How Recognizing Product-Market Fit Can Make or Break Your Business

Beating the odds and achieving product-market success requires much more than a great product. In our latest installment of U+ Innovation Strategies, we gathered insights from U+ Managing Partner Sean Sheppard during his recent Conference Board webcast. Read about the lessons Sean has learned and the knowledge he’s gained over his career as a serial entrepreneur and leading innovator of over 100 products for U+.

Statistically, the vast majority of American companies do not know how to establish a successful product-market fit. According to Nielsen, there are now 30,000 products launched in the US each year, and of those, only 30% will sustain or grow their market within the first two years.1 This high rate of failure underlines how difficult it can be for companies to successfully launch and gain traction on their new products.

It can take years of experience to know how to successfully and consistently create product traction. In a recent Conference Board webcast, Sean Sheppard, Managing Partner of U+ Americas, shared some of the valuable lessons he has learned over several decades spent helping companies find an effective and cost-efficient product-market fit.

Here are some of Sean’s key insights from the webcast:

Failure to get product traction is not typically caused by bad products, but a failure in identifying product-market fit

75% of funded startups in Silicon Valley fail.2 This happens not because these companies are unable to create good products, but because they can't build markets and get user adoption for their products in the market. To ensure market adoption, companies must identify and understand user needs, then build products that satisfy those needs.

The product failure rate in Sean’s portfolio is roughly around 20%, which is over 3x better than the industry standard. The main reason behind his higher rate of success is a simple, straightforward focus on finding users, developing products, and making money. This more practical approach contradicts the model employed by many accelerators and startups, which is to develop a product then raise money. Sean’s success proves that companies are more likely to make money through a methodology that focuses on user needs within the market rather than prioritizing the development of the product first.

Having an innovative and agile development team is essential for product-market fit success

Bridgestone, the world's largest tire and rubber company, came to U+ with an idea to launch a consumer car-maintenance-as-a-service app. This was essentially a platform where users pay an annual subscription to take care of all of their basic maintenance needs.

From the ideation stage, U+ helped them install agile market and development teams. The teams immediately went into testing and validating ideas, designing the prototype, and getting it into the hands of early users. Within two months, Bridgestone’s new product was able to get 800+ paying customers on board, proving that this product was indeed highly scalable.

U+ was able to get Bridgestone those 800+ customers for less than the tire manufacturer’s $350,000 investment, which covered market testing, validation work with a full team, and continuous repetition of that process in different markets. These results show we can accomplish a lot in a relatively short amount of time with the right people working together under a unified vision.

While this a B2C example in the automotive space, the rules remain the same. Products and markets are unique, but the path to product-market fit is not. We all need to do the same things to find the truth about where our product fits with a market and what to do about it. It is a human-2-human approach that makes or breaks the idea.

Innovation that revolves around solving current problems will bring early users

We always need to remember that the market, not companies, decides what is innovative. A company may spend large amounts of time and money building a product they believe is the cutting edge of innovation, but if it doesn’t provide a solution to a problem people care about, the product has a high likelihood of failure.

Companies expose themselves to more risk when they invest heavy resources into building an extensive program which purely aims to attract long-term users. Being agile and building a program for short-term users which addresses a problem that exists in the present brings a higher chance of gaining early adoption.

In other words, when looking for users and successful product-market fit, stop trying to build a product for Mr. Right and start focusing on how you can get the attention of Mr. Right Now.

U+ can help you identify product-market fit

The U+ Method can efficiently and effectively lead the development, implementation, and improvement of innovations in any sector, helping you build products that deliver real value to your customers. To date, we have used this method to bring 100+ products to market, creating over $1 billion in value for Fortune 1000 companies. Read our success stories.

Get 20 minutes with Sean, the Managing Partner of U+ Americas, to learn more about how U+ can help your company innovate successfully.


  1. NeilsenIQ, Bursting with new products, there’s never been a better time for breakthrough innovation

  2. CB Insights, 406 startup failure post-mortems

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