Finding Product-Market Fit In B2B Markets

Product-market fit is a useful mental model for framing the relationship between a business, its products, and its customers. Understanding it can make or break a B2B startup in any sector (or a new product launch for an established brand).


Its origins are in the venture capital world, where investors’ success depends on picking winning ideas to back. That often means looking for startups whose product or service meets an evident market demand.  In other words, something that doesn’t need too much explaining; something whose value is immediately recognisable to end users. In an ideal scenario, customers immediately ‘get it’, and realise how much they need this thing they just learned about, clamor to be first to get hold of it, and evangelise about it.

That’s perfect product-market fit.

The Value Hypothesis – What Is The ‘Job To Be Done’?

To achieve product-market fit, it’s essential to step into your customers’ shoes and truly understand them, uncovering what they need and value.

They’re not seeking to buy products: they’re seeking to fix problems, to resolve pain points, and to get things done. So you have to start there, by identifying the correct ‘job to be done’. Too often, startups seek backing for (and sales of) the perfect answer to the wrong problem, which is a recipe for failure.

You may need to start further back, and higher up.

Customers, particularly in niche B2B markets, may not have clearly articulated the job to be done, but it still exists. The challenge for entrepreneurs and innovators is to get past customers’ expressed needs to the underlying desire that drives them, and build a solution that will fulfill that desire in ways they could not have imagined.

In 2007, people wanted better mobile phones, ways to enjoy music, and to access internet services. But if Steve Jobs had asked them directly what they needed, how many would have described the iPhone? Despite Apple’s legendary refusal to engage with market research, it understood the job that needed doing and applied its vision to realise a solution its raving fans would queue in the streets overnight to be first to buy.

Researching Product-Market Fit In B2B

Exploring ‘jobs to be done’ is valuable for most brands in market research. However, it requires highly strategic planning to identify the real why behind each expressed desire. It’s essential to do this early in the development process before the attachment and commitment to any particular what goes too far – and before you find yourself building and shipping the wrong thing.

A qualitative approach is often appropriate, and even low participant numbers can yield valuable insight when very carefully targeted. This is especially helpful in B2B research where recruitment and incentives are always challenging. Longer-term research as the development unfolds allows you move from highly exploratory discussions to usability feedback and product response, and can inform iterations of product development.

The process may not be linear, and the agile approach to software development is valuable here: testing and rejecting hypotheses rapidly, adopting an experimental mindset, and being ready to quickly learn from and discard failures. The tech industry’s approach has broad general application, including physical product creation. ‘Moving fast and breaking things’ avoids emotional attachment and overcommitment to any early ideas.

You should get prototypes and a minimum viable product into business customers’ hands as quickly as possible to gauge the response. A panel or community of testers can be an asset for this.

A common insight from VCs is that identifying the market is just as essential as refining the product. Quantitative research is useful to avoid the classic mistake of building a business around an amazing new product that nobody needs or wants. You need to work out exactly who needs the product before you can fit it closely to them.

When you have proven the existence of an underserved market and delivered a product that serves it, trackers and satisfaction studies allow you to steadily refine it while still enjoying first-mover advantage or visibility.

At this point less creativity and imagination is demanded from respondents because more people can suggest tweaks and improvements than envisage new categories. But if everyone thought like Steve Jobs, then we wouldn’t need research at all…

Product-Market Fit: Who Is Responsible?

With so many factors influencing the success of a business, a multidisciplinary approach is needed. Whether that’s a startup team or a project group drawn from different departments across an existing enterprise, cross-fertilisation of alternative viewpoints will help drive success.

For example, marketers will identify user personas, and refine them through research. Designers will create features that get to the heart of the jobs to be done. Strategists and product managers will identify the under-served markets where the potential for growth and the fulfillment of unmet needs exists. In B2B, this requires a deep understanding of the buyer and their motivations, as well as the threats and opportunities driving their industry as a whole.

As such, product-market fit is a corporate strategic objective that requires attention from across the enterprise.

Product-Market Fit And The Path To Success

Brands that truly listen to their customer’s deepest desires, and dare to pivot and adjust, will get closer and closer to true product-market fit. The adjustments might be small and gradual, or they might be huge – requiring replacement of personnel in leadership positions, or discarding a broad product category to drill down into a very specific niche.

Frequently it is not the first to market that succeeds. As Nokia, Myspace, and other brands have learned to their cost, the existence of competitors in a category can help creators and customers differentiate and identify what they truly want.

Once a brand achieves dominance in product-market fit, they become very hard to dislodge.  However, identifying progress towards that point means measuring something that may be less tangible. Organic ‘buzz’, word of mouth, and sentiment analysis, used in combination with relevant satisfaction metrics, are all useful proxies for product-market fit or identifying if you are getting closer to it.

Direct feedback from the market in the form of sales is the clearest indicator of all. When you achieve product-market fit, you‘ll usually know it: when there’s a waitlist for downloads or a queue of customers outside stores, and both press and funders are calling you instead of the other way around.

Then all you have to worry about is meeting demand, and scaling in the right direction.

You’ll still need to review your fit, in a changing world, and keep an eye on the competition, but you’ll be strongly positioned for growth – provided you never lose sight of the need to continually fit your products to the market that buys them.

About the Author:

 As a market research veteran and founder of NYC-based B2B market research consultancy firm, Adience, Chris Wells has worked with dozens of companies over the years.