At a Glance:

• The old playbook for finding product-market fit is becoming obsolete.

• Tech advancements are leveling the playing field and making emotional connection crucial. 

• The best products will be driven by emotional openings in the market. 

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Working with stuck companies has highlighted how cheap, fast tech is democratizing the landscape and creating a race to the bottom. It’s already happening, and companies I meet with are struggling to find and hold onto competitive advantage. The old playbook for finding market fit isn't just outdated; it's becoming obsolete. 

In my last newsletter, we talked about how human-first moats represent the future. 

Today I’ll go deeper and show an example.

The Old Playbook vs. The New Reality

Traditionally, finding product-market fit meant: 

1. Identifying market pain points

2. Creating buyer personas

3. Defining value propositions

4. Building MVPs

5. Testing and iterating

The stuck companies I see haven’t failed in these areas. They know the motions to build, scale, and raise capital. But they haven’t nailed the emotional connection. They don’t truly understand their customers, but rather see them as nodes on a whiteboard. That has to change. 

The Future Is Emotional and Values-Driven

In this new landscape, qualitative insights are becoming more important than quantitative data. Data is still crucial, but most of it is easy to get. The data you use to build unique products should also be proprietary and unique. And it should support and validate your qualitative understanding, not drive it.

Think of it like a blood sugar spike. The data tells us it happened, but the qualitative insights tell us why it matters to the person experiencing it.

This is where storytelling becomes crucial. Going deep into what they are feeling in the areas that surround your offering (their aspirations, stressors, frustrations, anxiety, highs and lows, the other cast of characters around them).  

By understanding these deep drivers, we can reimagine products and services that don't just solve problems, but also become part of their lives and help them thrive. What does that process look like? 

1. Go Beyond Features: Understand the potential emotional impact and start from that place (e.g., a finance application that helps controllers grow into CFOs through its usage and set of accompanying classes).

2. Create an Emotional Map: Assess how current players connect (or don't) to buyers' emotions and where they fall short (e.g., competitors have skimped on customer service, and buyers feel ignored and angry).

3. Identify Emotional Openings: Look for gaps where deeper emotional needs aren't being met (e.g., customers of our hair salon booking system get access to our world-renowned stylist for new trends and a peer community for marketing ideas and support).

4. Align with Your Team's Values: Consider what moves you as a team and build that into your offering  (e.g., “Everyone we hire has to pass a rigid test for empathic skills and desire for growth.”).

5. Test and Iterate: Continuously gather feedback on the emotional resonance of your product.

Finding Emotional-Market Fit with Luke Kanies and Puppet

To illustrate the power of emotional-market fit, let's look at Puppet, a company that revolutionized IT infrastructure automation.

Last week I spoke to Puppet founder Luke Kanies (who I interviewed in my book). He wrote the initial code, was the first salesperson, and over time grew the company to over 500 employees, $100M in revenue, and over 30,000 customers.

Early on, Luke asked a crucial question: "Are we replacing people or making them heroes?” 

This was what he called a “Robots versus Iron Man" moment. They vehemently chose the latter, focusing on turning system administrators (sysadmins) into superstars.

Luke, having been a sysadmin himself, understood their desire for recognition, impact, and career growth. He listened more to sysadmins on the front lines than to C-suite executives, recognizing that they had the real, hands-on “coal on the face” experience. He devoted the company to giving sysadmins a seat at the table. 

This commitment shaped everything—from product development to marketing and sales. They sold a vision of career growth, increased influence, and organizational legitimacy. And if a salesperson ever wanted to show cost savings by replacing people, Luke shut it down immediately. 

While competitors focused on features or selling to C-Level budget holders, Luke and team built support from the users themselves, including hiring former sysadmins for roles within Puppet. That early decision created the path the company would follow to the end.  

What does Luke's approach teach us about emotional-market fit?

• Understand users' emotional state and desires, not just functional requirements.

• Align your entire organization around your values and the deeper needs of your buyers.

• Be willing to go against conventional wisdom (like focusing on end-users instead of budget holders).

• Hold on tight when these decisions are tested.

Puppet created a connection with its users that went far beyond features and functionality. This is the essence of emotional-market fit.

It requires us to think differently about product development and go-to-market strategies. But in my experience working with stuck companies, this approach can be transformative when companies fully commit. And when any competitor can copy your product in days, you’ll need every bit of moat you can get. 

Are you seeing the need for emotional-market fit in your industry? Hit reply and let me know—I'd love to hear your thoughts.

With love,

Dave

Know someone wrestling with product-market fit? Forward this their way. Sometimes a new perspective is all we need to get unstuck.