I know the theory: Reach product market fit then scale. But when do you know when you have reached the perfect fit? There is always the temptation to scale too quickly and almost from the outset. But how much AB testing and iterating is necessary in a closed group before scaling is called for? And what are the most NB metrics to look at?

The biggest mistake I see startups make is attempting to scale a product before validating the direction that their customers want it to go. You'll see companies validate pre-launch via closed beta testing, crowdfunding, or building landing pages and testing everything from messaging to price point to conversion funnel. Given that it seems like you're already doing some of this testing, I assume you've got a good handle on your options here.

The challenge is this: looking for the 'perfect fit' is an incredibly easy way to justify never launching a product, and launching too early is a surefire way to spend your first few months scrambling to figure out why people aren't buying your product like you assumed they would.

Launch when you are sure you've got a core set of customers that will buy your product. Don't wait for the 'perfect' moment - get it out to these customers as early as is practical (even earlier than you probably think) and use them to test your price points, messaging, and product fit.

Scale when you know what is driving them to buy, the price they are willing to pay, and how much it costs you to bring them on board. The numbers that drive this decision vary for every company based on product and industry - if you're selling an online course for learning jiu jitsu, your optimal rollout is going to look much different than a consumer tech product. One thing holds constant - to scale, you need a repeatable process that you know will drive conversion and customer acquisition while keeping your costs at margins that make sense to your business.

Questions I would make sure I can answer between launch and scale:
1. Can you say for certain that you know what customers are willing pay? It's great if they are paying $79, but do you know if those same customers would pay $99? What about monthly vs. annually?
2. Do you know where to find more of these customers in large numbers, and how to drive them to your site/product? If so, how much will it cost you to access these customers?
3. When you do drive them to your site/product, what percentage indicate a level of interest (giving an email address, signing up for your platform, getting on a pre-order list)? What percentage click with an intent to buy right away?

It seems that you're already doing the right things by testing your product first and exploring next steps with an intelligent outlook. Keep that up and you'll continue to make decisions that move you in the right direction.

Chris Justice

Answered 5 years ago

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