Product-market fit is not a definitive point in a startup or company's life. A new startup definitely wants to reach the its first product-market fit before being really serious about growth. But the level of product-market fit changes with the company as it grows and expand into new markets or verticals.
How do you know you have product-market fit?
The trifecta conditions are present:
- Significant top-line growth (installs, sign ups)
- Flattening retention curve
- People are coming back and taking meaningful action (Uploading images, posting content etc)
Other proposed ways to gauging PMF
Surveys like PMF survey (how would you feel if our product disappeared overnight) and NPS (measuring customer happiness) are also often used to gauge PMF but they have their own flaws.
These surveys have a high chance of false positives versus actual data of whether people are taking meaningful action in our product.
Looking at data whether people are coming back and taking meaningful action is better than surveys, but this approach alone has flaws too. Data size can be too small, and it's also easy for us to try and find desired patterns in our data.
Engagement data shold be combined with the other trifecta conditions.
Achieving product-market fit
Taking a page out of the Lean Product Process:
- Determine target customer
- Identify their underserved needs
- Define our value proposition
- Specify our MVP feature set
- Prioritising with the Importance-Satisfaction Framework
- Create MVP prototype
- Test MVP with customers