Where are your “invisible asymptotes”?

Eugene Wei’s Invisible asymptotes is a long, excellent article about the importance of not just thinking about product-market fit, but also product-market unfit:

For so many startups and even larger tech incumbents, the point at which they hit the shoulder in the S-curve is a mystery, and I suspect the failure to see it occurs much earlier. The good thing is that identifying the enemy sooner allows you to address it. We focus so much on product-market fit, but once companies have achieved some semblance of it, most should spend much more time on the problem of product-market unfit.

For me, in strategic planning, the question in building my forecast was to flush out what I call the invisible asymptote: a ceiling that our growth curve would bump its head against if we continued down our current path. It’s an important concept to understand for many people in a company, whether a CEO, a product person, or, as I was back then, a planner in finance.

He goes on to discuss those asymptotes for different companies (for example, shipping fees for Amazon). Another interesting bit:

We speak often of the economics concept of the demand curve, but in product there is another form of demand curve, and that is the contour of the customers’ demands of your product or service. How comforting it would be if it were flat, but as Bezos noted in his annual letter to shareholders, the arc of customer demands is long, but it bends ever upwards. It’s the job of each company, especially its product team, to continue to be in tune with the topology of this “demand curve.”

I see many companies spend time analyzing funnels and seeing who emerges out the bottom. As a company grows, though, and from the start, it’s just as important to look at those who never make it through the funnel, or who jump out of it at the very top. The product market fit gradient likely differs for each of your current and potential customer segments, and understanding how and why is a never-ending job.

Figuring out what your product’s invisible asymptotes are sounds like a really good thought process to me. At the beginning of the article Eugene mentions one way Amazon tried (and succeeded) in answering this question:

For people who did shop with us, we had, for some time, a pop-up survey that would appear right after you’d placed your order, at the end of the shopping cart process. It was a single question, asking why you didn’t purchase more often from Amazon.

Another technique he mentions:

One approach I’ve taken when talking to companies who are trying to achieve initial or new product-market fit is to ask them why every person in the world doesn’t use their product or service. If you ask yourself that, you’ll come up with all sorts of clear answers, and if you keep walking that road you’ll find the borders of your TAM taking on greater and greater definition.

A good way to frame this could be to ask yourself something like this:

If we didn’t change anything about [product name], at what point would we hit a growth ceiling, and what are the factors that would cause that?

If you can have a reasonably confident answer to where the S-curve inflection point will be, you can start planning on avoiding it early. That’s a worthy effort, and definitely something I intend to think through for our products.