Examples of product-market fit
Some companies have done such an exemplary job creating a product to fit the market that their successes can serve as models for other businesses.
The entertainment media company first gained traction in the early 2000s. Movie watchers were starting to get tired of paying late fees from brick-and-mortar DVD rental stores. So Netflix sent them DVDs by mail as part of a subscription service, letting people keep a disc as long as they wanted.
But if Netflix had remained a DVD-by-mail operation, it would have faded out when DVD players did. Instead, Netflix positioned itself as the easier, cheaper alternative to whatever currently dominates the entertainment market: brick-and-mortar rentals, DVDs, or traditional television. Netflix alters its product every time the market need changes, maintaining its fit.
Netflix’s success is a great reminder to stay flexible in changing markets and keep an eye on the future.
In the early days, Google competed with lots of other search engines for market share. Like the other players in its market, they made money by offering ad spots next to search results. But in 2003, they jumped ahead of the competition when they introduced a new concept, AdSense.
Google’s leaders realized that businesses would pay to display their ads beyond the search page, and they developed AdSense to meet that demand. AdSense used new technology to scan webpages and automatically display relevant ads. For example, if you had a business that sold suitcases, you could pay for AdSense to automatically display your ads on travel websites.
By 2017, AdSense's 11 million users were paying Google $95 billion a year. Google identified a need no other search engine was meeting, and then met it.
You can apply Google’s AdSense approach to your business, too. To set yourself apart from competitors, take the time to find things that your competitors aren’t doing and adapt to fill unmet needs.
Slack, an instant messaging platform often used for workplace communication, started out as a completely different business idea. The founders were in the process of developing a role-playing video game, and Slack was something they had quickly hacked together as an internal communication tool for the team.
The team soon realized that the market had plenty of role-playing games, but there was nothing out there quite like Slack. So, they pivoted away from game creation. Today, 10 million people use the product.
Slack’s quick turnaround proves that changing your focus towards a better product-market fit can be worth your time. Don’t be afraid to move away from your original idea when you see a better opportunity.