Market/Product/Channel/Model Fit (framework)

When I decided to launch my first startup the only thing I thought of was to turn my dreams into reality.
And this is why I failed 9 times in a row.

Then I learned about the Product/Market Fit framework.
But it's only one of the 4 vital frameworks you need to fit in in order to succeed.

Here are all of them:

#1. Market/Product Fit.
Your product solves problems so important to your target audience that they pay you.

#2. Product/Channel Fit.
Your product perfectly uses the benefits of a channel.
Examples:
User Generated Content + SEO: TripAdvisor, Yelp, Pinterest.
Social: Spotify, Zoosk.
Virality: WhatsApp, Dropbox, Slack.
Mobile: Tinder, Supercell.
Paid Marketing: Squarespace, Blue Apron.

#3. Channel/Model Fit.
Your Average Annual Revenue Per User (ARPU) must be higher than Customer Acquisition Cost (CAC) from a channel.
Examples:
Low ARPU (ads), Low CAC (virality, SEO): Facebook, WhatsApp, Yelp, Pinterest.
Medium ARPU (~$10-$200/y subscription), Medium CAC (inbound + paid): Dollar Shave Club, Draft Kings.
Higher ARPU (~$500-$2K/y subscription), Higher CAC (b2b content, sales): HubSpot, Zendesk.
Super high ARPU (~$100K-$1M contracts), Super high CAC (enterprise sales): Palantir, Veeva.


#4. Model/Market Fit.
The simple formula: Your ARPU x Total Customers In Market x % You Think You Can Capture >= $100M
Examples:
Elephants - 1,000 customers paying $100K+ year. (ServiceNow, Palantir, Veeva)
Moose - 10,000 customers paying you $10K+ per year. (HubSpot, Zendesk)
Rabbits - 100,000 customers paying $1K per year. (SurveyMonkey, Mailchimp, Gusto)
Mice - 1M customers paying $100 per year. (Dropbox, Ipsy, Dollar Shave Club)
Flies - 10M customers generating $10 per year. (Facebook, Snapchat, Buzzfeed)

Source: brianbalfour.com


Cheers,
Charlie Patel ;)



Your friend wants to get access to our invite-only community of growth hackers from companies like Uber, Google, Microsoft, TechStars, Disney, Adobe, Coca-Cola, Amazon, etc.? Here's your personal invitation link for him/her: http://e.growthhackingidea.com/?ref=2145324&a4=1&a5=9

---

Unsubscribe | GrowthHackingIdea / StartupGrowth.com | 1460 Broadway New York, NY 10036