Ads Are Not a Great Tool for Finding B2B Product Market Fit
Definition of Product Market Fit:
Product Market Fit (PMF) has been fortunately defined by numerous experts:
Marc Andreessen: "Product-market fit means being in a good market with a product that can satisfy that market."
Sean Ellis: "Product-market fit means being able to get the right product to the right people and ensure they derive significant value from it."
In general, ads are not a great tool for figuring out product market fit at the beginning of your start-up journey.
Ads are scalable, quick to start, and effective for many B2B companies. However, there are two main reasons we don’t recommend using ads to find B2B PMF:
Ads are Expensive: If you don’t have a product market fit yet and are not sure which industries to target, you’ll have to spend significantly more testing different verticals and promoting various features and use cases compared to having a known target market.
Scaling an Effective Ad Account is Difficult: Without established PMF, it is challenging to determine if your ads are ineffective due to an incorrect strategy or because the market is not ready for your product.
How to Find PMF Without Ads
To find Product Market Fit, do things that don’t scale and engage extensively with potential customers. Paul Graham of Y Combinator has a great article on this topic: Do Things That Don't Scale.
How Should Early-Stage Startups Use Ads?
In the early stages, your goal should be to learn about your customers’ needs rather than to immediately profit. One effective approach is to build content and promote it with ads. This content can include articles, guides, checklists, templates, tools, and more.
Both Facebook and LinkedIn offer Native Lead Ad placements where users can fill out lead information directly on the platforms. You can use these placements to advertise gated content. When someone downloads it and provides their email or phone number, you can reach out to start a conversation.
Golden Rules for Effective B2B Content
Focus on the Target Decision Maker: Ensure the content is hyper-focused on your target audience.
Relate to Your Unique Selling Proposition: The content must strongly relate to your unique selling proposition and the services your company provides.
Be Action-Oriented: The content should encourage the audience to imagine using it and deriving its benefits. Templates and checklists tend to perform better than white papers for this reason.
This content can be repurposed for various uses, including SEO, email nurturing, and sales outreach.
In Summary: PMF and Ads
Find your initial customers by doing things that don’t scale. Once you have a few companies willing to pay for your product and a well-defined target market, you can then use ads to scale. At the beginning, focus on learning from conversations with customers.