If I were to ask you what you’re selling and who you’re selling it to, what would you say? Seems like two straightforward questions that are easy to answer, right? Yet, failure to find a good fit between your product and your market is one of the most common things that will prevent a struggling startup from becoming a wildly successful business. Hint: if you said something like “this cool thing” or “the masses” in the above statement, you have a huge challenge. I hope you’re well-funded. But if you don’t have a big bag of cash lying around and you’re not ready to take on Google quite yet, reading this primer may help clarify your focus.

When you’re a startup, the laundry list of things to tend to and worry about keeps growing every day. The more focused you are as a company, the more likely you are to succeed. For small companies without dedicated marketing staff, it’s not uncommon for the product marketing focus to be limited to a few paragraphs in the business plan. The short-term priority quickly transitions to making the phone ring or getting traffic to your site – in short, generating leads. You can sit in a comfortable chair and create market research surveys and product feature sets until you’re blue in the face, but it’s not going to earn you a living until you get out there and sell something.

The secret is to find balance in both the planning and the execution. If you’ve already made some educated guesses about your market and filled in a few product holes with assumptions, congratulations! You have to start somewhere. If you can afford to offer significant discounts or even give your product away until you’re able to validate those assumptions, don’t pass up the opportunity. Make sure you get valuable feedback (and testimonials and references) in exchange. Look for common characteristics in people who find your product appealing and take the time to truly understand what they like. Early market tests and iterative product releases can give you a ton of insights that you never would have discovered sitting in that comfy chair back in your office.

If your product isn’t flying off the shelf as fast as you want it to, then it may be time to re-examine both your product and your target market and make sure they’re a pair made in heaven. In fact, some folks would say it’s the only thing that matters in determining whether or not you’ll be successful – so much so that Marc Andreessen defines a company’s stages by the acronyms BPMF and APMF (before product/market fit and after).

What do I have of value to offer? Do I know who wants it and why?

These two little questions have some big implications. Which challenge do you tackle first – the product or the market? Which is the chicken, which the egg? We all have a passion – your passion may be the product you build or the market you serve. Follow your passion first if you haven’t yet invested heavily in either. The reality is that you’ll probably have to do some fine-tuning, if not major overhauling, to both the product and the market. So this is a great time to remind yourself why you started this journey in the first place and where you really want to take your company from here.

“What do I have of value to offer?” Analyze your product.

If you haven’t found the secret sauce yet, it’s time to ask yourself tough questions about your product and company. What are your strengths and weaknesses? How do you measure up to the competition? Yes, ladies and gentlemen – it’s time for a SWOT Analysis. Please don’t do this by yourself sitting at your desk. In his book, How to Create an Unstoppable Marketing & Sales Machine, Christopher Ryan says the first deadly sin of marketing is “Lack of Self Awareness”. You can help avoid this sin by engaging others including your employees and your customers. Find out what your partners think about you – and your competitors if they’re working with any. Reach out to your competitors and/or their customers if appropriate. Listen to people or companies you wish were your customers. Don’t just think about your end product – think about all your internal processes that go into delivering the end product. The goal is to truly understand what makes you different and what makes you better than other alternatives the customer has available, both now and in the future.

Write down everything at this point – you’re green light thinking. Once you’ve collected a wealth of information, you will see patterns emerge and can start to narrow your focus to a few actionable insights. And remember, just because you toss something aside now as unimportant based on your current customers, doesn’t mean it won’t be the golden nugget that leads you to the Promised Land with a different target market. So keep your brainstorming notes on file. They may come in handy down the road.

“Do I know who wants it and why?” Analyze your market.

What do your existing customers have in common? There are some obvious answers like geography or vertical category that are good places to start. If your market is Colorado or Denver, remember this in your strategy and execution. It can be much easier to rank for “Colorado green hosting” than for “green hosting” for example. There are tons of opportunities across the Web including search engines and social communities that offer geographic targeting. But don’t stop there. What problem are you solving for your customers? What does your perfect client look like when you dig deeper? What size are they? How long have they been in business? What common characteristics or problems are you looking to help them with? Write it all down.

Now brainstorm different segments that have similar needs. Start with peripheral markets – other types of companies up and down the supply chain of your existing customers. Have fun with this. Ask for suggestions from employees, family and friends. Out of all this brainstorming, you are likely to find a few key target markets that make sense to test first.

The natural tendency of many companies is to think that they need a very broadly defined target market because if their market is bigger, they’ll make more money. Typically that’s not the case. It’s usually easier to excel in one targeted market first and then expand to related markets than it is to tackle one huge generic market with a vague value proposition. Of course, the market requirements are entirely different for a VC-funded business with aggressive growth goals than they are for a sole proprietor who wants to start a sustainability education program for local schools. But either way, it’s important to do some homework quantifying your target market. There’s no exact science for doing it, but you can get amazing insights by doing some online research and quick math. Be sure you have a market worth going after based on how cost-effectively you can deliver your product and what your ultimate goals are.

“How do I know when I’m done?” Your “customers” will tell you.

Is there a magic formula for achieving product/market fit? Sean Ellis, author of the Startup Marketing Blog, advocates that you’ve achieved product/market fit when 40% of your customers say they would be very disappointed if they didn’t have your product. That’s assuming you’re able to follow his advice and give it away for free. That works for some businesses, not for all. Your unique circumstances may be slightly different, however the big pictures is still the same. Before producing mass quantities of your product or spending millions on expensive infrastructure and development, be sure to test as much as you can – focusing on beta releases and feedback loops – and be sure you’ve got a product that the majority of your customers love before you run to the bank with it.

If you don’t have customers yet and can’t give away your product for free, try developing strategic content that positions you as an expert within your most likely target markets. Use them as the centerpiece for warm networking, email and social marketing campaigns. Evaluate and compare their responses.

“What do I do now?” There are lots of options.

It all sounds good, but the reality is that it’s not an easy thing to do or everyone would have done it already. There are blogs for self-starters and specialists throughout the country for folks who want a helping hand. Practical Innovation is one of them. We’ll help evaluate your current state and get you to the next level. Because BPMF isn’t a place you want to be for long.