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Shola Akinlade, the chief executive officer of Paystack, believes his company achieved product-market fit in the period between the end of 2018 and the beginning of 2019. That was more than two years after launch.
For him, the indicator was being able to finally attract the patronage of the companies he’s wanted to serve. But to get to that point, he had to begin with those who, as he puts it, wanted Paystack’s product the most at the time it launched.
“My definition of product-market fit is when the customers you want want you,” he says, with a big laugh. He is a guest at a webinar by Founders Factory Africa where, among other things, he boldly states that Paystack is in a good place with its cash flow.
Akinlade adds that product-market fit for Paystack is typified by the fact that his team now does a lot less demos to potential customers than they used to.
They have got to a point where anyone who needs a payments solution, regardless of business size, can look to the company’s testimonials to be convinced of their value hypothesis. What is product-market fit?
The idea that consistent valuable exchange happens when demand is satisfied by supply isn’t new or original to the tech world. For example, a publication like TechCabal is valuable because only because the content resonates with a target audience.
The coinage ‘product-market-fit’ is credited to Andy Rachleff , co-founder of Benchmark Capital, one of Silicon Valley’s most renowned venture capital firms with investments in Twitter, Uber, Instagram and Snapchat.
Rachleff describes finding product-market fit as “identifying a compelling value hypothesis.” A great value hypothesis, in his formulation, has three ingredients: desirable features, customers who demand these features, and a business model that welds both effectively.
It turns out this is not exactly easy to achieve. Lots of startups do not get to this point and it’s not for want of trying or lacking competence. So how do you hack for product-market fit? A market and its network effects Vodafone and Safaricom launched Mpesa in March 2007 in an environment that had a problem and a tool for solving […]