How do you measure Product-Market fit for your startup?

Question

Quantifying product/market fit is tough.

Came across this SuperHuman framework on PMF that is simple and extremely effective:  https://review.firstround.com/how-superhuman-built-an-engine-to-find-product-market-fit/

I'm curious to know, what other frameworks are you guys currently using?

Kostya Bolshukhin · Accepted Answer

I guess by checking Stripe account

Haji Muhammad yousfzai · Answer

Measuring Product-Market Fit (PMF) for your startup involves several key indicators and strategies:

1. Customer Feedback
Surveys: Use surveys to gather customer opinions and satisfaction levels.
Net Promoter Score (NPS): Measure customer loyalty by asking how likely they are to recommend your product.
2. Retention Metrics
Customer Retention Rate: Track the percentage of customers who continue using your product over time.
Churn Rate: Measure how many customers stop using your product within a given period.
3. Engagement Metrics
Active Users: Monitor daily, weekly, and monthly active users to gauge engagement.
Usage Frequency: Track how often customers use your product.
4. Revenue Growth
Recurring Revenue: Assess the consistency and growth of your recurring revenue streams.
Customer Lifetime Value (CLV): Calculate the total revenue expected from a customer over their entire relationship with your product.
5. Market Demand
Waitlists and Signups: Measure the interest in your product before launch through waitlists and pre-signups.
Sales Growth: Monitor the rate at which your sales are growing.
6. Qualitative Feedback
Interviews: Conduct in-depth customer interviews to understand their needs and pain points.
Social Media and Reviews: Monitor social media mentions and online reviews for feedback.
7. Competitive Benchmarking
Market Position: Compare your product's performance and customer satisfaction against competitors.
8. Customer Acquisition Cost (CAC) vs. CLV
Efficiency: Ensure that your CLV significantly exceeds your CAC to maintain a sustainable business model.
By regularly tracking and analyzing these metrics, you can assess whether your product is meeting market needs and achieving PMF.

How do you measure Product-Market fit for your startup?

Replies