments
Anyone can write down crap
Getting any answer to these 9 questions is fairly easy. Getting good answers is harder. Just like anyone can fill in a business model canvas with crap, this canvas can also be filled with useless stuff. The fact that you fill it up doesn’t prove you anything.
Respect the logic
It comes down to being really open and honest about your logic. Check out the words ‘however’, ‘therefore’, which really connect the arguments.
There should be at least two clear fits in this story: between the problem and your benefit A, and the alternatives’ shortcomings and Benefit B. Having both fits is important to articulate your product-market fit.
Make one for each customer segment
Because this product-market fit logic is customer-centric, you can’t pile all potential segments into one pile. You might need to make a version for every customer segment.
Additionally, if you have multiple stakeholders, such as a different buyer and user in an organisation, or if you are a two-sides platform, you need to create a value logic for each person.
Writing great evidence
You can’t prove product-market fit without sales
The Value Logic is used to collect the right arguments to get a sense of product-market fit. Completing this exercise doesn’t mean you will get product-market fit. You need to get out there and start selling pilots. Perhaps first free, later paid. Learn more about your next step towards product-market fit.
Bottom-up arguments
You want arguments that are unique to your startup. Things such as ‘this market is growing 60% per year’ are only mildly convincing of product-market fit. Product-market fit requires more than a description of the market. Read more about this.
Quantify when possible
‘Heard in customer interview’ is less convincing than ‘8 out of 10 customers mention this. See the example visual for ways of quantifying evidence. If you can’t quantify, verbatim or slightly paraphrased quotes can really pack a punch!
‘It keeps me up at night’ - Worried HR manager.
Solution evidence
Do you have proof your solution works? If it’s prelaunch, results from a prototype, demo, or a lab test can be great?
A workshop on product-market fit and value logics at your incubator or accelerator program? Yes please! Ran workshops in over 25+ programs and mentored 300+ startups.
How to use
Get the template on Google Sheets
Or do it analogue on a whiteboard
Draw out the main structure on a whiteboard and make arguments with post-its.
This is a great one!
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