Introducing the PMF Onion Model

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Product/market fit (PMF) is key for any startup to achieve growth and scale successfully. However, finding true PMF can be challenging and elusive. A helpful framework is to think of PMF as an "onion" with multiple layers that need to be peeled back and addressed:

• The superficial layer includes the tools, creatives, channels, automation, tactics, processes, content, and volume that surround your product. This layer is focused on marketing execution.
• The systemic layer involves timing, systems, metrics, team, frequency, and budgets. It looks at the infrastructure and operations supporting your product and marketing.  
• The strategic layer examines aspects like your ideal customer profile (ICP), value proposition, positioning, and personas. This layer focuses on strategic marketing elements.
• The core layer is the product itself - its features, functionality, design and the core value it delivers. This is the heart of your offering.

Getting true PMF requires peeling back and optimizing each layer of this onion model. Just working on the superficial marketing tactics or systemic operations is not enough. You need to also evaluate the deeper strategic layers and the product core to achieve full alignment. This framework highlights how PMF requires a holistic perspective across all layers.

The Superficial Layer

The superficial layer of the PMF onion refers to the marketing tactics and processes that are highly visible to teams. This includes things like:

• Marketing channels - Paid ads, SEO, email, social media, etc. Optimizing channels and expanding reach.
• Content - Developing blogs, videos, guides, case studies to attract and convert customers. Focusing on content volume and topics.
• Automation - Setting up marketing automation, triggers, and workflows to nurture leads.
• Creatives - Crafting compelling ad creatives, landing pages, and marketing assets. A/B testing different options.
• Processes - Documenting and improving various go-to-market processes around campaigns, sales, and customer success.
• Tactics - Trying growth tactics like free trials, referral programs, and partnerships. Pursuing new ideas and experiments.

The superficial layer represents the outward-facing marketing activities and programs. It's often the first place teams try to diagnose and fix issues when traction is lacking. There can be a strong focus on optimizing and scaling the superficial layer.

The Systemic Layer

The systemic layer involves the systems, metrics, processes, team dynamics, budgets, and operational frequency that enable product-market fit. This layer looks at how the business runs on a day-to-day basis to support the product and customers.

Key elements of the systemic layer include:

• Metrics: Having the right metrics and KPIs to measure product-market fit and monitor progress. This includes metrics to assess acquisition, activation, retention, referral, and revenue.
• Processes: Well-defined processes for developing, releasing, and iterating on the product based on customer feedback. As well as processes for onboarding users, support, and managing churn.
• Team: Having a team with the right structure, talent, and culture to operate the systems that support product-market fit.
• Frequency: The cadence of releasing new product updates and features, based on the market and customer needs.
• Budgets: Allocating sufficient budget to product, engineering, marketing, and other teams to fully support product-market fit activities.

The systemic layer is about building the infrastructure both for rapid iteration on the product, as well as scaling it. Problems here are about execution and operations, not strategy.

The Strategic Layer

The strategic layer of PMF refers to understanding your ideal customer profile (ICP), value proposition, positioning, and personas. This layer is all about truly knowing who your product is for, what problem it solves, how it is unique, and crafting messaging that resonates with your target audience.

Many founders and go-to-market teams fail to thoroughly define and understand these strategic elements. They may have a vague sense of their ICP and value prop, but lack clear segmentation and an articulated positioning statement. Personas often remain ambiguous or generic.

Without nailing down the strategic layer, there is a gap between product and market. Messaging does not connect with the right customers in the right way. There is a disconnect between what problem the product solves and who feels that pain acutely.

The strategic PMF layer requires moving beyond assumptions to gathering hard data on who is using your product and why. It means conducting customer research to refine personas and value props. An unclear strategic layer manifests in poor conversion rates, high churn, and lackluster engagement.

Regaining PMF requires revisiting foundational questions - who are we building this for, what unique value do we offer, what customer needs do we fulfill? The strategic layer is challenging to get right, but essential for aligning product and market fit.

The Core Layer - The Actual Product

The core layer represents the actual product or service that a company offers. This is the true essence of what the business provides to its customers. Everything else in the outer layers of the PMF onion supports and enhances this central component.  

When a company struggles with product/market fit, there is often an instinct to try improving tactics, processes and positioning first. But it's important to periodically return focus to the core product or service itself. Does it fully address the target customer's needs? Is there a compelling reason for users to adopt it over alternatives? Does it provide enough value and differentiation?

Often the most direct way to regain strong product/market fit is to improve or pivot the product itself. This may require going back to customer research and discovery. Founders should be willing to question sacred assumptions about the product and critically evaluate if it hits the mark. The core offering may need refinement and iteration before the other PMF layers will start working.  

A great product that powerfully solves real problems and delights users can be the fastest path to product/market fit. It becomes the solid foundation on which everything else is built. Of course, the outer layers still matter enormously. But an exceptional, must-have product or service at the core enables proper fit and growth.

Focusing on Superficial & Systemic Layers

Very often founders & go-to-market (GTM) teams are hyper-focused on the superficial and systemic layers of the PMF onion model because problems there are the easiest to spot and fix. The superficial layer includes tactics and processes like tools, creatives, channels, automation, content volume and more. The systemic layer involves timing, systems, metrics, team composition, budgets and frequency.

These two outer layers are more straightforward to optimize because they revolve around execution. Teams can readily implement changes to creative assets, campaigns, targeting, messaging, and so on. They can also adjust systems, processes, budgets and staffing to systematically improve campaigns. The cause and effect is relatively clear, allowing for rapid iteration.

As a result, startups often devote disproportionate energy towards honing these superficial and systemic layers. They meticulously split test different combinations of targeting, creatives, channels and budgets. They analyze and tweak every metric and campaign component, believing optimization here will unlock product-market fit.

While execution is critical, over-indexing on these layers rarely solves more fundamental strategic misalignments. Founders avoid looking deeper because it surfaces uncomfortable questions about the viability of the product and business model. But iterative tactics alone cannot compensate for a flawed strategy.

Fear of Questioning PMF

Founders and go-to-market teams often exhibit a reluctance to look beyond the superficial and systemic layers to question product-market fit. There is a general fear that venturing deeper and assessing the strategic and core layers means they must confront the possibility that their product lacks true product-market fit.

This fear leads many teams to avoid analyzing and addressing potential misalignments between their product, positioning, value proposition, and target customer. It's more comfortable to continue optimizing and iterating on the outer layers of marketing tactics, processes, automation, and content. However, this avoidance of deeper introspection often results in wasted time and money spent on optimization when the underlying strategic alignment needs reassessment.

The tendency is to hope that more well-executed tactics and systems on the superficial layers will eventually lead to traction. But in most cases where positive market response is lacking, the root cause lies in the deeper strategic layers of product-market fit. Avoiding analysis of these layers out of fear simply postpones the inevitable reckoning required to get a product truly aligned with its market.

Issues Often in the Strategic Layer

Research from Leadle shows that when positive traction in a market is missing, the issue stems from the strategic layer 9 out of 10 times. After analyzing data from over 250+ startups, Leadle found strategic layer issues to be the primary cause of problems with product-market fit.

The strategic layer encompasses ideal customer profile (ICP), value proposition, positioning, and personas. Problems here indicate a disconnect between what a startup is offering and who they are offering it to. Leadle's data revealed startups frequently struggle to precisely define their ICP and craft messaging that resonates with that audience.

Value propositions are often too vague or fail to convey differentiation. Personas may seem generic and not fully representative of the target customer. Brand positioning struggles to stand out in a crowded market. All of these strategic gaps result in poor product-market fit.

While the superficial and systemic layers are easier to optimize, Leadle's research highlights that issues here are rarely the root cause. Founders and go-to-market teams should dig deeper and be willing to reevaluate strategic elements like ICP, value prop, and positioning to truly solve product-market fit problems. Quick fixes on the surface rarely work.

Regaining PMF

Regaining product market fit requires refocusing efforts on the strategic layer of the PMF onion model. This involves taking a hard look at your ideal customer profile (ICP), value proposition, and positioning.

Start by clearly defining your target audience and buyer persona. Conduct customer research to understand their pain points and needs. Make sure your product or service directly addresses those needs in a compelling way.

Next, examine your positioning. How do you communicate your value prop and differentiate from competitors? Is your messaging resonating with your ICP? Tweak messaging to highlight the unique value you provide.

Additionally, review your go-to-market strategy. Are you reaching your ICP through the right channels and campaigns? Adjust targeting and outreach to penetrate your core demographic.

Finally, realign internal priorities and roadmaps. Build a culture focused on delivering value to your ICP before chasing growth or scale. Doubling down on nailing PMF with your core target audience is essential.

Refocusing on the strategic layer takes concerted effort but pays dividends. You will realign product, messaging, targeting, and culture to delight your ICP. Do the hard work needed to regain PMF before pushing growth.

Key Takeaways

Peeling back the layers of the PMF onion model provides important insights for founders and go-to-market teams struggling with product market fit. The superficial and systemic layers related to tactics, processes and operations are often the initial focus. However, issues with traction frequently stem from deficiencies in the strategic layer encompassing positioning, personas and value props.

There can be a reluctance to dig deeper and truly re-examine product market fit. But taking a holistic view across all layers of the PMF onion model is essential to pinpoint where disconnects may exist. Rather than applying band-aid solutions, founders must be ready to question assumptions and revisit positioning and value props to achieve resonance.

Regaining product market fit requires alignment across all layers of the PMF onion - from superficial tactics to strategic fundamentals. With a willingness to peel back the layers, founders can get to the root of what is missing and take the necessary steps to find that product market fit once again. The key is to leverage the PMF onion framework for clarity, while maintaining flexibility to pivot as needed.