Product-market fit is not something you get once and maintain forever. You can lose it, regain it and lose again. As a PM, you need to have a good understanding of where you are with product-market fit and have signals set up to inform you of a possible change.
But first, let's talk about the reasons you can lose product-market fit. We can divide all the reasons into two categories.
The problem you're solving is no longer urgent, pervasive or people don't want to pay to solve it
That happens all the time in significant and small ways. There was a problem, an urgent one, for a lot of people and painful enough that people were willing to pay to solve it. And then something changed in their context, maybe many things have changed and the problem is no longer important enough to be worth a solution.Remember the times when the first thing you installed on your brand-new computer was an antivirus program? It was a very important problem to solve for a lot of people. And then things started to change. Operating systems became more secure, people started installing programs from trusted sources, virus-makers began targetting organisations rather than individuals. And many other things changed as well. These days you're not rushing to install antivirus on your computer, maybe you'll do that eventually, maybe never, but certainly it's no longer such an important problem to solve for many people.
Another example is backup systems. Not long ago we used to keep a lot more data on our local machines. If you didn't want to lose it - you'd need to back it up. Then hard drives became more reliable. Later, memory sticks became abundant and cheap. Finally, the Cloud has arrived and became the easiest way to back up data. And now? Odds are most of your data is already in the Cloud, you don't need to back it up as this problem is now outsourced to the Cloud software provider. The backup problem is still there but it's no longer the problem for many, just a few.
There's a better solution available
Competition is another common reason to lose product-market fit. In a market economy, we have multiple players trying their best to solve the same problem and occupy the same niche. This often leads many PMs to obsess with their competitors in constant fear of losing product-market fit to them. Sometimes this fear is justified.Remember Evernote? Once everyone's favourite note-taking app. Until... all other note-taking apps. They had product-market fit when competition in this market wasn't that fierce. Now you have Microsoft, Apple, Google, Dropbox and countless others competing in this market, solving note-taking problem.
Or take a classic case of Blackberry. There used to be no alternative to Blackberry if you needed corporate mail on the go. Then came the iPhone and Android which didn't have product-market fit in this market segment. Those phones were designed and advertised as consumer devices, but they were so good people started using them for work as well. And so Blackberry lost its product-market fit.
In a constant pursuit of product-market fit
The ever-increasing pace of change made some product people approach product-market fit as a goal that could never be truly achieved. Check out Jeff Bezos' mantra of always day one. For this to work, the entire organisation needs to adopt this mindset, it's not enough if only PMs are chasing product-market fit continuously.Know when you lost it
Something PMs could and should do is set up a signal system to know when they're in danger of losing product-market fit. These need to be leading indicators that could warn you, because otherwise, if you already lost product-market fit, it could be too late to try and regain it.What are those signals that you can use?
Start with the top of your funnel, from acquisition. Be on the lookout for trends and changes in prospects' behaviour. If you're finding it increasingly more difficult to attract new customers - that might be an early signal of slipping product-market fit.Keep an eye on your competitors, especially be aware of their strategic moves. Are they diversifying or doubling down on a market segment? Do they prioritise profits or market share? How do their customers perceive the product or service they are getting? What are their unique selling points compared to yours? And most importantly - how is it all evolving?
Comeback
Losing product-market fit sounds scary and even catastrophic to some. But the truth is that is very normal and happens very often. Only by accepting this uncomfortable truth we can avoid the fear paralysis and have a chance to regain product-market fit and make a comeback.It happened to all, to the best of us. Take a product known by all - Microsoft Word. As people who worked on the very first versions of it attest - Word wasn't an overnight success (especially not on Mac). Moreover, it took product managers at Microsoft a long time to get their product-market fit in some industries and customer segments. And then they all but lost it. They weren't quick enough to embrace the move to the Cloud and therefore other players, such as Google started to take their customers away. Now Word is making a comeback as part of Office365. They might still not regain all the product-market fit they once had, but they are willing to try. And so should you.