53: THIS is what product-market fit looks like
Product-market fit is one of those concepts that seems relatively straightforward in theory but ends up being elusive in practice. Finding your way to product-market fit is an iterative process reliant on lots of appropriate, good quality research and validation, also known as customer development. But what does product-market fit actually look like when you get there?
Let’s take a look at Trello. Unless you’re a survivalist whose been awaiting the inevitable end of civilisation in a hardened concrete bunker in Idaho,1 you’ll have noticed that Trello’s had an interesting few years.
The rise and rise of Trello #
Let’s start with a bit of background. Fog Creek Software launched Trello towards the end of 2011 as a free product, then promptly saw adoption take off like a rocket, hitting the 10 million user mark in October 2015.
But this was always part of the plan, as cofounder Joel Spolsky described back in January 2012:
“Trello is free. The friction caused by charging for a product is the biggest impediment to massive growth. In the long run, we think it’s much easier to figure out how to extract a small amount of money out of a large number of users than to extract a large amount of money out of a small number of users.”
So far, so Facebook – in other words, build a massive user base, then figure out how to make money from it later on.
So next came the challenge of making some real money from Trello. Business Class appeared in 2013 and Trello Gold not soon after, but these add-ons didn’t take off to the same extent that the original free version did. It always seemed to me that pretty much all the value to the average user was already in the free version – there simply wasn’t enough of a reason to go for the paid versions.
Nevertheless, having several million users brought investors clamouring to their door to invest in Trello, so Fog Creek spun it out into its own company in 2014.
Defining product-market fit #
Marc Andreessen (of Netscape and VC Andreessen Horowitz fame) once wrote:
“If you ask entrepreneurs or VCs which of team, product, or market is most important, many will say team. … Personally, I’ll take the third position — I’ll assert that market is the most important factor in a startup’s success or failure.
“In a great market — a market with lots of real potential customers — the market pulls product out of the startup.”Marc Andreessen
Trello has seen fantastic product-market fit with the free version, but not so much with its Business Class and Gold add-ons. That may well be changing with the addition of their Power-Ups, however. Power-Ups were introduced to Trello Business Class in 2015 to pull information from other services like GitHub, Slack and Google Drive directly into cards in Trello.
Based on the comments, because Power-Ups are only currently available to Business Class users, it sounds like free and Gold users are pulling the product out of Trello’s hands. All that remains, it seems, is for Trello to find the right price point for non-Business Class users, and they’ll be up, up and away (again).
If this isn’t a strong signal of being close to product-market fit, I don’t know what is.
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