Product traction framework: Ideal product = 1. Known problem * 2. Known solution * 3. No existing product
/By Duncan Anderson. To see all blogs click here.
Reading time: 7 mins
Summary: Some businesses / product ideas are easier than others.
Jingle: I try not to do things the hard way, I’m not a masochist, I’m looking to be a net progress optimiser!
Here is a framework I’ve created for trying to figure out what to build.
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Details
“The only thing that matters is getting to product/market fit.” - Marc Andresseen
Over the years, I think I’ve read Marc’s blog on product market fit 10 times, and somehow each time it’s insightful. I recommend reading yearly.
Startup Outcome = 1. Market size * 2. Product quality (yes this is a rephrase from Andresseen where he includes a third variable called ‘team quality’. I’m assuming product quality here incorporates team quality).
“The #1 company-killer is lack of market.” Marc Andresseen.
DA updated quote:
When a great product meets a lousy market, market wins.
When a lousy product meets a great market, market wins.
When a great product meets a great market, something special happens.
Andresseen says that ‘market size > product quality’ and I agree.
The main point of this blog is to look at a framework to define product traction (quality).
Traction quality = Time to market share saturation.
High product quality gets to market share saturation fast.
Low product quality gets to market share saturation slow.
Market size determines the number of customers / amount of revenue at saturation.
All else equal you want a massive market and high product quality.
Fast growing small market vs Large slow growing existing market.
They say either a market can be small now and growing fast to eventually be big. Or big right now.
Standard advice is that a small fast growing market is easier to go at then an existing big one. That is because competition is normally more ferocious in the existing big market.
Destination market size.
One lens I like is: Destination market share can be 100%, 10%, 1%, 0.1% etc of humanity.
To be a massive company you need destination to 100%. Eg everyone searches (Google), everyone buys things (Amazon), hopefully everyone has friends (Meta), everyone needs transport (Tesla).
One example of destination market share for social media:
100% = Meta (facebook, instagram)
10% = Twitter
1% = Reddit
I don’t think there is anything wrong with building a company that is going at eg 1% destination market share, it can be epic thing for society. If you want to be a $1tn+ business then you’ve likely got to be something that is going at 100% of humanity.
Company traction vs Product traction
Company traction = 1. Market size * 2. Known problem * 3. Known solution * 4. Existing solution.
Product traction = 1. Market size * 1. Known problem * 2. Known solution * 3. Existing solution.
Comment
One should really always consider market size, but it makes the table at the start twice the size, with things becoming a bit unwieldy.
Don’t ‘achieve failure’ = Strong product traction in a small market.
But don’t just arbitrarily assume that big markets are always better than small markets. IMO think about product traction quality too!
Either everything is equal, or everything is not equal.
One unit of effort can lead to no progress.
One unit of effort can lead to one unit of progress.
Or, one unit of effort can lead to ten units of progress.
If you are trying to build a new feature, or new product, or new company, I think you want to try and understand what your potential customers see (not just what you see). You might have a sick solution… to a problem that people don’t know they have. So building a great product isn’t going to be enough, you’ll need to educate people on the problem, then the solution AND build the product. Likely a large amount of work.
Most products / companies evolve. Pick the best starting point.
When you are coming up with ideas, I think you want the ideas to have maximum traction, not maximum improvement to the world if everyone saw the world the way you do and understood how to use the product as you intend.
To me, if you can start with this:
Then bolt on other features once you have traction and people get what you are doing.
Your initial idea might be:
Here you have a product idea, but there are existing solutions. Normally they say to get big traction you want a 10x better solution / product. It might be relatively easy to be 50% better, but 10x is normally very hard.
I’d try seeing if you can find something that is ‘Option 1’, do this first, then do your ‘Option 4’ idea second where hopefully the two features are ‘positive sum’ (aka 1+1=3).
Find the place to get maximum traction and try building solutions there.
Also, consider market size!
Examples
iPhone
There is the internet, but you can’t have it with you all the time.
Touch screens and 3G are invented meaning it’s now possible to have the internet in your pocket at all times.
Much better than just being able to make phone calls or text people.
Known problem = Want internet everywhere
Known solution = Have a device you can fit in a pocket that accesses the internet.
No existing product = Not possible before certain technologies built like touch screen and 3G.
Edrolo Video Theory
Video on demand theory was technically possible as the internet speeds and devices (eg computers, iPhones, iPads) existed, but no one in Australia at least had built curriculum specific video theory courses.
Redbubble
There is an existing product, a known problem, but not a solution.
It used to be that physical products were limited by the shelf space in a shop.
With the internet there is infinite shelf space.
There are lots of long tail products like custom stickers (Redbubble) that were not able to be advertised until you had the internet.
So you get the marketing layer to work.
Wish
There are all these products in China that you don’t know about / can’t easily get.
Wish makes it so you can easily discover these products existing when you eg search. Then looks after the logistics of shipping etc.
Google search
Google was not the first search company, but the quality was 10x better.
Apparently on Altavista (one of the most popular search engines prior to Google), if you searched for ‘Altavista’ their own website didn’t even show up on the first page… on their own website!
Pagerank (a Google search signal) changed the quality of search outcomes 10x.
Services that spread virally: eg Instagram
I don’t think people thought they needed to scroll on their phone looking at images.
But there was a viral sharing coefficient of more than 1 so the product grew massively. It’s highly unusual to have a viral coefficient of more than 1.
If you need to do marketing or enterprise sales to educate people about 1. The problem, 2. The solution and 3. Build a product; this is likely a lot harder than just having to in ‘Option 1’ build a product where you only have to build the product.
Services that don’t spread virally: Oura
Problem education: You should track your sleep, this will help you understand what drives good / bad quality sleep and optimise your life to sleep better.
Solution education: Wear an Oura ring to track sleep.
Build product: Build the product that does all the tracking!
If you only take away one thing
I find often that building a product requires a similar amount of effort. But at the end of building a product sometimes you then have to figure out how to educate potential customers on the problem, and then on why your product is a solution to that problem.
At other times you build the product, show people and they are ‘yes, that is what I need!’.
Thinking about 1. Market size, 2. Known problem, 3. Known solution & 4. If there is an existing solution up front before you build a product can help with traction.