Dave opens by explaining product-market fit. He says product-market fit happens when a company creates the right product to address customer needs. However, many businesses, including established companies, miss this mark. And once you acquire product-market fit, it’s only a matter of time before you experience product-market drift.
What is product-market drift?
Dave defines product-market drift as the tendency for organizations to fail to respond over time to their customer’s changing needs and tastes.
Product-market drift affects everyone – big or small. The best you can do is find a way to combat it.
Dave gives the following causes for product-market drift:
Diffusion of forces
Diffusion of forces implies that instead of focusing solely on addressing your customer’s problems, you begin to solve your internal customer problems, from shareholders and finance teams to marketing and commercial teams. You spend most of your time meeting company and team needs rather than those of your original customers.
People and enterprises fail to adapt to new information and technology and prefer to get the job done the same old way. Many find new tech and information challenging and would rather stay in their comfort zone.
Another driver of product market drift is risk aversion. Dave explains that companies become more risk-averse as they become more successful, leading to product-market drift.
Businesses choose predictability and want increased confidence levels in delivery and timings. Risk-averse businesses give up new ideas and opportunities in favor of steady profits and safe investments, Dave says.
The lifespan of successful companies and organizations with product-market drifts decreases drastically over time, Dave says. In the past, companies could run successfully for three to four decades, but modern companies find it hard to stay relevant even for a decade.
How to fight product-market drift?
Dave lists some easy and practical ways for companies and individuals to tackle product-market drift:
- Create a solid company/corporate culture that inoculates against the drivers of product-market drift
- Get back to basics. Start solving customer problems instead of addressing internal issues. No matter the decision you take, ask yourself, “what’s in it for the customers”
- Listen to your customers. Listen to customer feedback loops to understand what they want in a product
- Observe your customers. Many companies find it challenging to be data-informed. It helps observe how customers behave
Product-market drift can turn success into failure, leading to business disasters. Dave says you can effectively tackle product-market drift if you put customers’ problems ahead of your company’s problems.
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