Let me pop a big one...do you care about product market fit?
Heya fellow builders!
Love what you are all doing here. Thank you for the inspiring sweat, grit, and hard work (whichever order that comes in).
Launched a couple of MVPs recently (will write about them in separate posts). Whilst setting the metrics to test for the value proposition, it dawned on me that I have no clue how to measure product-market fit [PMF] (not to mention, how to get there).
Hence, wanted to ask our awesome community a few questions:
(1) Do you optimize for PMF or for cash profitability, or can you do for both?
(2) What are the metrics that you use to measure both?
(3) Did anyone achieve PMF, if yes, how did you know?
Thank you all!
Awesome day.
1.- You don't optimize for PMF, you achieve PMF.
2.- Depends on your product.
3.- You will be crying not because you don't have clients, but because you have too many clients.
Thank you Steban.
(1) By optimizing, I meant, iterating on the feedback you get for the product until you hit the product-market fit.
(2) What are the metrics that you use for your business?
(3) What do you mean? Do you feel that the user base is a solid enough argument to state that you achieved PMF?
Hey, building CoderNotes.io and a newsletter for bootstrappers right now.
CoderNotes.io is launched and working towards PMF, the newsletter is still in validation phase, so I can talk about this from multiple perspectives.
First, a definition. Product-market fit for me means "Having a product that people want and are willing to pay for".
In both cases (validation phase and post-launch), I'm optimizing towards PMF and actively willing to ignore cash in that pursuit. For CoderNotes.io, I want to figure out who really likes the app, and who it's meh for. I'm doing that by reaching out to current free and paid customers, and doing interviews. I'm considering offering a free month for anyone who replies, since so far I haven't gotten many responses.
For the newsletter, I'm optimizing for PMF validation, which for me means offering people a free edition of the premium newsletter if they email me at kevin.conti@hey.com. My goal with this is to start some conversations and understand who wants it and is willing to pay for it.
Measuring cash is easy. It's the combination of sales, LTV, and churn. But in regards to measuring PMF, I don't believe in trying to quantitatively measure it early on. You can use the Superhuman question when you have enough customers, but before then I like to live by this advice:
*"You've spoken to enough customers only when you stop hearing anything new"
If I can't predict 99% of what a customer is going to say when I ask them a question, I don't understand my market, and therefore I can't measure my product-market fit.
I view it more as an art than a science, especially when the number of customers is low and statistically insignificant.
Neither of these have obtained PMF yet, so I won't speak to this.
Hope this helps!
Thank you Kevin. A very thoughtful and clear response.
Good job on both of your projects.
Re your definition of PMF = "Having a product that people want and are willing to pay for" does the number of users matter to you? and does the period of time that the users are willing to pay for it matter? Or if you have 1000 users paying now, and you are making a profit, then you can comfortably say you have reached PMF?
Great question. I haven't achieved it so my rational brain wants to not answer... but my ego will give you my best guess!
That's the definition I picked up from @robwalling, so he probably has the best answer here. But for me, I would say that if the number of new users who want is is consistent and the amount of those new people who are willing to pay is consistent, I would consider it PMF.
Here's @robwalling on the subject:
https://share.descript.com/view/38b34200-a144-4088-bd13-8a1b8c3052c3
Yeah, this is a complex topic, and I think there are multiple ways to think about it or see when it happens.
The one I often talk about is when churn drops noticeably, trial (if you have one) to paid conversion rate increases, basically all the numbers going in the right direction and people begin telling others about it.
But that's amorphous and hard to measure, so I get why things like Sean Ellis' survey are popular (I've used it myself) since it gives you some hard numbers to work with.
I will say this: "you'll know it when you see it." Sounds cheesy, but I've never met someone who achieved PM fit and kept asking themselves if they had. The nature of the business changes at that point.
Lastly, it's not binary, it's a continuum. So you can have more or less PM fit. And you can have more or less with a certain segment of customers, making things even more complicated.
Thanks Rob! Great insight. Have you seen projects at Indie Hacker reach this stage? Have you invested/bought companies out of IH ecosystem?
I'd have to imagine IH projects have made it here - typically by the time you hit $5k-$10k MRR you start to see PM fit come together.
I would be keen to acquire some projects. Would be forever grateful to have a mentor:)
Yes, yes, yes - I think that is very important!
Then the requirement for scale is really subject to the product, business model, etc.
By that, I mean that if you have a good product that is consistently attracting new clients (with low/zero paid advertising), who are consistently paying (with low churn), then regardless of the size/scale you got your PMF.