Market-Product Fit – That’s the Ticket!

During my time at Nextel in the 1990s, we worked with the Chasm Group. As a disciple since then, when a LinkedIn post announced a new book with a forward by Geoffrey Moore, I purchased it immediately. The new book, Traversing The Traction Gap, by Bruce Cleveland at Wildcat Venture Partners did not disappoint. As a 2x founder who spends most of his time supporting early and growth stage ventures, the book provides three outstanding values:

1. Focus on market-product fit (versus product-market fit)
2. A standard set of outcome-based milestones for early stage companies
3. Transparent visibility to benchmarked success measures

Market-Product Fit vs. Product-Market Fit

Besides funding, lack of product-market fit is by far the most cited reason for failure. But the book points out that even that point of view is wrong. It perpetuates a focus on product first. Instead, Bruce Cleveland argues focus should start on the market (market-product fit).

And I couldn't agree more. “Market-engineering” while having a technical connotation focuses the process on a market-first mentality. A phrase in the book, I particularly enjoyed.

Traction Gap Milestones

Some might quibble with the choice of words. But the book provides a clear and quantitative paradigm for measuring a startup's progress. For each milestone, the book provides:

• Examples
• Success metrics
• Time-frames
• Pre-money valuations
• Recommended resource allocation
• Other best practices

By initially focusing on the urgent and important problem for specific users, new ventures create a “minimum viable category” (MVC).

With a clear problem to solve, ventures establish a “high market IQ." This leads to the next milestone, the initial product release (IPR). Without a strong “market-first mindset”, success at this point is unlikely.

Bruce argues that the product might be interesting but not viable. Engaging users and others in the ecosystem is a common theme. As is the use of qualitative and quantitative inputs. Data-driven decisions also augment the market-first approach to maximize effectiveness of the IPR. 

While I have seen this called a "minimally viable product" in other places, Bruce holds that designation for later. The IPR is “quality-assured, with few critical bugs, and should be compelling visually and functionally to use.”

The book's "minimum viable product" (MVP) is when there are clear and consistent usage and customer engagement metrics. An MVP demonstrates engagement and retention of happy paying users. This definition of MVP has two parts. The first demonstrates the importance of creating a successful commercial product. The second, a viable "financial product" (inclusive of the business model) that will attract investors.

Business model success with a repeatable sales and marketing process is the next milestone. The book calls this “minimum viable repeatability (MVR).” It includes a solid foundation for ongoing new features as well as deployments. Support processes to ensure customer success must also be in place. During this phase, Bruce also provides insights into finding and acquiring talent. Other key activities help build the foundation for future scaling.

To traverse the Traction Gap, ventures must show multiple quarters of growth. Bruce calls this “minimum viable traction (MVT)”. With continued growth of the team and the customer base, focus and priorities change too.

At this stage, refining sales and marketing lowers acquisition costs. Ensuring cost effective retention is also important. From there, the book concludes with scaling the business.

Transparency of Information

“One of the reasons we are willing to share the information…is that we know the Traction Gap Framework offers guardrails and mile markers…that most startups will need...to arrive safely at their destination.”

So many times, as a new venture, you struggle to understand what is “normal” and how well you are doing. The book goes to a great extreme to provide as much information in this regard as possible in a 250-page book. Plus, at the end of the book is a link to get all the information in a handy format. A great cheat sheet to help navigate your growth.

The Book In Review

Through a new paradigm called the Traction Gap, Bruce Cleveland dissects the anatomy of startup from idea to scale. Like “Crossing The Chasm”, the book’s insights and tools guides startups through the most challenging phases of early growth. This foundation leads to successfully traversing the Traction Gap.

The first read (you will want to re-read sections to dive deeper into specific areas) is quick. Most importantly, the book provides an elusive set of benchmarks and best practices. This information is invaluable to entrepreneurs.

The book is available on Amazon and more information is available on the Traction Gap Institute website.

Enjoy!