What's your bar for product-market-fit?
In the well known "Startup Owners Manual" by Steve Blank and Bob Dorf [1], the authors have a high bar for what they consider product-market-fit. When approaching the MVP pivot-or-proceed test phase, they talk about finding passionate users for your product:
".. more than anything, you're looking for hordes of customers who will try to rip the product right out of your hands so they can have it before their friends or competitors"
Of course we'd all love to have "hordes" of customers who "rip" the product from us, but is that bar too high?
What would you consider a minimum signal to proceed instead of pivot?
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I like the idea of "hordes" of customers but I have a hard time defining that as a measurement of success. Millions certainly sounds better than hundreds of thousands and that sounds better than hundreds.
If you've got a product that you charge $200k for and you have 1,000 customers - you likely have product-market fit. If you have a product that costs $1 and you have 1,000 customers, I'd say you're not there yet.
I also think lots of people can want your product or service but if you can't monetize it, then you may have achieved product-market fit but then failed on the business side. We do see this in the mobile app business. Apps can have many downloads and many users but still not generate much revenue for their owners because they don't have a diverse stream of revenue.
Not all of us are Google, Facebook, Waze, or any number of founders that are able to wrest investment funds from wringing hands into our startup. I know that's my kryptonite - fundraising. As they say, "cash is king". I just read a new variant of this which is "revenue is vanity, profit is sanity, but cash is king".
I only have a one-time purchase product so I can’t use retention as a metric.
What keeps me going is that a good fraction of people tell me “wow, I never expected it to be this good, I love it”. They don’t just buy it, they love to have gotten it and are very proud of the result. (The product is a new kind of logo maker, see link in my profile).
Somehow, even though we’re still struggling to find distribution channels, having a stream of new people tell us they’re in love with it just keeps us going. Now let’s hope there’s enough of them and that we find a profitable way to reach them.
In my case it is not too high. I work with a friend creating apps and if we talk to a group of random people from twitter and they think the product is a good one we proceed to build it.
Perhaps we are making bad decisions, but in our case there are other factors we consider to proceed with the product:
1- If we believe it adds value to the customer --> proceed
2- If we will learn new technologies making the product (in our case we are learning Flutter) --> proceed
4- If we find a good business model for the app --> proceed
3- In more than the half of the people we interview think that the product is useless --> pivot
5- If the business model validation fails after some --> pivot
In our case we do it as a side project and I know it is not viable to do this if you are putting all the energy in this.
Weekly retention at least 40%