Sachin Agarwal’s blog

In my time watching and working with startups as an investment banker, VC, entrepreneur, and consultant to startup teams, the notion of product/market fit has gone from a new insight to conventional wisdom. 

However, product/market fit never seemed like the right notion to me. 

After doing some thinking and working very closely with a handful of startup teams in the last year or so, I realized that a team isn't looking for product/market fit; it's looking for product/market balance.  The notion of balance highlights the delicate task of getting a product to meet a market's needs:

Even if a team builds a robust, stable product offering, the product can fail to meet the market's needs and the product lands with a thud:

The notion of balance serves another purpose; balance provides a basis to extend the metaphor into the other important parts of a product experience: positioning and pricing.  Here, you can see how the product supports positioning:

Likewise, the product + the positioning supports the price structure:

If the product itself balances with the market's needs, poor positioning can upset the balance and lead to everything tumbling down:

And a poor price structure can lead to defeat even with the right product and positioning strategy:

You can't decide to position a product as premium if the product is shoddy.  Likewise, the price you choose reinforces and strengthens your positioning - you can't have a "value" product that is priced higher than your competition.

Startup teams must make sure that everything about their product, positioning, and price structure maintains the delicate balance necessary for market success.