What’s the main reason for entrepreneurial success?

entrepreneurial success, product market fit

Wonder how many articles have been written, including by me, explaining what makes a successful entrepreneur? And rarely is the most important aspect of succeeding in business mentioned.  Watch Andy Rachleff, lecturer in strategic management at Stanford and experienced venture capitalist, in less than a minute stating what is the most important ingredient for entrepreneurial success.

To have the right product or service for the market is something so fundamental it’s easy to forget to even mention it. Wrote Entrepreneurship – do genes play a part? that has attracted a lot of readers’ comments. But neither I nor any reader thought of mentioning the crucial aspect of product- market fit. We all just overlook it even though it is a do or die issue for success.

Doesn’t matter if you are The Entrepreneur of the Decade, if you are offering the wrong product/service you will fail. Would we even know who Richard Branson is if he had been offering products the market didn’t want?

Why do so many companies fail?

Did you know that in Sweden as many companies go bankrupt every year as there are start-ups? Sure the tax system is one reason but that’s, unfortunately, not the only explanation. Quite a few of them are offering a service or product that the market, for whatever reason, has no interest in. Sometimes they are actually offering something before the market is ready for it.

Does your company have the most important ingredient?
Does your company have the most important ingredient?

How do you know if the market wants what you are offering?

It’s easier said than done unless you are offering something that there is always a demand for. Look at how Nokia laughed when Apple came up with the Iphone and regular airlines didn’t take low price airlines, like Ryanair, seriously. They failed to understand what the market wants and are hence having huge problems.

Nokia is actually a great example of a company with a lot of qualified and talented employees that have the characteristics of successful entrepreneurs. But they didn’t understand what the market wants and hence lost out.

Keep your ear to the ground

Determining what the market wants is however not as easy as it sounds. Keep your ear to the ground and do research to test if your idea is a viable one.

Long before disposable barbecues became a hit someone I know had the idea but failed. Why? It simply was too early. But that could have been overcome if the right marketing, communication, branding and promotion had been done. What would have happened to the Iphone if Apple had not been able to promote it to the market in ways that worked? Most likely Blackberry would still be considered the ultimate choice.

Do you agree with Andy Rachleff that product-market fit is the most important ingredient for entrepreneurial success? If not, why? How do you determine what the market wants? Do you keep your ear to the ground? What’s your experience when it comes to determining what product/service the market wants? How do you decide on the right timing for launching it? Are you able to promote it in ways that make consumers desire something they may not yet know that they need or want? What promotional strategies have you found work best?

Video:StanfordBusiness – Picture: VIrgin Money

107 thoughts on “What’s the main reason for entrepreneurial success?

  1. This is so true. Many products are launched simply because theperson or company happens to like them. Unfortunately this is often done without first doing the research to find out if it's even something that would be in demand. Focusing on the trends in the marketplace could be beneficial and you never know, it might lead to the next great idea.

  2. Knowing what they want is very important, but also when they want it. Some products are a failure, only to resurface years later and become a success.
    Velcro for example was patented in the 1950's. Missions to moon had Velcro fashioners on their bags. However, it was not until the 1980's that this became a successful product for civilian use.
    You need to know almost everything about customers to understand what, they want, and how they want it.
    Thanks for sharing.

    1. Determination, perseverance are of no relevance if you don't have a product market fit. Timing is a different issue that I have written about. Have you ever come across the disposable barbecues that are sold in supermarkets? My late father was trying to launce one in the 70s but it was too early because the product market fit had not yet developed.

  3. Yes Catarina, I believe going back to the basics strengthens your foundation. If one is not clear about the market target and their needs what follows is a mess. What you have shared is the utmost basic of Entrepreneurship execution follows after it. Thank you for sharing!

  4. I agree that you can't give dogs what they don't want to eat, but having the food they do want to eat doesn't guarantee success. You've got to market your product so people know you exist. There is another equally powerful statement, "It's better to be first than to be best." Richard Branson and Tim Cook disagree with this but too many entrepreneurs wait until their product is perfect before launch. By then. they may have missed the market.
    My recent post Be Thankful to Our Veterans by Giving Them Jobs

  5. Some people seem to “have it”–I don’t mean, necessarily, a great product/service. They’ve got their finger on some pulse that many if not most entrepreneurs can’t find. It’s a talent in and of itself, it seems.

    1. Ramona you are most likely referring to an entrepreneurial mind which is different from carrying out entrepreneurial activity. It means we have the drive and perseverance it takes to move forward, improve and eventually succeed.

  6. Catarina, this is so very basic – having a product that the market wants. Once you have that, the marketing becomes ultra important, giving people a reason why they absolutely must have it (whether they do or not)

    1. Exactly, Lenie. And, not to forget, making sure the company is financially stable and so forth. If in the West you neglect to pay your taxes you will swiftly be in deep trouble. Unless of course you are so big you are legally allowed to juggle your profits around the world.

  7. I always assumed clever marketing was having the ability to convince people to buy items they do not need. I guess well known brands have the leeway to do this but someone starting up a business – unknown to the world has their work cut out for them.

  8. I agree. It is hard to determine what people want so you can create a business around that item. i would first start with something I love and do well. The worst thing is to get successful in a business that your heart is just not in it. When that happens, tweaking your business’ product or services works too. If you are a blogger, looking at stats help. If you are a local business, review local industry stats by visiting Google trends and Google Adwords opportunities.

  9. I agree with the product market fit. I also think this limits ingenuity. The Stone Age did not end because we were running out of stone, or that our ancestors were tired of using rock clubs. Sometimes, you have to look at that market and decide if it needs something new, or changed completely.

  10. Excellent points Catarina!

    It’s sort of like the saying, putting the cart before the horse! If we’re not pro-actively listening to our target audience, we often try and market what we think they want or need instead of what they actually desire!

    Very sound advice indeed! Thanks fo sharing it!

  11. When I first read this post I thought, “product fit doesn’t really apply to me I don't sell anything”, then it hit me; I’m my product. I’m in the entertainment business, which is all about convincing casting, “why you need me”. Now I have a new approach thanks to this post at auditions I can start thinking “What need is this piece of commercial copy addressing.” Thank you for information!

  12. This is so true. Having a product that the market needs product branding are key. So many business fail and it is sad. Being a entrepreneur is not easy.

  13. I agree with the product market fit. I also think this limits ingenuity. The Stone Age did not end because we were running out of stone, or that our ancestors were tired of using rock clubs. Sometimes, you have to look at that market and decide if it needs something new, or changed completely.

    1. Glad you agree, William. The catch with looking at new products is that it's really easy to come up with a product that the market isn't ready for yet. If you do, you will fail, unfortunately. And someone else will succeed with it in the future.

  14. I agree that market-fit is important. Whether it is the most important thing to entrepreneurial success I'm not sure. Marketing and cost-effective production, among other things, figure into success. I do feel that determining what the market wants or what it is ready for, even if it doesn't know it yet, is not an easy thing to do.

  15. Having the right product to market and then settling on the best marketing strategy for it are key. If you don’t have the right product at the right time, it will be an uphill and probably losing battle.

  16. I completely agree. If you don’t have a product that the market needs and wants, it doesn’t matter how brilliant your marketing plan may be. It’s so simple, but so fundamental. The hard part is knowing what the market will want!

  17. Great post. I was just explaining this to my son who is taking a business course. The example I used was the Swiss and the introduction of the digital watch. Though they invented it, they did not appreciate that the market wanted it, so allowed Seiko to release the watch and with it, the hold the Swiss had on the market place.

  18. Very true what you say in this post. Many people I know import great ideas overseas and experience big FAIL in our local markets because either the market is not ready for it or they fail to come in as game changers. Not all markets are the same and it is key to know your market and maybe work on getting on board opinion leaders to make the product a must have.

  19. Simple but true. Unfortunately people or companies launch products just because they like them without determining if that is what the general public desires. They could avoid the “I Like It” syndrome by paying close attention to trends and the ebbs and flows of the public demand. Matching your product to public demand isn’t easy but that may be what sparks an idea that could grow into huge success.

  20. Totally makes sense. You can go on and on about execution, financing, leadership, etc., but if no one wants what you've got, none of it mattes. One of the reasons why it isn't that easy to find out what the market wants is that the market may not know. Consumers only know the products that they have seen and used so far, not what they might see or use in the future. Having that vision is a key to success.

    1. Glad you agree, Ken. You just have to make sure you don't go too much into the future though. Personally have visions and want to do things long before the market is ready for them.

  21. Hello Catarina

    Another great post. This message is right. There are many companies that come on surface offering some product but public sometimes do not need that product and they have to go in back ground again.
    Its nice to keep ear to the ground, it can help understand what is needed at a particular time. Entrepreneurs can be successful if they can understand it well what the market is demanding.
    I am not into any type of business but your blog can help many to boost their business.

  22. The product/market fit is so basic that I can fully understand people overlooking it. When going into business you do all the necessary things like make up a business plan, how to market the product, etc. but you seldom start with Is this something the market wants. I guess what I’m trying to say is that we expect to mold the market to our product rather than give the market a product it wants or needs. Really something to think about.

  23. Absolutely! I read a supreme article about blogging which can be linked to this entrepreneurial concept. You might write wonderful articles but unless you target the market who will read them and keep coming back to your blog, you won’t get traffic.

    1. True, Jen. But when it comes to blogging it's also important to write about something that is not already covered by half a billion people all over the world. But for some reason that kind of niches seem to the main choices of an abundance of bloggers.

  24. "If the dogs don't want to eat the dog food," I love that. Perfect metaphor which should lead those of us in business to find out what the dogs DO want to eat.

    You mentioned the entrepreneurial failure rate in Sweden, I think in the USA start up failure is somewhere around 80%.

    I usually tend to be too early, unlike the indisputable fact with Apple being always on time. I cannot think of a time when they have failed.

    As always, insightful Catarina.
    My recent post Introvert Friendly Guide to Holiday Exercise

    1. Are you also too early, Pat. So am I. One example is how I lived my life all over the world a generation ahead of time. And my father was even earlier. In the 50s he lived and worked in London. He picked out innovations that he believed in that became huge a couple of decades later. Disposable barbecues, for instance.

      1. Sounds like you and I are "change leaders," Catarina. About 3 to 5 years before the yogurt shop craze, a neighbor and I wanted to open just a small, local shop. Then when she moved away, the fun and steam of the idea just melted. Other things like that were just, too early.
        My recent post Introvert Friendly Guide to Holiday Exercise

  25. Andy Rachleff said it succinctly. I have an internet business, but just putting up the website and praying is not how you succeed. I have spent thousands of dollars on the site. My goal that I have been working on is finding will my products will work. Getting a better understanding of my customers. Simple advice but woth taking note
    My recent post How to Stimulate Creativity

  26. Wow! Way to bring the most basic thing to the forefront! I completely agree that customer/product fit is has to come first, yet it is often the most overlooked. Entrepreneurial success depends first on this, even before execution. Good one!

    1. It's a good one, isn't it, Jacqueline. Most people fail to come up with this overlooked fundamental answer. Guess how many who have not watched the video come up with passion, determination and so forth. Good luck with succeeding if you haven't got a product customers want:-) No determination in the world will save you.

  27. A market orientated company puts the customer at the “heart” of the business; all activities in the organisation are based around the customer. The customer is truly king!. A market orientated organisation endeavours to understand customer needs and wants, then implements marketing strategy based on their market research; from product development through to product sales. Once sales have begun further research will be conducted to find out what consumers think about the product and whether product improvements are required. As markets continuously change, market research and product development is an ongoing process for a market orientation company.

  28. planning, organising, directing, co-ordenating with the worker etc are most reasons to be success for the enterprenuer.

  29. It it totally key. As the guy said, if the dogs don't like the dog food… Developing a niche is the real kicker, witness the ipod etc. Trying to think up something that people don't even know they want is the ultimate in getting a foothold on commercial success. That said I do think that execution is incredibly important as well. Cash flow is a sure fire way to send a business down the tubes, so there's a lot of aspects that make up the whole picture. As always a good blog Catarina. Thank you.
    My recent post MuseMedium: Books and David Mitchell

    1. Yes Mompreneurmogul. True that you will have to ignore the people who tell you it will not work. But that will not be enough if the market does not want you product or service:-)

  30. Hi Catarina,

    I understand your post. I have to say something about my distant observation of people of your home land, Sweden. You say that as many as 1/2 fail as those that are successful. I know the Nordic people to be very intelligent. I dated a beautiful Norwegian for a number of years. Wonderful girl…much smarter than me! Wouldn't you rather these ladies and gents try (even if they have work to do) than to be someone that didn't even give it a go? Agreed about the details, but it also takes a bit of real world failure to teach you to become a success,


    1. True Brian. However, do you know that if you fail in Sweden and owe money to your creditors you are finished since you cannot even get a mobile phone account? You are blocked from doing anything and will have to live on a bit more than $1,000 until your debts have been paid off. If you owe a lot your life will be ruined. It's easy to do what you suggest in the United States but not in Sweden. In your country it doesn't matter if you have gone bancrupt here it is shameful.

      1. Wow Catarina, I did not know that. That is a scary concept, and yes, one I am not familiar with. The problem it creates for the US is that we let it go (debt), and we are in debt to the entire world, especially China while we place band-aids on our economy along the way. Thanks for the information,

        1. Yes Brian, but you are talking about sovereign debt:-)

          If an American goes bankrupt he is regarded as someone who tried and it's almost positive. In Sweden he becomes persona non grata.

          1. Somewhat agree with the generalization. However, also in America, if you have concrete evidence of bad business dealings, especially in our local markets and counties, of a company, it's owners or group of owners and they have pulled some really bad moves, those people may declare bankruptcy, but they would certainly have to relocate to start-up again. I live in one of the most conservative States in the USA, and if that happens around here, you are finished. Best move to California!


          2. Brian, what I described happens to all owners of businesses that fail. Not just the bad apples. It's enough that you have a client that doesn't pay:-) There is no comparison between the US and Sweden when it comes to this. Keep in mind that as many businesses go bancrupt as there are start-ups and you will understand how many people's lives are ruined. However, I don't think it's possible for an American to understand how bad it is here. It's simply incomprehensible, even to me because I have lived most of my life abroad.

  31. This makes me think about my struggle with genre as I am making my way back to the world of creative writing. In this case, the dogs don't want to read literary fiction as much as they want to read adventure and romance. Finding the balance between the integrity of executing a written work I can be proud of crafting and yet it remaining a story with broad appeal is indeed a challenge.
    My recent post Book Review: Ava by Ashley Barron

      1. I wish I could find a way to give romance stories set in national parks a go, but the thought of writing romance isn’t a market I find appealing.

  32. I think that genes play a role in entrepreneurial success, but not always. It really makes me sad when I see a business that was built from the hard work of the parents or grandparents fall to pieces when taken over by the next generation. Sometimes, when things are handed to us on a silver platter, we don't appreciate the sweat and toil that went into building that business and think it will just run itself. When the drive has been removed, the enterprise will often fail.
    My recent post tips to make you a better blogger

    1. True Doreen, when we are lucky to have entrepreneurial genes it makes a difference. But even then it can be difficult if you decide to build up a company based on a product or service the market doesn't want.

  33. I believe the reason for entrepreneurial success is not giving up. A lot of people gives up when things get tough or made a few mistakes. To become successful, i believe one must endure all the hardship and learn from it. My 2 cents =]

    1. In other words Tommy, you don't agree that the most important thing is product-market fit. Not giving up is crucial if you have product-market fit. If you keep on working for succeeding with something the market doesn't want however, you will just lose money.

  34. Nice blog. There is a similar approach to publishing periodicals. The most important thing is if there is an audience for content. Great reminder!
    My recent post 100 Great Memories and More!

  35. Catarina, finding out the need for a product is very important. Many people start on Etsy to sell handmade stuff and complains about not getting any sales. It is not the marketing, it is the product, that they try to sell is the problem.
    What a person looking to buy handmade is looking for?
    How to find it is the next question.
    Thanks for the thought provoking article.

    1. There are many ways to find out if the market wants a product/service. Focus groups is one option. Don't think there is one answer to how to best find out if the market wants what you have to offer. Most likely the answer is whatever works is fine:-)

  36. This is so true. His metaphor of if the dogs don't like the dog food is terrific. And as you say in your post, if you product isn't wanted, it will fail.

    Spot on Catarina! Thanks.
    My recent post How government resources assist women owned small businesses

  37. Catarina, what Andy says seems so obvious, but too often creators of a product get so caught up in the desire to produce and create they have a hard time seeing that the market isn't there. Years ago I worked on a project in which the main creator loved it, but I had my doubts. Sure enough, it fell through the cracks and never went to market. Hard to take those blinders off.

  38. Absolutely – there's no point in having a solution for a problem that doesn't exist… Entrepreneurs have to be sure that the market wants what they're offering. Once they have that assurance, then passion is the next most important thing for the entrepreneur.

  39. It is simple advice and very relevant…how to do the research and identifying what is needed is a huge task. I'm not sure I'd even know where to begin.

    By the way, I have nominated you for a Sunshine Award. The link is below 🙂
    My recent post Sunshine Award for Bloggers

  40. This is such a simple message and it's so true. The fact is, many companies/individuals launch a product because they like it. That very product may not be what the general public sees as something they desire. Keeping our ear to the ground and paying close attention to the ebbs and flows of the public can yields a great deal of intel regarding the current trends, avoiding the "I like it" symdrome. That may be what sparks an idea that could grow into a successful venture or product. It's not an easy thing, matching a product to what the public wants, but when you do it's amazing to see what happens. 🙂
    My recent post Co di Sasso Cabernet Sauvignon & Sangiovese 2011 Wine

  41. Catarina – This is spot on. I am an Ops guy and understand the importance of the service aspect of products sold. Got to make sure the market is satisfied with the customer service aspect of the product and how the organization handles "problems" that may arise.

    Thank you for sharing!
    My recent post Thing 1 and Thing 2

  42. Hi Catarina,

    It is the simple most basic thing that so many overlook and one of the most important. I don't however think it is the most important as there are a number of other factors. I have done a lot of new product development and like your BBQ example had the right products, however the market wasn't ready. One thing that helped overcome this is a model I developed over many years that shows whether the idea has legs and should be pursued and takes into account all the factors including product-market fit.

    One example I had was a product I had to launch and the market wasn't ready or thought it needed. The message the head office overseas wanted us to promote it was wrong for our market. It would have meant a change in behaviour and was against their attitude of the day. From research we found a message that changed behaviour by building on their current attitudes instead of trying to change them.

    It also comes down to your observation skills and experience, knowing your customers and being able to interpret the information. Too many take what customers say literally and that is often misleading.

    My recent post The Simple Advantages Of Having A Marketing Strategy

  43. Catarina — such simple advice, yet so essential. I always marvel that until about 20 years ago no one thought to take that ancient invention — the wheel — and attach two of them to the bottom of suitcases. Millions of people struggled to life, much less carry, their suitcases. Then an airline pilot "invented" the suitcase with wheels. To me, that one of the most impressive case studies of product/market fit.
    My recent post Giving Thanks With Jobs for Our Veterans

  44. You nailed it with this one! That is the most important thing before all else. You will not be successful if the market doesn't want / need / or isn't ready for it. Seems to me that doing your research ahead of time is essential. You do not want to invest huge dollars until you know your product has a chance at success. How you test the market for receptiveness to your product is another thing entirely. I think it depends on the product itself – service or goods – as to how you proceed.
    My recent post My Blogging Platform

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