Product-market fit is the most important milestone for any startup. Without it, nothing else matters. As CEO of Softechinfra, I've helped startups find and measure PMF. Here's a practical guide.
What Is Product-Market Fit?
Definition
- Product-market fit means:
- Customers want your product
- They pay for it (or engage deeply)
- They recommend it to others
- You struggle to keep up with demand
Why It Matters
- Before PMF:
- Growth is hard
- Retention is poor
- Sales feel forced
- Churn is high
- After PMF:
- Growth becomes easier
- Customers stay and expand
- Referrals increase
- Demand exceeds capacity
Signs You Have PMF
Quantitative Signals
Qualitative Signals
The Sean Ellis Test
- Ask users: "How would you feel if you could no longer use this product?"
- Very disappointed: >40% = likely PMF
- Somewhat disappointed: growth potential
- Not disappointed: problem
Finding PMF
1. Start with Customer Problems
2. Build Minimum Solution
3. Measure What Matters
- Track:
- Activation rate
- Retention curves
- Usage frequency
- Customer feedback
4. Iterate Based on Data
5. Double Down on What Works
- When something resonates:
- Focus resources there
- Cut what doesn't work
- Narrow your market
- Become essential to few, not nice for many
Common Mistakes
1. Building Before Validating
2. Targeting Too Broad
3. Premature Scaling
4. Confusing Activity with Progress
Measuring PMF
Key Metrics
- Retention:
- Day 1, 7, 30 retention
- Cohort analysis
- Revenue retention (B2B)
- Engagement:
- DAU/MAU ratio
- Core actions per user
- Session frequency
- Growth:
- Organic vs. paid ratio
- Referral rate
- Net Promoter Score
Benchmarks
- Strong signals:
- NPS > 50
- >40% would be "very disappointed"
- Retention curves flatten
- Organic > 50% of growth
Building a Startup?
We help founders build products that find market fit. From MVP development to growth strategy, we've got you covered.
Get Free Consultation →