Ari Wells is the VP of Product Marketing at cloud service mogul Akamai. He joined us on stage at Recur 2018 to talk about how their team takes a product from concept to launch.
You hear about product market fit a lot these days, and with good reason. There are so many great ideas out there, the hard part is going to be how you find your market. And it's only going to get harder—technology and availability are giving everyone access to the same kinds of tools that used to be available only to some.
It's the responsibility of product marketing teams to make sure that these great ideas make it to launch and are actually something that customers will find useful—something that potential customers will be willing to pay for.
Finding a path to a viable product market fit needs to be a synergistic process to be successful. Let's see how Ari breaks down the ways Akamai ensures that their teams stay on track, from concept all the way to launch.
What is Product Market Fit?
Finding product market fit means finding a good market, with a solid customer base available to purchase your product. Finding proper market fit should be part of any business model as it’s the place where customer acquisition happens in the early stages of your company.
Keeping PACE (Product Agility, Consistency, and Excellence)
For Ari and Akamai, the most important aspects of the path to product market fit are product agility, consistency, and excellence—or PACE as they call it. This gives their team a way to take the ideas that they want to bring to market, execute on them, bring in their sales team, and ultimately take the product to launch.
PACE is broken down into four stages:
Concept Commit: Validate the assumption that there is a real market for your product.
Execute Commit: Quantify these assumptions to ensure that the product will be salable.
Sales Commit: Codify the potential revenue and refine specific talking points.
Launch Commit: Create a strategy for boosting awareness and acceptance of your product.
This is how Akamai ensures that any new ideas are staying on track to product market it. To get to that point, you not only need to have a great idea, but it has to be salable and help the company grow, too.
Let's see how Ari broke down those four stages and how to move through them.
During Concept Commit, the goal is to validate if there is actually a need in the market for your idea. You need to make sure that customers actually care enough about the product or have a pronounced pain around the problem you're trying to solve so that they'll actually engage with the product.
As Ari told us at Recur, “In order to do a good job with a concept, you've got to be able to prove a few things. The first thing is, is there actually a need in the market for this thing? There are a lot of great ideas, but there are a lot of great ideas that are just that: ideas. It has to be something that somebody actually cares about enough that they have a pronounced pain around, that they have a pronounced need for, or that they'll actually engage with.”
You'll also need to explain the product's relevance and estimate its revenue potential. Otherwise, it's more or less just an exercise or a science project:
So how do you know whether there's actually a market need for something? You reach out to customers and analysts for their input. They're the ones who can help qualify the market need.
Once you have that, it's time to move forward and explain why the product is actually going to be relevant to the customer. A lot of this can come from your experience; we're all data-driven people, so it stands to reason that you'll have a wealth of knowledge on the market you're trying to get into. Even if it's a newer market, you can run competitor analysis to see what kinds of products and new features are most popular before moving forward.
Estimating revenue potential can be a bit more difficult. You have to look at the marketplace and understand how people are actually finding their success. How are they able to generate revenue? What kind of pricing strategies are they using? This research should be the base of your spending and sales forecasts.
It can be helpful to think about the Concept Commit stage as a seed round. If you're able to validate the market need, product relevance, and revenue potential, you get to move forward into the execute commit stage.
The Execute Commit stage is where you need to go deeper. There's buy-in on your concept; now it's time to nail down those assumptions into something concrete. During this stage, you need to back up the qualifications, explanations, and estimates you've made.
Ari helped frame this stage in terms of a typical funding round: “Execute Commit is there to say. I have an idea, I've gotten enough early proof to validate that it's a good idea, but now I need the equivalent of a Series A or a Series B round of financing, which is a larger chunk of capital, to actually go out and turn this into a product.”
You need to feel strong enough about the salability of this product to move forward.
Now's the time to perform in-depth customer and analyst interviews. You need to quantify the market potential; it's not enough that there is a need. For an Execute Commit, you need to understand how pronounced a need there is and how big the market is.
This stage is where you define methodologies and prioritize a product timeline. You need to execute in a systematic way to be successful.
This is where lots of ideas fail. According to Ari, unless you can show these three critical things, product market fit will never be achieved:
There is a quantifiable market need for your concept.
There are customers who will find the product relevant and useful.
There is concrete and attainable revenue potential for the product.
Once you've ensured that the product is indeed salable, identified what success looks like, and gathered enough supporting data to back up your assumptions, it's time to move forward with the sales team.
Sales Commit is where you codify the revenue potential. You'll need to be able to explain the product's competitive advantage on a functional as well as a conceptual level. Sales will need to understand the big-picture story to tell, as well as the key differentiators from your competition.
For a Sales Commit, you're refining the product market fit in such a way that the team understands the targets they'll need to hit and that they are actually attainable.
When you illustrate the market potential to a sales team, it has to be done in a way they understand. The best way to do this is through a bottom-up analysis. The product needs to be broken down into its fundamental parts, each of which connect to a specific customer persona or analyst prediction.
I'll quote Ari again: “You should be able to tell sales, this is our competitive advantage at a functional level; this is our product market fit or our product advantage in a conceptual way. There's two different ways that you're going to enable sales, and they need to understand both. You need to tell a big picture to paint the story for somebody. Why change? Why now? Then, you have to be able to tell the functional story to explain: why with us?” Product relevance is a huge part of this step.
Your sales team will need to understand not only what the product will do but also how it will do it and how it is beneficial. This gives them a way to nail down their tactics for taking the product to launch.
You should understand your main value proposition at this point, as well as the unit economics and overall revenue plan. To get past this stage, the product will not only need to be salable, but it must also be able to meet your intended growth targets.
This leads us to the final stage of PACE—the Launch Commit.
The Launch Commit stage is all about how you're going to bring this product to market. You've nailed down the concept, figured out the best way to execute on that idea, and brought in sales to ensure that the product will help you meet your intended goals—now it's time to bring in the rest of the team.
Everyone comes together to figure out how to drive awareness and get acceptance for the product. Or, as Ari put it, “At this stage, you have analyst relations, public relations, corporate marketing, field marketing, product marketing, sales, sales ops, marketing ops. All teams that have to come together and codify the way that you are going to explain this to people.”
How you launch a product is critical. Launching a product sets the tone for not only the product but also how you'll capture revenue, define your product market fit, and boost awareness of your brand. Everyone needs to be on the same page.
When you're in the Launch Commit stage, it's time to prove the market need—reach out to early adopters and advocates; start setting up the potential for a beta. You'll be creating messaging frameworks for marketing, sales, and customer service and defining measurable KPIs and funnel optimizations. This is the point at which it all comes together to create a kind of flywheel that helps drive revenue.
There's a lot of alignment that needs to happen at this stage. With the work that's been done in previous stages, you've built a product that you know has a place in the market. Now's the time to articulate it to the world.
Nailing product market fit takes diligence and focus
The process of defining product market fit, validating your ideas, and coming up with a plan for inevitable launch takes a lot of diligence. Ari gave us a great framework to take us through the process, but it still requires a rigorous focus and intense conversations with the team.
It's a tough thing to say, but many of the products people bring to the market fail—and a lot of that has to do with an imprecise or lazy product market fit. If you're not directly aligned with the customer's needs and follow through on validating a concept at every stage of development, you're not setting yourself up for success.