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How do you measure product-market fit?
You have signups, but how do you make sure that you have the product-market fit?
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Good question, reading a lot about discussions across different platforms.
but reviews and feedback that are not scripted. If they have suggestions and bad comments that you can change
Competitors insights
If you can sustain the customer journey
Use Cases and proper demo (short, clear and direct)
“The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers.”
https://a16z.com/2017/02/18/12-t... ✌️
@ferhan_gul Thanks for sharing. I've read this before and it still keeps me thinking 'is it really possible? how many products had this trend at the beginning?' I've heard some did but haven't seen any in real life example.. if someone has good samples, please share with me.
@imjohnkoo In general, if your customers successfully complete the onboarding process of the product, we can say that the product-market fit of the product is mature. In fact, we can see this in most PMF mature startups. Of course, there are many factors that affect the success metric of PMF.
Product Market Fit is about understanding 3 parameters in your offer:
- The killer feature: which feature/service brings value to your users
- Ideal Customer Profile (ICP): who is you ideal customer profile
- Distribution channel: which channel is the best for distributing your feature to your customer.
===> setting up your business model and your pricing will be a direct consequence of understanding these 3 parameters.
Maybe an unpopular opinion, but I find that many makers/founders see product-market fit as binary (you either have it or you don't) while in reality, it's rather dynamic. Markets are constantly changing, and products (competitors) are constantly evolving — this means that p/m fit at best is something you can accomplish for a limited time.
Venture-backed early stage founders are especially obsessed over p/m fit because it's a box we need to tick to be able to raise more capital. In those situations, investors have pretty clear benchmarks and frameworks to define it. But when you're creating something truly new, or building a product in a nascent market, it's really up to you to define it.
Product-market fit is a challenging concept to measure, but the most effective way is to look at whether the product adds value to its users and solves problems they are experiencing. Achieving this requires conducting customer research to figure out whether customers will be satisfied with your offering and bring them competitive advantages. The key is achieving a level of customer satisfaction that leads to user loyalty, word-of-mouth marketing, repeat purchases, and an increase in customer lifetime value. Ultimately, product-market fit is about understanding clearly what you are selling and if it actually satisfies what’s important for your users — then you have found the secret sauce!
We do it with surveys and feedback, user engagement, customer retention and sales growth.
Wrote a whole thread about how we learned we have PMF here: https://www.linkedin.com/feed/up...
Here are the first 3 signs we found:
1. Selling like crazy with limited reach.
2. Close to zero refunds
3. Working with large companies early on.
I go a bit more in-depth on each one in the thread.
I really learned a lot from reading this article: https://medium.com/swlh/the-prod...
Retention/Churn Rate is the only safe metric to know if the market is happy with your product. If they're happy, they stick around.
However, this is a lagging indicator of product-market fit.
A leading indicator would be nice of course. What that is, depends on your product/service. Possibly something related to specific milestones reached, frequency of actions performed etc. Leading indicators are dynamic formed by your current customers and they way they behave/use the product.
My co-founders and I built and open-sourced this framework: https://review.firstround.com/how-superhuman-built-an-engine-to-find-product-market-fit
Customer Acquisition, Usage Metrics, Feedback, and Retention Rate are the key metrics to measure PMF.
Product-market fit can be measured by tracking metrics such as customer satisfaction, usage rates, and sales. Additionally, qualitative feedback from customers can be used to measure product-market fit. Surveys, interviews, focus groups and other research methods are often employed to understand how well a product meets the needs of its target market.
You just know you hit it :)
On a more serious note it's a mix of product, ICP (ideal customer profile), distribution channel that makes hypervelocity adoption.
Good Question.
A product-market fit can be measured in a variety of ways, including customer surveys, customer interviews, usage metrics, and revenue growth. Customer surveys can provide insight into how well customers perceive the product and how it meets their needs. Customer interviews can provide more in-depth feedback on the product and its features. Usage metrics can provide insight into how often customers are using the product and how they are using it. Finally, revenue growth can provide an indication of how well the product is resonating with customers.
I would say we look at the social flare that it is creating. After all, the market is social now, isn't it>
When you feel like you have achieved Product Market fit is when you have reached the low-hanging fruit, there is a lot more for you to work towards and that just is the start to see if you are on the right path at this point in time.
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