Narrow Your Customer Focus to Achieve Product-Market Fit Faster

There’s a hidden truth behind the product-market fit that creates happy customers and efficient growth in any SaaS business.

Product-market fit sounds like this:

  1.  Make an amazing product that delights your customers.
  2.  They buy more, tell their friends, and give you rave reviews.
  3.  You will grow efficiently from there!

Here’s the hidden part: YOU CAN’T BE AMAZING TO EVERYONE.

You have to scare away or say No to customers who won’t think it’s amazing. The “saying No” part of PMF is there every time.

PMF requires you to focus on the narrow segment you can delight with your current product.

Go after “everyone” and you’ll attract a crowd of unhappy customers that will drag you down.

One of the best benefits of savvy bootstrapping and being very frugal is having the ability to sell ONLY to the best-fit customers for your current product when you are starting out.

You can be patient and only target the customers you know you can amaze.

Early momentum is created from your unblemished reputation; it’s quality over quantity.

Subramanyam Kasibhat and his wife were contracted by a friend to build a software solution for a manufacturing plant for a German company in Australia.

Seven years later, they rewrote the software to serve other customers and the Vegam Solutions business started to grow.

Vegam Solutions, based in Bangalore, India, makes smart factory software for digital optimization and control of complex manufacturing plants.

Now Vegam has 250 big manufacturing customers, 180 remote employees, and they are closing in fast on $10 million in revenue.

They have grown without outside funding by selling to large customers with complex needs—and by saying No to customers they can’t serve amazingly well.

They deliberately avoided mediocre customers that wouldn’t be highly profitable.

The customers they targeted and chose to serve were extremely happy. They implemented Vegam software in their other plants and word spread quickly.

As Subbu explains it on the Practical Founders Podcast this week:

“We were very picky in choosing our first customers. We have said more No’s to opportunities in our journey than Yes. Some big prospects were very unhappy when we told them, No, we can’t deliver your ROI right now.

“Saying no gave us enough room to innovate, enough room to fail, enough room to build ourselves a very formidable company—without outside funding.

“When we were first growing, it was always No. We picked our customers that could give us significant revenue and we kept that number very small. And I was chasing those large businesses and building revenue.”

Saying No took discipline, but it has made their company much more valuable now. They are growing fast and could double revenues next year.

Being choosy can be a superpower, but only when you can clearly see where your highest leverage comes from and focus on that.

Listen to this interview with Subbu on the Practical Founders Podcast.


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