November 20, 2023

A framework for driving product-market fit through pilots

Product-market fit can make or break a company. This is why a winning market is a kind of Holy Grail for product managers. They realize the “market” part of the product-market equation is the piece of the puzzle that determines success.

Despite this, many product managers still follow a more traditional approach where they focus on a go-to-market plan that hinges on mass adoption of their features. Spoiler alert—that only works if you already have a proven market. If you don’t yet have a proven market, a pilot is an effective way to reverse engineer product-market fit by building a solution for a single customer and then scaling it to win the entire market. 

I’ve successfully leveraged this strategy across multiple organizations, including Applied Predictive Technologies, Movoto, and Blend. Running a pilot - really, a collaborative experiment with one partner customer - we were able to really understand that customer’s needs and then extrapolate that out across the whole potential market. The pilot kept us laser focused on the things that matter most. The deep collaboration with our customer enabled us to dive deep and to uncover unique insights that we wouldn’t have learned otherwise, which gave us a tangible competitive advantage every time. And that partnership was also instrumental in our ability to create trust and establish credibility with a wider audience. 

The 8-step Pilot Framework

I’ve used this eight-step framework to use product pilots to drive product-market fit for B2B products. 

Step 1: Identify a problem area to attack

Your customers aren’t going to tell you which problem to solve. They will come to you with many different problems. Don’t fall into the trap of trying to do everything just because you can. Technology’s capabilities are a blessing and a curse. Your first job with a pilot is to decide on the one specific problem your solution will fix. 

Step 2: Identify target customers to work with

Once you know which problem you’re going after, it’s time to consider which customers will unlock the learnings you need. Which ones fit the mold of the type of company that will ultimately be your perfect customer interns of size, operating model, and so forth? Then—within that group—you need to identify companies that are willing and able to partner on a pilot. A smaller organization with fewer legacy processes might be more nimble than a large one, but they may also be so busy fighting fires all day that they don’t have the bandwidth to dedicate to a pilot. A large organization might have more resources and be used to experimentation, but they may have more complex requirements that make it difficult to move forward quickly. 

Step 3: Scope out a product hypothesis

With your problem and type of customer nailed down, it’s time to define what type of product to build to successfully attack the problem area. You don’t want to go in with an open-ended approach. You want to have a clear hypothesis about the specific problem and proposed solution so that you can pitch that specific scenario to prospective customer partners. 

Step 4: Convince a single customer to pilot

The key to convincing a customer to pilot with you is being really clear about what’s in it for them—how will they benefit from participating in the co-creation of your proposed solution?

This is crucial because agreeing to pilot means they are committing to a large investment of resources on their end—subject matter expertise, operations time, and everything that goes into an initiative of this kind. Let them know that they will be able to influence where the product goes, which will ensure that their needs are met on a much deeper level than someone who gets the product later on.

Explain how you will minimize risk for them by delivering a really clear timeline, managing the process closely, taking on the lion’s share of associated work such as curating training materials for their employees, and absorbing a lot of the costs.

Step 5: Co-build with the customer and win

Finally—you’re ready to start co-building your solution! This is the step that will take the longest, sometimes months, sometimes years. How much time you need to spend here depends on how well you did your up-front homework.

And even when you’ve been thorough with the initial legwork, be prepared to discover unknowns and to circle back. That’s just the nature of a pilot.

Throughout this process, be relentless with your customer, and encourage them to be relentless, too. Accountability is everything. Make sure you ship every week, demo new ideas every week, and get customer feedback every week. You need to really push each other to drive the creation of a market-winning product, something that will unlock huge value for your customer’s customers and your customer’s employees. 

Step 6: Convince more customers to pilot

You’ve got your one customer live, and they are crushing it. They’ve got all their users on board and are doing so much more business because of your product. They love it. Now is the time to use your product to leverage this initial spectacular win into more spectacular wins with additional customers. Work closely with your initial customer to create key collateral—case studies, white papers, blog posts. Engage them in reference calls. They should be so happy that they are excited to share their success in order to bring more customers on board. 

Step 7: Rebuild the product to meet new needs

Once you land those additional customers, expect your existing product to break. This shouldn’t come as a surprise since you initially built the product to be such a deeply customized fit for that first customer. New customers will have different flows. You may have hardcoded things that you didn’t realize were hardcoded. You may have made assumptions about certain things being universal that actually only worked for that one customer.

This is your opportunity to re-abstract your product so that it’s scalable. Lean into the excitement here - this is where you’ll gain mass-market learnings and identify different needs from different customer segments. By properly abstracting different sets of functionality behind configuration, you’ll be able to meet the needs of both your newer customers and your initial pilot customer.

Step 8: Repeat steps 6 and 7 until you win the market

From here, rinse and repeat. Each time you add a new customer, you’re going to reconfigure as needed to accommodate different realities about operation models and workflows.

You’re going to iterate on your product over and over as you launch each new pilot, constantly growing an exponentially increased set of use cases. It’s like the Fibonacci sequence in terms of rollout and pilot phases—you just keep expanding your set larger and larger until you have won the entire market. The good news: your product is now built on decades of business excellence with incredible depth and breadth that puts you miles ahead of the competition.

Capture an Entire Market and Beat the Competition

Piloting is a fantastic way to capture an entire market. Initially, it may feel like you’re making achingly slow process because you’re only capturing one customer. And, it can feel a little scary because you’re putting all your eggs in one basket. But, ultimately, the process of co-creating in close collaboration will help you understand the relevant pain points so deeply that you will be able to accelerate much faster than your competitors.

This approach is what we call going an inch wide, but a mile deep, and it’s an incredibly powerful way to corner the market. The deeper your product goes in meeting the market need, the more likely it is that that market will come to you because you’re the only one who knows how to solve the problem so thoroughly. Over the long term, competitors will fall behind and be unable to catch up, because you will have baked so much experience and expertise into your product and have created a solution that truly solves the problem for the market.

Clement Kao is the Founder of Product Teacher and Co-Founder of Product Manager HQ. Prior to his current role, Clement was a Product Manager at Blend, an enterprise technology company that is inventing a simpler and more transparent consumer lending experience while ensuring broader access for all types of borrowers.

Learn more