The Road to a $100M Company: Finding Market Product Fit and Building Identity-Based Habits


Hatched by Glasp

Aug 03, 2023

4 min read


The Road to a $100M Company: Finding Market Product Fit and Building Identity-Based Habits


Building a successful company requires a deep understanding of the market, its problems, and the motivations of the target audience. It's not just about having a great product; it's about finding the right fit between the market and the product. In addition, developing identity-based habits can play a crucial role in achieving long-term goals. In this article, we will explore the concepts of market product fit and identity-based habits, and how they are interconnected in the journey towards building a successful company.

Market Product Fit:

When starting a business, many entrepreneurs make the mistake of focusing solely on their product, rather than understanding the market and its problems. Brian Balfour emphasizes the importance of "Market Product Fit" over "Product Market Fit." He suggests considering four key aspects when analyzing the market: category, target audience, problems, and motivations.

1. Category:

It is essential to determine the category in which your product fits. Understanding how customers perceive your product and its position in the market can help you tailor your marketing and sales strategies accordingly.

2. Target Audience:

Within each category, there are multiple personas or target audience segments. Identifying these segments and understanding their specific needs and preferences will enable you to create targeted solutions that resonate with them.

3. Problems:

What problems does your target audience face related to the category? By identifying these pain points, you can develop a product that addresses the market's specific needs. Remember that the real problem lies within the market and audience, not just within your product.

4. Motivations:

Understanding the motivations behind the problems your target audience faces is crucial. Why are these problems important to them? By aligning your product's value proposition with their motivations, you can create a compelling solution that drives adoption.

Finding Market Product Fit is not a linear process. It involves iterative cycles of building an initial version of the product, observing who derives value from it, and refining both the market and the product accordingly. Market Product Fit exists on a spectrum from weak to strong, and one way to gauge it is by using qualitative measures like Net Promoter Score (NPS). If your audience is genuinely benefiting from your product, they should be willing to recommend it to others.

Quantitative indicators such as retention curves and direct traffic also provide insights into Market Product Fit. Flat retention curves indicate that customers are sticking around, while direct traffic suggests positive word-of-mouth referrals. Combining qualitative, quantitative, and intuitive indicators can help you assess how well your product fits the market.

Identity-Based Habits:

To achieve lasting behavioral change, it is crucial to focus on building a new identity. Your current behaviors reflect your current identity, so to change your behavior, you need to believe new things about yourself. James Clear's concept of identity-based habits provides a framework for creating lasting change.

1. Decide Your Desired Identity:

Start by deciding the type of person you want to be. What are the qualities and characteristics of this person? By clearly defining your desired identity, you can set the foundation for your behavioral change.

2. Prove Your New Identity:

Once you have established your desired identity, focus on proving it to yourself through small wins. Instead of solely fixating on outcomes, concentrate on the process and the actions that align with your new identity. By consistently demonstrating behaviors that reflect your desired identity, you start to reinforce new beliefs about yourself.

3. Focus on Identity, not Results:

Becoming the person you want to be is more important than achieving immediate results. Motivation may wane, but by adopting the identity of the person you aspire to become, you establish a solid foundation for long-term success. Results will naturally follow when your actions are aligned with your identity.


Building a $100M company requires a combination of finding Market Product Fit and developing identity-based habits. By understanding the market, its problems, and the motivations of the target audience, you can create a product that resonates and drives customer adoption. Simultaneously, focusing on building a new identity and proving it to yourself through small wins enables lasting behavioral change. To achieve these goals, remember these three actionable advice:

  • 1. Prioritize understanding the market and its problems before developing your product.
  • 2. Continuously iterate and refine both the market and the product based on feedback and data.
  • 3. Focus on building a new identity and proving it to yourself through consistent actions aligned with your desired identity.

By integrating these principles into your business and personal life, you can pave the road to success. Remember, it all starts with finding the right fit between the market and your product and believing in the power of your own identity.

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