Product After Product Market Fit
What’s the point of improving a product after it has product market fit?
It almost sounds like a stupid question. Of course Improving your product is always important, even after you’ve found product market fit. This is obvious to most people. To me at least, the answer wasn’t obvious at first.
When my cofounder and I decided we wanted to build Hevy, we took a trip to a remote location with the plan to work like crazy for two weeks and try to hack out an MVP. In that two week period we managed to build a lot of the key features in the app that users still love about it today. After two weeks of work, you could log a workout, follow friends, get basic analytics etc. We created a lot of value in that two week period.
It’s been 2 years since that trip and we’ve been working on Hevy ever since. 2 years is enough time for 52 two week hack-a-thons. You’d think, that in that time we’d be able to add 52 times the value to Hevy that we added in those first two weeks. But if you look at the app now, it’s clear it’s come a long way since, but it’s not THAT different. It’s definitely not 52x different. We’ve added 5 or 6 key features, it’s true, but the core product is mostly the same.
It sure seems like the value of product work has diminishing returns as time goes on. Meaning every dollar spent on product gets you less and less value out over time. If that’s true, why work on product at all after you have product market fit? Assuming your business has limited resources, wouldn’t time and money be better spent on marketing? Maybe the best strategy would be to have a bare bones product team just to keep the lights on and spend the rest on user acquisition.
This was a serious question we asked ourselves: What’s the point of product work after product market fit?
The point is this: Product improvements are a value multiplier. If you have a product people use, it must give them some value. You could represent this with a simple equation:
Total Value Out = User Count x Product Value
First let me explain what I mean by "Total Value Out". It's a bit of an abstract concept. It's not a concrete value like dollars or anything like that. Think of it more like "Total value added to the universe". If you make a thing and 1 person finds it valuable enough to use, then you've added value to the universe. Naturally then, if 2 people use your product, you're adding 2x as much value to the universe.
"Product Value" is just a number that represents how much value each individual person gets out of using your product.
When you find product market fit, it means you’ve brought "Product Value" to at least 1.1. A successful MVP should be aiming for “Product Value”>=1.1 because that means users get more value with your product than without it. It’s true, as time goes on, it gets harder and harder to increase the “Product Value” variable, but since it’s a multiplier, even small increments make a huge difference in the long run.
There are also thresholds you pass as you increase “Product Value”. A product with a “Product Value” of 1.1 is a product that you use because you have to. You don’t love it, you don’t tell your friends about it, you’re reluctant to pay for it and wish there were better alternatives. At >1.5 you like the product, you’re not looking for alternatives, you’re content to pay for it but you also don’t tell your friends about it. At >2.0 you’re proud that you use the product, you tell all your friends and you feel great about paying for it.
Obviously a >2.0 “Product Value” is the promised land. Reaching 2.0 means you’ve built a world class product. Getting from a 1.1 MVP to 2.0 is HARD but getting there is worth it at almost any price. That’s why product work is (almost always) worth every dollar spent.