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Product-market fit in deep tech

Engagement Director

“Build it and they will come”. Sadly, they probably won’t. So why not do the hard work up-front and secure your market before you do anything else. Investors will love you for it.

“Build it and they will come” – a common, and ultra-high-risk, strategy for bringing new technologies to market. In the world of deep tech, risk mitigation is vital. Don’t get me wrong, this level of unwavering self-belief is almost a pre-requisite for making it in the big bad world of technology startups. But, and yes, there is a but, validation should be every deep tech founder’s secret weapon.

According to CB Insights, 35% of startups fail because there is simply no market need for their product. Maybe these startups fail because they are seeking to solve a problem that doesn’t exist? The more likely story, which puts some faith in founders to have at least identified a problem to solve, is that these companies fail to either find the right first home for their technology or iterate their proposition appropriately to better match the market need. In other words, there is a lack or absence of product-market fit.

So how do you establish product-market fit? In the SaaS world it’s relatively cheap and easy to identify a target customer and their needs – after all, most SaaS platforms are already targeted at a single customer segment. Iterating and re-testing software can be, with a good team, equally fast. Hard tech is hard[er]. Often there are entire value chains or industries to test hypotheses against. MVPs (Minimum Viable Products) or demonstrators can cost hundreds of thousands, if not millions, of pounds and years to set up. The good news is that this doesn’t mean it can’t be done. Chunk it down. Take one step at a time. Product-market fit is confirmed at the market interface, not in the lab. Adopting rapid iteration and feedback loops to hone and polish hypotheses regarding your target market, value proposition, and business model will get you there – all robustly validated with the voice of the market. And then the fun really begins…