If 15k out of 30M people say yes, do you have PMF?
We're sometimes extremely harsh on ourselves when it comes to evaluating ideas and finding product market fit.
We might expect at least one paid user out of say 20-30 potential users, and stuff like that (at least that's how I've been thinking until a few minutes ago).
What if I tell you there is a successful company (at least from founders' POVs), with only around 15K paid users out of 30 million users which are not willing to pay for their service?
That company is called Gitlab, and I bet the founders have banked millions of dollars already.
When people say "make them pay from the first day", I actually think they mean "make them COMMIT (pun intended) from the first day". Like...
Commitment does not have to be money. If you get people to use you as their version controlling system...that's quite a commitment even if it's free.
Change "pay" for "commit" and they phrase makes much more sense :)
By they way, take a look at @MarieMartens startup (Tally). An much relatable example of "freemium" startup growth.
(Even there "commitment" applies: for a relatively low ticket product, they are investing their time on creating a form and putting it on their websites. They are "commiting" but not "paying" 😊)
Makes sense, commitment is a much better term.
And it's really true, very often even if people use your product they've sort of committed into your business.
Michael Seibel has a good essay, The Real Product Market Fit. He expands on it in this talk.
Michael quotes Marc Andreessen's definition of product/market fit.
I doubt it's practical/realistic. This is more like the explanation for a healthy business, rather than PMF.
I suggest you watch his video on YC's channel talking about how Reddit started. Things are almost never as ideal as this in real life. People don't rush to use your service.
But at the same time I agree that if you find product-market fit, at some point your business should look like what you described.
Those aren't my words describing product/market fit. The quote is by Marc Andreessen.
The essay and talk that I linked to are by Michael Seibel, managing director at Y Combinator.
I know them, and I'm not saying it's wrong, I just believe it's a bit out of context IMO.
Maybe. Finding and signing any percentage of those 15K people would be a challenge. But of course, it depends on your goals. Maybe that could change over time too.
Where did you find that info? It would also be nice to know how many of those are active users.
It's a public company now so everything is out there.
That's an opportunity actually when these startups go through IPOs.
https://www.forbes.com/sites/greatspeculations/2021/10/12/gitlab-another-overpriced-tech-company/?sh=57bdafe35286
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I see what you mean, but my point is that sometimes we forget that our idea might be good and many people be willing to use the product but only a tiny fraction be willing to pay for it and still it can be a viable product.
This is completely against the dominant narrative that says people have to pay for the service from day one, if they don't pay just ignore them, blah blah...
Don’t forget they entered an “established” market where GitHub was king and ruler… it’s an impressive thing they managed to achieve.