Product Market Fit vs. Solution Fit with David Hirschfeld

In this insightful episode of "Definitely Maybe Agile," hosts Peter Maddison and Dave Sharrock welcome David Hirschfeld, founder and CEO of Tekyz Inc, to discuss the complexities of effective product management. A 35-year software development veteran and former physics student from UCLA, David brings a unique perspective shaped by leadership roles at tech giants like Computer Associates, Texas Instruments, Intel, and Motorola.

The conversation explores the critical balance between product market fit and product solution fit, with David emphasizing why focusing on customer problems rather than product features leads to greater success. Whether you're a startup founder, product manager, or development team leader, this episode with the host of the Scaling Smarter Podcast provides actionable insights for creating products that truly solve customer problems and generate sustainable revenue.

This week´s takeaways:

• The most valuable customer conversations happen when you ask about their problems, not your product features.
• Successful product management requires understanding both the perceived impact of a problem and its actual cost to customers.
• Successful founders and product managers are those who love understanding customer problems and spend their time learning about customer challenges.

Chapters

• 0:04 Introduction to Definitely Maybe Agile
• 0:33 David Hirschfeld's Background and Experience
• 1:22 Defining Product Market vs Solution Fit
• 3:15 The Economics of Problem Solving
• 7:23 The Mom Test: Effective Customer Conversations
• 12:01 Black Robe vs White Coat Approach
• 14:38 Utility vs Beauty in Product Design
• 24:38 Key Takeaways and Closing Thoughts

Transcript

Peter : 0:04

Welcome to Definitely Maybe Agile, the podcast where Peter Maddison and David Sharrock discuss the complexities of adopting new ways of working at scale. Okay, hello and welcome, and so today's episode. I have two Daves with me, so I have a Dave and a David. Maybe we'll stick to Dave and David to keep things clear for our listeners. So, as usual, I have my good friend Dave and we'd like to introduce you to David Hirschfeld. So go ahead, David introduce yourself.

David Hirschfeld: 0:33

Great, and thanks Peter and Dave, and thanks for having me on your show. I'm , founder and CEO of Techies, spelled T-E-K-Y-Z. We're a software development company. We build custom software for all kinds of companies and usually end up being outsourced IT for the companies we build software for and even building some software for ourselves. Founded 18 years ago now and worked with a lot of startups, and we can talk about the product management journey with an existing company or a startup, because product management is kind of at the core of the whole thing.

Peter : 1:12

Awesome. I'm looking forward to the conversation. Maybe if we start off with some thoughts around product management, how would you define product management for the organizations you work with?

David Hirschfeld: 1:22

For me, product management is focusing on a blend of product market fit and product solution fit. Now people get confused with the difference between those two words. Product market fit means that people want to pay enough pay money for the product that you built in enough numbers with a. Then you figured out the sales process that you can get a three to one ratio between the lifetime value of that customer versus what it costs to acquire new customers right, so that way you've got enough profit you can reinvest back in the business and grow in scale. That's product market fit.

David Hirschfeld: 1:56

But once you've got people buying your product, then you need them to engage and use it and that's product solution fit. And there's a lot of tweaking and tuning that goes on, especially in the early days with a product to basically provide the value that you're promising to people. With the product you only know that they need it and that the cost and the value proposition are there. With product market fit, but not necessarily that it's actually in day-to-day life solving a problem in a way that makes them engage and work with the product, and that's product solution fit. And product management is this very complex dance between those two things.

Dave: 2:34

David, if I can just follow up on that, product management and if I'm coming from an agile background, product ownership are often either conflated or separated or treated in lots of different ways. How you're describing, on the one hand, that product solution fit which feels very much more focused on customers and how they're using the product and whether or not the product is serving their needs in that way, product market fit is a little bit more on the economics of have you got something which has a market and gives you enough? You know there's enough need there that you can fund that business. Do you see a natural split, for example, with product manager focusing on one product owner on another? Do you not differentiate through that? How would you bring that product owner product manager conversation to the fore?

David Hirschfeld: 3:24

It's really it's a great question. Let's say you're a founder with a new idea, right, and I deal with a lot of founders in the very earliest stages, so this is something and I'd been a founder more than once, and both for successful startups and failed startups, so I understand the mistakes I've made as well and the mistakes other people make from this. When you were talking about the product market fit piece, right, so you can basically create a viable business if you've got product market fit and the product you've built is usable usable enough that people don't abandon it once they get it. So I separate the two halves of this, which was your question, like this there's a marketing objective, right, and so you have input from marketing and hopefully that marketing is very clinically driven. So they're spending all their time understanding the problems that customers are dealing with and the value of the cost of those problems and the perceived impact, because those are the two main things you need to know.

David Hirschfeld: 4:26

From a product market fit perspective, can I get people's attention because this problem is threatening enough? That's the perceived impact. And what's the cost to them because they're struggling with this problem? That's the cost side, right, because if the cost isn't high, I can't charge much and if the perceived impact isn't high I can't get their attention. So you got to have both those things high. So this is product management from the product market fit side. Now you may nail it with that and create something that looks like something people need and they're starting to buy at large numbers Now, getting them to engage with it so that you keep those customers over a long period of time.

David Hirschfeld: 5:07

That's the division where product market fit and product solution fit kind of divide.

David Hirschfeld: 5:12

But I see both of them as a product management problem. If a product manager spends their time listening to customers from the standpoint of how much is the thing they're asking for, truly a problem is how much are they and how much is the thing they're asking for truly a problem is how much are they and how much is this problem perceived as being significant to them, threatening to them? It all comes down to how much you feel threatened by something, whether you do something about it or not. I know you know we all want to be positive and think of all the great things that we're doing for the world, but the truth is, is that we're only doing good things if we're taking pain away, even vacations, right, if you think completely different industry. A vacation is only something that sells because people are afraid that they might miss out or that they're afraid their life is going to be boring, or that they don't have enough family time, they haven't created enough memories and they get excited because this is a way to eliminate that you know that fear.

David Hirschfeld: 6:03

So I fought that idea for a long time but I've given up to it because I've just seen enough evidence that's really driven like that. So now good product manager, from my perspective, understands, focuses on the problem. It's not about it's not about the product, it's not about you know, founders that fail love the product and believe in their vision. Those are like code words for I'm going to fail, and product managers, I feel, are the same way. Founders and product managers who are really successful are the ones that love the problem. They and they want to spend all their time talking to customers about their problems.

David Hirschfeld: 6:41

How much does that problem cost you? How have you mitigated that problems in the past? What personal impact does that have on you? What are some ways you've thought of solving these problems in the past? Right, things like that. Never talking about the product that's the other thing about product management is. Talking about features is a sure way to get conflicting information from customers, because customers are going to tell you what they think and often they don't know. They're going to try to make you feel good if you suggest a feature and say here's a feature I'm thinking about releasing, and they want to make you feel good and they might say that sounds like a great feature without really having given it any real thought. But if you talk to them about their problems, they're going to be really honest about that and then you can get truth from that.

Dave: 7:31

As you're describing that.

Dave: 7:32

One of the things that strikes me just from the conversations that I've certainly had with product management organizations, product management teams and product managers, is underlying everything that you've just been saying there, david, is the presumption of an understanding of the economics of that problem and the product.

Dave: 7:51

And so many times I work with product management teams or product managers who have identified the market and the closest they really think about on the economics is have we got a market that's big enough that we can go in and it's sort of attractive to us as a business? Number one and number two how do we deal with pricing? Rather than so much of what you're describing there is understanding the problem and the needs and finding a balance where there's enough of a driving need and there's enough like cost to that need that they're prepared to pay money to see a change. And that whole economic side of it is often either dealt with early on to say, have we got a big enough market or if we price it this way, we're going to get where we need to go, and misses the opportunity to really kind of focus in on where the value is in that product that we're trying to bring to the table. What's the problem that we're really trying to solve?

David Hirschfeld: 8:51

Exactly, yeah, that's been my experience as well. And if you focus on the problem and you focus on the problem and you focus on the customer and what the problem means to them, then the solution is really the natural conclusion to that process and you don't need to worry about the pricing model from an economics perspective if you really understand the problem and the cost, because the pricing model just surfaces automatically right and not only the pricing model, but the delivery model. Right. How you deliver value because that may look different than other products you have in terms of how you charge for it and how you deliver value might be a completely different pricing model because of your aligning it with the problem and making it easy for somebody to then mitigate the problem in a way that seems very cost-effective to them, which may be a lot more money than how you would have charged if you were looking at it as a pricing problem.

Peter : 9:46

Yeah, there's a piece where because there's an anecdote we quite often use in Agile a variant of the story of a person who they go and they survey people they announce new colors of headphones. You're going to have blue and yellow and green and black. And they ask everybody in the audience what they think. And everyone in the audience goes. They'll have the blue one and the green one and the yellow one, and then on the way out they can pick up whatever color they want and everyone just picks up black. And when asked why they pick up black? Because well, that's the one that goes with my outfit, it's the one that goes with my costume, the one that goes with my outfit, it's the one that go in my car. So there's this piece around. You got to talk to your customers, you got to find out what they want, you got to do it in the right way and you got to understand what is that market solution.

David Hirschfeld: 10:33

If you ask them about what they like about your features, you'll never get very valuable information from them. You can watch them use your features and get valuable information, but it's too late because you've already made an investment in creating it. But if you ask them about their problems, then you will get honesty from them and especially if you get to know who your customer is and you're asking questions that are important and personal to what they do in context of the thing you're building.

Dave: 11:01

David, if it's okay, can we explore a little bit about your experience in actually talking to prospects or potential customers or target customers?

Dave: 11:10

Because, again, when I talk to a lot of product managers and product owners, one of the things that I ask that they consider is building a habit of being in front of prospects and customers like all the time, like not the number of times that we talk to, say, a product manager and the last time they were actually talking to customers was many months ago. Well, there's a gap there and just being able to observe what's there, you know what they're up to, but then that there's an element of how do you interact with customers and you're talking about observing how they're up to. But then there's an element of how do you interact with customers and you're talking about observing how they're behaving, but there's more a case of I mean, in a design thinking mindset, this is the empathy, interviewing and that sort of observation. When you're interacting with customers or potential customers, what is the most valuable interaction, that you try and get valuable information, and how might you get it?

David Hirschfeld: 12:03

Okay, so I try to follow some of the precepts I read in a book called the Mom Test, and it's one of the. Are you familiar with that book? Yeah, it's a great book, right? You know I've been talking about this concept for a long time, but I didn't have the detail and the framework that he has in that book. It was really well done.

David Hirschfeld: 12:22

Basically, the idea is you want to start a new product, right, you want to create a new product or a new business, and if you go and ask your mother assuming you have a good relationship with your mother right? You go ask her what she thinks of your idea and she's going to say oh honey, I think you're so smart and it's a brilliant idea. I know you're going to be successful, right? Which is totally not helpful and misleading information if you believe what she's saying. So the question is the book's sole premise of it is how do you ask your mother questions about this idea for a business that you want to start and get honesty from her? That's valuable. And you do that by never talking about the product. You only talk about the problem and the history they've had with the problem and products they've tried to use to mitigate the problem and you never bring up your product or features. Because if you do as soon as you do, then that will start to lead them, and in ways that may or may not be effective in terms of knowing what it is they need, because if you really understand the problem really well, there's a natural way to mitigate it.

David Hirschfeld: 13:29

If you're talking about software to automate something, for example, then that becomes very right. And it's not always what we would design initially, even though what we designed may look great and seem great when you put it in front of somebody. But then, as soon as they start to use it, you start to realize you built the wrong product, assuming you can get them to buy it. That's the idea of product solution fit. If you can't get them to buy it, then you really missed customer in the problem because you're not saying anything compelling to them that makes them want to spend money on the thing that you've got. That you were sure. So when I talk with new founders right, and they're looking to build a software company, they always come in with vision and belief in themselves and what I call they've got black robe syndrome.

David Hirschfeld: 14:14

You know, they're Basically wearing this robe. They believe if they stay true to their vision and their course, they will be successful. And I slowly try to peel that black robe off of them and wrap them in a white coat and turn everything into an experiment. So if I have a customer that's telling me that they deal with this problem costs this much and this is how they've dealt with it in the past, I say okay, maybe that's true of the market and maybe it's not. So now I need to validate this information with somebody else in the same niche, as a similar level stakeholder in the same position, if I believe that's the niche that I'm going to try to penetrate.

David Hirschfeld: 14:57

And then I'm going to talk with two or three or four or five people just like that and ask the same kinds of questions and start to triangulate how come they're not struggling with the problem in the same way? Have they found other ways of solving this problem? Have they just given up on the problem? Do they not get management support, stakeholder support at a higher level to do anything about the problem? So yeah, it's a problem, but so what right? This doesn't threaten me because nobody cares if I solve it or not, even though it's a really costly thing, right, but I'm not threatened by it because nobody cares if it gets solved.

Dave: 15:34

I was just wanting to say, like that identification, that not every problem has a solution that people are prepared to pay for. I mean there's lots and lots of problems that people just go. Yeah well, we're just going to live with it and it's costly, but we're going to live with that. I think that's great, yeah.

David Hirschfeld: 15:51

And I want to just jump in two halves to that too. Right One is I'm never going to get any support to fix this, because everybody in our industry deals with it and our management's focused on much bigger initiatives, and so I'm stuck with this. Right, that's for if you work inside a company or if you're a smaller company. But it could be the opposite. I hate this thing. I'll do anything to fix it. Oh, it costs more than a dollar. There's no way I'm going to spend that much money for it, because there's no real cost to this. It's just something that makes me feel like life is, you know, not worth living if I don't deal with this thing. Right, but you don't want to go after those either, because you can't make any money on that?

David Hirschfeld: 16:32

Yeah, that person just needs to go see a counselor and get used to living with that issue.

Dave: 16:37

I was going to say that might be.

David Hirschfeld: 16:38

Yeah, that's why I say both of them, both of those independent things, perceived impact and actual costs. Both have to be high.

Peter : 16:46

Yeah, I see that a lot in the infrastructure space. When, especially if you've got capital which has been sitting there, invested in something that should have been retired and wasn't, but now it's spent cost and at that point replacing it it's like well, it works, why would I change it?

David Hirschfeld: 17:02

Costs are changing and it might cost a lot, but you can't commit get your management to somebody to allocate the funds for it, because it's not broken.

Peter : 17:14

Yeah, and because there's a cost of execution, there's a cost of change, there's a cost of all of these other pieces Although I've seen some decisions where there are also politics play into this too that even when it's a well, we can save you $700,000 or some large amount of money quite easily for a minimal amount of effort. And the answer is well no, because I have these relationships and if I doing this might hurt other relationships in other places. So that's that.

David Hirschfeld: 17:44

Right no perceived threat, because I'm struggling with this problem that goes right back to that right no will to make a change. And also, what's the risk of making a change? Maybe it's expensive and we're really afraid of this thing. But what's the risk if I try to change it and it doesn't work? So all that goes into this kind of like. You know, whatever the person's perception is in terms of how threatened they are by this thing it had, the risk has to get to be really high that this thing will fail versus the risk of if I don't make the change or if I make the change. So.

David Hirschfeld: 18:22

But product managers, I find, often focus on all these little feature things that don't get right because they're wearing the black. The product managers put the black robe on Right and they also feel like their job is to work with development. That's where I think product managers lose focus. They think they are supposed to be doing all of this work to make sure development's clear on what they're supposed to do, as opposed to understanding what the problems that the customer has and starting to drive direction from that perspective.

Dave: 18:52

I don't know if you find that a lot, but yeah, yeah, I'm just thinking, as you're describing that, david, I'm thinking that there's an interesting consequence of being focused on the features. So one of the things that I'm often seeing in product management conversations that I have is that as a product manager trying to get product built, there's often a lack of authority on the product management side to actually get the right people in the room to build what's needed. And if you're focused on these are the features on my product roadmap then it's really difficult to be persuasive in saying this is what has to be built next. And so then getting access to limited capacity on the development side or limited skill sets or whatever it might be, can be really difficult in the larger organizations. But if your product manager is focused on the economic value, the problem itself and how big of a problem it is and how much attention it's getting, that suddenly gives a lot more weight to the request, the demands of the product manager on the delivery teams on the development side there's.

David Hirschfeld: 20:01

There's an equation that you can make there too, um, and that is, if you look at everything on your roadmap and you put a value to it, from how much will this drive revenue right? Um, in terms of the cost of the problem it's solving and whether or not it's something you're going a chargeable feature or um or chart, and how much you're going a chargeable feature, or, and how much you're going to charge for to mitigate that problem. If you put that there versus the cost to build the thing, versus the time it takes and the risks and versus other things like we have competitive pressures and we're going to start losing customers if we don't address these other issues, which is not really a generating new revenue feature, but it's keeping our existing revenue current and then model those things right. So how fast are we going to lose customers? How fast will we get new customers and new revenue? And it's not an either or. It's just having a clear understanding of that equation, because if you're going to get new customers much faster than the ones you might lose that don't have certain features, then it seems like an easy decision to make. But if it's the other way around, then you need to do things to shore up or catch up with a competitor in a certain area where they're going to be pulling customers away from you.

David Hirschfeld: 21:18

I don't think product managers very usually do that sort of thing and I'll give you an example with CRMs, with some of the CRMs on the market and I've. One of the things they don't seem to understand is that users of their products are utility users. They don't need it to be pretty, they need it to be highly efficient. Lots of information packed close together on the screen and there's a very different and that solves a big problem. It makes it very easy to deal with a lot of information quickly and navigate and move around.

David Hirschfeld: 21:51

But instead a lot of these CRM vendors just naturally create these really pretty screens with all this white space, these rows that have big, lots of information in one row. And I'm looking at a list of customers, I can only see 10 on a screen instead of 40 or 50. And that is enormously frustrating and I know they're losing customers to that, but they're focused on new features that they can generate more money so they can compete better, instead of just building something that really has value and solves problems. I've even gotten on the phone with a couple of different CRM companies because this bothers me so much right, with their product management teams and I say this and they don't hear it because they're not focused on customer problems. They're focused on trying to they're trying to create revenue with new features instead of spending their time really working with customers on the problems.

Peter : 22:46

Yeah, there's a lack of alignment to what the organization is trying to do, what goals they have, and there's nothing to say from a product ownership perspective. How do I quantify that? I found in a lot of the organizations we work with, that's one of the first things we end up working with them on, under whatever framework or guise it needs to be, whether it's OKRs or balanced scorecards, some form of saying OK, how do we start to quantify this so that when we start to look at, like, what's this thing we're going to do, how much impact is it going to have, can we quantify that? Does it align to our objectives? Does it align to what we're looking to do and which helps with prioritization and deciding? Well, what things should we not do Because really it's not going to have the impact we're expecting?

Dave: 23:28

I was, Dave, just wondering about how much the buyer versus the customer or the user comes into that, Because in the CRM space the utility users, the ones who are using that product day in, day out, are invariably not the ones actually making the decision to use that CRM.

David Hirschfeld: 23:48

I was thinking of the SMB space, not the larger company. So, like the Salesforce, for example, actually does address this really well, right, but their focus is not the SMB space. But the ones that focus on the SMB space are trying to make the products really pretty instead of making it really efficient.

Peter : 24:08

And what do you mean? I've spent some time going through CRM solutions and haven't found one that doesn't make me want to throw things at the screen.

David Hirschfeld: 24:14

Exactly Just because of the way the screens are laid out right. Yeah, I don't know about you, but my eyes start to cross when I see all that white space. I just want to see things packed together, because I'm trying to do a lot really fast. I want all that information right there. Anyway, your clicks Right and I've got by the way just with techies.

Peter : 24:34

I've gone through several CRMs just because of this stupid thing, so I'm not the only person that they're losing, so we're almost at the end of our time here and I want to thank you, david, for all the great conversation and I'm sure we've all enjoyed it, and we usually like to finish up with sort of three things, and with three of us we get one each. So I think I will start with Dave.

Dave: 24:57

What's your? I'm going to come back to the Mum Test, that book and I asked a question about just how to talk to prospects and customers and I think drawing that whole idea of don't talk about the product, don't talk about the features, talk about the problem was that I think I'll add that into many of the conversations I have, because you know that's a it's a great kind of walk away piece of information or knowledge to take with you and dav, if you are in love with your product and you're in love with and you believe in your vision, then you need to step back and reconsider this business that you're in, or at least the position you're in in the business, because being in love with the product doesn't serve you.

David Hirschfeld: 25:49

Being in love with your customers will serve you. Having vision doesn't serve you unless you're Steve Jobs or Elon Musk or whatever right Having. But understanding and being in love and wanting to talk to customers all the time about their problems will serve you and continue to make you better and improve the product, even though you're not talking about the product, and generate more revenue.

Peter : 26:13

Yeah, I love that. I think that's a great framing, so really appreciate you sharing. I think if I was going to add the third point in, I think I liked your framing of things in terms of the product market fit and product solution fit right at the beginning. There's a useful framing model to think of the sort of different modes under which we operate, because it ties in very well to the conversations we end up having with organizations around. Well, what should our product managers be doing and where should they be focused? Because very often they're not focused in the right place. I'd like to thank both of you, as always, and so we'll wrap up there and I look forward to next time.

David Hirschfeld: 26:53

Yeah, thank you Peter, thank you Dave, this was really fun.

Peter : 26:56

Thanks a lot, david, thanks Peter, thanks.