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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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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.
Hello @noyanidin
I will say Growth and Profit once you detect the Retention is good enough in your product. If every month you see your user base growing and also your profit and retention keep stable, I will say you have a product-market fit.
What do you think?
Cheers,
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, 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.
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.
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.
My go-to is the product-market fit score coined by Rahul Vohra:
https://review.firstround.com/ho...
Bonus article on PMF: https://www.nfx.com/post/superhu...
@patrick_samy1 checkout formbricks.com/pmf - we're built the custom tooling Rahul and Team built but for everyone to use.
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.
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.
It's an area that we struggle to teach at universities and entrepreneurship centres. Getting idea validation data is a more mature science now but very little work has been put into defining product-market fit and measuring it. It probably lies in the words: "Does your product have a large enough customer segment (market) that is buying and using it". But how do you measure this?
You posted a good question. I'm enjoying the answers. Please keep them coming😀.
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.
Good question! I think in the world of positivity it makes this quite difficult to get true sense. Competitiveness in sw space doesn't help. You almost need a viable channel and GTM plan in place as well just to get above noise floor.
I'm sure there are generic responses, but its more complicated than that. Engagement of organic users may be purest form.
Are customers happy ? Do they use the product ? Are they happy to pay the price you're asking ?
Also, I've tried to sum up a more pragmatic view that the official version : https://geer.fr/en/product-marke...
We do it with surveys and feedback, user engagement, customer retention and sales growth.
Customer Acquisition, Usage Metrics, Feedback, and Retention Rate are the key metrics to measure PMF.
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.
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