Startup advisors often give conflicting advice about finding product-market fit. Some emphasize focusing on core strengths.
Others advocate starting with a minimal viable product. Many insist that adapting to customer demands is the only path to success.
These contradictory approaches leave founders confused about which direction to take.
The contradictions in product-market fit advice have derailed countless startups.
While each approach sounds compelling in isolation, they often collide in practice, forcing difficult tradeoffs that most founders don’t see coming.
This article explores these hidden tensions between popular approaches to product-market fit.
More importantly, it reveals when each approach makes sense - and when it might lead you astray.
The Core Competency Approach: Doubling Down on Strength
When Steve Jobs told Nike CEO Mark Parker to “just get rid of the crappy stuff and focus on the good stuff,” he was referring to Nike’s entire product line.
But this is also excellent advice for finding product-market fit for just one product.
This approach demands ruthless focus: identify your product’s singular strength and eliminate everything else.
Proponents argue that market fit comes naturally when you do one thing extraordinarily well.
They point to Apple’s early focus on user interface design or Google’s laser focus on search relevance as evidence.
Instagram exemplifies this approach perfectly. In 2010, Kevin Systrom and Mike Krieger made a controversial decision that shaped their company’s future.
Their original product, Burbn, included location check-ins, friend plans, and photo sharing.
Despite having invested months in development, they stripped away everything except photo sharing with filters.
This laser focus on one core feature transformed a failing app into a billion-dollar success story.
The core competency approach requires tremendous discipline. PayPal demonstrated this when they abandoned their original vision of beaming payments between Palm Pilots.
Instead, they zeroed in on enabling eBay transactions - a single use case that provided their initial foothold in the market.
Paring your offering down to its best feature also means your product design can be streamlined much more effectively because there’s only one primary function to fix up and adjust.
Early waves of feedback from focus groups and team members can bring about more effective changes to a product meant to serve a single, well-defined purpose.
The core competency approach demands more than just feature reduction. It requires deep understanding of your product’s true differentiator.
Spotify succeeded not because they offered music streaming - others did that - but because they mastered playlist curation and music discovery.
They recognized this strength early and doubled down on recommendation algorithms while competitors spread themselves thin across multiple features.
However, the risks of this approach become apparent when markets shift.
BlackBerry’s legendary focus on secure email and physical keyboards turned from strength to liability as touchscreen smartphones revolutionized mobile computing. Their core competency became their anchor.
The Market-Led Approach: Dancing to the Customer’s Tune
In direct opposition to the core competency approach, market-led product development suggests that you should let customer needs - not your initial vision - guide your product’s evolution.
This philosophy treats product-market fit as a moving target that requires constant adaptation.
Netflix demonstrates the power of this approach. They began by mailing DVDs because customers wanted convenient movie rentals without late fees.
As internet speeds increased, customers desired instant access to content. Netflix responded by pioneering video streaming.
When viewers complained about limited content selection, Netflix created their own original programming.
Each major pivot followed customer demands rather than any predetermined strategy.
The market-led approach requires sophisticated listening mechanisms.
Amazon built their entire empire on this principle, with Jeff Bezos famously leaving an empty chair in meetings to represent the customer.
Their product decisions, from Prime shipping to AWS cloud services, emerged from careful analysis of customer pain points rather than internal assumptions.
Figuring out those needs can be done in multiple ways, including interviews and surveys.
You can also try doing a competitive analysis or simply plotting out your target user’s journey from product discovery to everyday use.
Superhuman exemplifies this approach perfectly.
While other email clients stuck to their original visions, Superhuman let customer feedback drive their entire product development process.
Led by Rahul Vohra, the company’s founder, Superhuman takes a proactive approach to feedback. A key part of their process is to associate survey responses with unique buyer personas, and identifying those that like their product the most.
These personas then become the focus of the company’s optimization efforts. Read more about how they expertly use feedback to determine product-market fit here.
Slack offers another compelling example of market-led evolution, tooking the rising wave of business users transitioning to remote work into account and came up with business services like bolstered security measures and several other features.
Slack’s journey particularly illustrates the power of attentive market listening. The product began as an internal tool for a gaming company.
When the team noticed how effectively it solved communication problems, they recognized a larger market opportunity.
Each subsequent feature - from threaded conversations to app integrations - emerged from careful observation of user behavior and direct feedback.
Yet the market-led approach requires careful filtering. Zoom learned this lesson during their rapid growth phase.
While responding to user demands for security and privacy features, they had to balance these additions against their core value proposition of simplicity.
Not every customer request deserved implementation, even during their explosive growth period.
However, the market-led approach creates its own paradox.
While Superhuman and Slack succeeded by following customer demands, other companies following the same strategy have ended up with bloated, unfocused products.
The challenge lies in distinguishing between valuable customer insights and feature requests that will lead you astray.
Consider Microsoft’s Windows Vista debacle. In attempting to address every customer complaint and wish list item from Windows XP, they created an operating system that satisfied no one.
The market-led approach had led them into a classic trap: trying to please everyone, they pleased no one.
The MVP Approach: Starting Small to Learn Fast
The third major philosophy advocates for starting with a minimum viable product (MVP).
This approach seems to split the difference between the previous two strategies. Like the core competency approach, it emphasizes focus and simplicity.
Like the market-led approach, it prioritizes learning from users. But it introduces its own unique tension: how do you balance “minimum” against “viable”?
Zappos founder Nick Swinmurn exemplifies the pure MVP approach. Instead of building a complex e-commerce platform, he photographed shoes in local stores and posted them online.
When customers ordered, he bought the shoes from the stores and shipped them.
This bare-bones approach let him test his fundamental hypothesis: would people buy shoes online? The answer shaped the future of e-commerce.
Similarly, Groupon began as a WordPress blog with PDFs of daily deals. The founders manually emailed vouchers to buyers.
This deliberately unscalable process allowed them to validate their concept without building complex systems. Only after proving their model did they invest in automation and infrastructure.
The main purpose of a minimum viable product is putting your company on the map and encouraging consumers to provide you with valuable feedback.
The feedback you glean from your customers can help you to redefine your product as it develops, molding it to real-world needs one step at a time.
Spotify’s first MVP offers a masterclass in this approach. While their competitors built complex music management systems, Spotify launched with a simple desktop app that could only play local music files.
This basic version let them test their streaming technology and user interface without tackling licensing agreements. Each feature - playlists, social sharing, mobile apps - came only after validating previous assumptions.
The MVP approach particularly shines in uncertain markets. When Robinhood entered the investment space, they didn’t immediately build a full trading platform.
Instead, they created a waitlist page that promised commission-free trading. The overwhelming response - over a million people joined the waitlist - validated their concept before they wrote a single line of trading code.
Companies like Buffer, Dropbox, and Airbnb all used MVP to learn about their products’ viability and fit into their respective markets.
Yet for every successful MVP story, countless others failed because they were either too minimal to be useful or too polished to be truly minimal.
The MVP approach carries its own risks. Coin, a smart payment card startup, gathered millions in pre-orders with a slick product video.
However, their actual MVP proved too minimal to satisfy customer expectations, damaging their brand and eventually leading to their acquisition. The lesson? An MVP must still deliver genuine value, even if limited in scope.
Navigating the Paradox: When to Use Each Approach
Market Maturity Assessment
Market maturity often dictates the most effective approach. In emerging markets, where customer needs remain undefined, the MVP approach typically yields better results.
Coinbase used this strategy to navigate the uncertain cryptocurrency landscape, starting with basic Bitcoin trading before expanding to other services.
The key to assessing market maturity lies in examining three factors: customer sophistication, competition density, and technological stability.
Mature markets display high customer expectations, established competitors, and stable technology standards. Emerging markets show opposite characteristics.
Implementation Strategy for Core Competency
Established markets might demand the core competency approach. Notion entered the crowded productivity software space by focusing exclusively on flexibility and customization.
Their success came from doubling down on this strength rather than trying to match every feature of established competitors.
Implementing the core competency approach demands regular capability audits to identify genuine strengths.
Companies must establish clear decision frameworks that filter every product decision through the lens of their core strength. Square exemplifies this practice by evaluating every new feature against their core mission of payment simplification.
Their success stems from rejecting features that could dilute this central value proposition.
Market-Led Implementation Framework
The market-led approach proves most valuable during periods of rapid market evolution.
Zoom’s explosive growth during the pandemic succeeded because they rapidly adapted to emerging security and scalability needs, while maintaining their core simplicity.
Successful implementation of the market-led approach requires systematic feedback collection mechanisms integrated into daily operations.
Companies must develop rapid prototyping capabilities that transform user insights into testable features.
Stripe demonstrates this approach by maintaining constant dialogue with developers and rapidly iterating based on their feedback.
MVP Execution Strategy
The MVP approach requires careful balance between speed and quality. Successful execution starts with identifying the most critical assumptions about your product’s value proposition.
These assumptions become the focus of your minimal feature set. DoorDash began by serving a single restaurant in Palo Alto, using this limited scope to test their core delivery logistics assumptions before expanding.
Measuring Success Across Different Approaches
Core Competency Metrics
The core competency approach demands focused measurement of excellence in your primary function.
Shopify measures success through merchant satisfaction scores specifically related to their core e-commerce capabilities.
Their tracking focuses on transaction success rates, platform uptime, and checkout completion rates. These metrics directly reflect their core strength in enabling online commerce.
Market-Led Performance Indicators
Market-led approaches require broader measurement frameworks. Netflix tracks engagement metrics across different user segments, content categories, and viewing patterns.
Their success metrics evolve with user behavior, moving from DVD delivery satisfaction to streaming quality, and now to original content engagement.
This dynamic measurement approach mirrors their market-responsive strategy.
MVP Success Benchmarks
MVP measurement focuses on learning efficiency rather than traditional success metrics.
Robinhood measured their initial success not by transaction volume but by waitlist conversion rates and early user retention.
This approach prioritizes speed of learning over immediate business metrics, allowing for rapid iteration based on real user behavior.
Adapting Your Approach Over Time
Recognizing Transition Points
Markets evolve, and successful companies recognize when to shift between approaches.
LinkedIn began with an MVP approach to professional networking, shifted to a core competency focus on professional identity, and now employs a market-led strategy to expand into learning and recruitment.
These transitions reflect their maturing market position and changing user needs.
Maintaining Strategic Flexibility
Success requires maintaining the ability to shift between approaches as circumstances change.
Amazon demonstrates this flexibility by running different approaches simultaneously across various business units.
Their retail division follows market-led development, while AWS maintains a core competency focus on infrastructure reliability.
Creating Your Product-Market Fit Strategy
Success in finding product-market fit depends on choosing the right approach for your situation:
- Core competency works best with a clear, sustainable advantage
- Market-led development suits rapidly evolving spaces
- MVP proves valuable when testing fundamental assumptions
Remember: product-market fit isn’t static. Your ability to adapt while maintaining focus on value will determine your success.
Ready to discuss your product strategy? Book a call with our product experts to explore how we can help you achieve product-market fit.
