What metrics do you look at to say that you’ve achieved product-market fit for a totally new product?

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5 Answers

Go-To-Market Strategy Launch Channels Launch Enablement Launch Metrics

Dave Steer

Webflow Chief Marketing Officer • 3y

Ah, the elusive product-market fit…what Mark Andreesen once called ‘the only thing that matters’. Broadly, there are two components that I look at: a defined and interesting market with a clear problem to be solved; and a capability (or product) that meets the need in the market. With this in mind, the first metrics I look at are associated with the market. These metrics include Total Addressable Market – TAM, for short – and the competitive landscape. I find these two areas are good proxies tha ...Read More

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Michele Nieberding

Treasure Data Director of Product Marketing • 3y

Some lesser known ways: A new metric my team is looking into is TAM (total addressable market) vs. SAM (sellable addressable market) and the delta between the two. The smaller the delta, the better the product fit. If customer acquisition cost is lower than the lifetime value of your customer User adoption (make sure you define the right base audience first) x value (could be Customers who buy that feature) = feature success Some more common ways of analyzing market fit: consistent usage (i.e. f ...Read More

1,047 Views
Amanda Groves

Zywave VP of Product Marketing | Formerly Crossbeam, 6sense, JazzHR, Imagine Learning, Appsembler • 3y
This is a great question and totally depends on company stage. But for really early companies like seed stage or A-B, I think WAUs can be a solid metric. I also have fallen quite fond of superhuman's PMF survey where they:

"How disappointed would you feel if you could no longer use [x software]?

Possible choices:
- very
- somewhat
- not disappointed
If your org gets on average 40% of survey responses are VERY dissapointed to no longer have your software - that my friends, is product market fit!
492 Views
Ken Oestreich

Fountainhead Product Marketing Founder | Formerly Citrix, EMC, Auth0 • 3y
Some "industry standard" leading metrics to use -- besides the Sean Ellis test -- are the following:
1. Retention: Cohort retention curves flatten (stickiness)
2. Net Retention Rate: > 1 (retention + upsell)
3. DAU/MAU: > 50% (it's part of a daily habit)
4. Engagement: Revenue, active-use, or activity expansion on a *per user* basis over time
5. Actives/registrations: > 25% (validates TAM)
363 Views
Lisa Dziuba

Lemon.io Head of Growth Product Marketing | Formerly LottieFiles, WeLoveNoCode (made $3.6M ARR), Abstract, Flawless App (sold) • 2y

Product-Market Fit proves that users need the product. It can come in the form of time users invest in the product, revenue that the product generates, and high usage metrics. As Marc Andreessen mentioned in his famous quote: 'You can always feel product/market fit when it's happening,' and you clearly see when it's not.So to measure Product-Market Fit for a new product, keep an eye on such metrics: Customer Activation Rate Customer Retention Rate Customer Feedback and NPS Usage Metrics (e.g., t ...Read More

308 Views